Wow...

Another year almost gone... and another to usher in!

All my adult life my favorite holiday of the year has been New Year's. And in the last decade, I've even forgone the traditional New Year's party because I want to wake up to the first day of the year with all of my faculties sharp, sharp, sharp!

This is because I always have a new plan for the New Year. And I don't want anything to taint it... and that means most certainly, not a fog from the night before. For me, I just think it's a bad way to start off an entire new year :)

So what are your plans for 2010? I have several. One is to continue helping my past, present and future MARLOW Marketing Method™ students land the five super-hot clients that will cement their careers.

Another is to continue building "must have" information products... and to show my students how to do the same, for guru status in their niche, and a more stable income.

And my third... which is actually in "first place," is to work on my health. As part of the Baby Boomer generation, I'm right in there with everyone else who must realize that good health is no longer a "given," but something you must put effort to each and every day.

So... what are your goals for 2010? If you haven't given much thought to it, sit down now and make your commitments. If you need send your commitment to someone, send it to me at chrismarlow@getgreatclients.com. I'm a coach! I'll file it away, and you'll know that someone (me) saw your intention and expects you to achieve the goal you set for yourself in 2010.

Ok, something fun now... two videos from the AWAI Bootcamp in Delray Beach, Florida where I conducted a workshop earlier this month. I bought a Flip Video just before going to Bootcamp so yes, this is NOVICE recording. Check out my exceedingly brilliant student Barbara Hales, who has a call to action on her T-shirt (for the Job Fair people):

http://www.youtube.com/watch?v=rp8C8CVq7Rs
Don't you agree that there's just no way Barbara is not going to make it in this business?

And here we are at the Delray Beach Marriot watering hole... AWAI after hours:

http://www.youtube.com/watch?v=tBqpEkeTaF8
In order of appearance: Current student Debbie Jeffers talking to past student (and Certified MARLOW Marketing Method™ Coach) Kammy Thurman; current student Carol Parks talking with copywriting legend Don Hauptman, a quick close up of copywriting student Sally McBride, then Debbie taking a picture of Barbara Hales, myself Chris Marlow, and Ken Marlow (yes, he is my "former"), plus more recorded silly antics. As you can tell, getting together at such an event is very bonding. I hope you found it enjoyable!

...Ok, so now that we've had our fun, let's get to this month's very important lesson in the business of copywriting...


Having been a freelance copywriter for more than 20 years, I can tell you that when recessions hit, pay-for-performance marketing models suddenly become more popular, and when recessions fade, flat rate payments bounce back as the norm again.

What's different these days is the number of entrepreneurs who have products and services to sell, who know they need good copy but can't afford the thousands of dollars it costs for a great landing page, or a really solid marketing strategy.

When money gets tight, copywriters who work with entrepreneurs and small business can frequently find themselves in pricing dilemmas — one in which they're asked to share the risk in a pay-for-performance type of contract.

This month I'm going to share with you the process of how I helped a copywriter create a pricing agreement that was fair to both her and her new client. But first, let me define the terms "royalty," "bonus," and "pay-for-performance."

A royalty usually consists of payment over and above a flat rate. Although you can earn royalties on any type of job, they're most common with very large mailings, where the royalty of, say, 3 cents per piece, can add up to significant change.

In a mailing where you have the chance to exceed expectations by 250,000 additional sales, then 3 cents times 250,000 would equal additional $7,500 in your pocket. Of course, if the mailing list is significantly smaller, you can raise the "per piece" royalty rate to whatever you'd like. I understand that it's not uncommon to see royalties of 10 cents per sale in the online world.

A bonus, on the other hand, is a flat lump sum paid extra for achieving a sales benchmark. (Note that I said sales... not leads; it's hard to project a quantifiable return on investment for leads.) So if you meet or exceed a sales benchmark, you could be paid your flat rate plus $200, $500, or whatever makes sense financially.

And finally, pay-for-performance can mean many things. At its rawest, you would be paid a percentage only on sales. Or it can embody a bonus or royalties arrangement.

Most often, though, pay-for-performance (PFP) consists of a flat rate that is acceptable to the copywriter, but which is a bare bones minimum. Then some kind of reward would be added for success. You can create whatever you want. In fact, if you can make the numbers work, you can agree to a flat rate with sliding scale, such as $800 for a landing page, plus $10 per sale up to 20 sales, $20 per sale from 21 to 30 sales, and $30 per sale for anything above. Exciting, isn't it?

But here's the rub. When you're dealing with any kind of pay model that asks you to share risk, certain things have to be in place before the risk is worth it.

Ask yourself these questions:

1. What is the "normal" response rate for sales of this product or service?
If you don't know, calculate .05%.

2. What is this client's track record for response?
If there is no track record, or this is a start-up business, I recommend you stay with a flat rate model and DO NOT share risk.

3. How trustworthy is the client?
How can you know what their numbers are? I prefer to work these kinds of deals with local business so I can look at the sales reports if I want to; I do not want to work with super-small, distant business who might have an easier time producing false reports; however... a smart client will not want to lose a good, producing copywriter either!

4. How much is the client likely to earn if the response is average?
You want to price your work based on your value to the client; I once did a direct mail package for a leading software company that brought in $540,000 from just one mailing. I charged $10,000, but I would have charged less for the same work for a very small business, that had much lower expectations.

5. Does the client have confidence in his own ability to market?
Newbie businesses often fail at their marketing efforts; you don't want to share in that.

And last but certainly not least:  

6. Is the product a good one?

7. Does the client have a GREAT offer?

8. Is there a guarantee in place?

9. Is the list strong? Is it PROVEN?

10. Does the audience NEED this product?

If you can answer each one of these questions satisfactorily, then you may have an opportunity worthy of a little risk-taking.

Recently I helped a copywriter price a pay-for-performance job. If you're stumped about how to do this effectively, try to "work it backward." Start with what you think the client may earn from your efforts. Let's say that an online teaching company wants you to write a landing page expected to convert 100 students into a $149 subscription coaching program. The client wants you to do the work for $1,000 plus some kind of pay-for-performance.

At $149, you realize that the client hopes to earn $14,900. Therefore there is room for you to earn a percentage of each signup. What would you charge if you were not asked to share risk? $2,500? That sounds about right to me.

So I would offer the client two options: $2,000 flat rate plus $5 for each signup, or $1,000 plus $20 for each signup. The client will want to pay a lower flat rate, but for that benefit, he must pay a higher back end commission. So if 100 people sign up, you would earn $2500 with a $2,000 flat rate, or $3,000 with a $1,000 flat rate.

Bottom line: when pricing jobs on a risk-share basis, you must have full confidence that the project will succeed. If you can see that the one and only element for success that is missing is your fantastic, order-generating copy, then it makes sense to work a pay-for-performance model... if the client asks for it.