Commission based marketing

[Liam Hindson]

Hi everyone,

I need to find a marketer that will be willing to work on commission. I don't know who to contact or where to look so any suggestions are very welcome.

I run a music education agency start-up in London called Teach Tutti. We have qualified instrumental teachers and arrange home tuition for students throughout the capital. I have spent the past three years building this business and recently had a business loan of £10,000 approved. This money will be used solely as the budget for marketing with Google Adwords.

I have a PPC marketing agency who have agreed to work with Teach Tutti. However, I can't start with them yet because I don't know if the business will be successful and their marketing fee and expected budget totals £4,000 per month (contracted in for 6 months). For this reason, I'm looking to test out the business and increase revenue before starting this partnership.

To cover the monthly £4,000 marketing costs, I need to acquire 140 regular students. The issue is that the commission per student is relatively low: the company receives £40 per four lesson block (£10 per lesson). As a way around this, I'm prepared to pay company revenue to the marketer for each new student beyond the initial payment e.g. £120 for the first three lesson block payments.

Does anyone have any suggestions about how to find a marketer for this work?

Thanks,

Liam

 

[ethical PR]

I think it's unlikely you will find a marketeer willing to underwrite the cost of your marketing for free with an untested product.

Very few marketeers provide commission only services and those that do, normally do so with clients where they have an established relationship and a solid marketing plan to establish a demand for the service/product and tested routes to market. They also expect a substantial return for sharing the risk and investing their time (money) for free.

I'm also not sure why you are investing your marketing budget on PPC as your major focus...have you market research and a marketing plan that identifies this channel as the key one to reach your target audience/s?

You are probably better off looking at commission only sales people if you don't want to pay up front for your marketing.

 

[telemax]

because I don't know if the business will be successful

Here is your problem, no one is going to risk it for nothing.

 

[Scott@KarmaContent]

£4000 per month for PPC and tied in for six months? That seems rather steep for what I understand your business is!

 

[stevebrownlie]

£4000 per month for PPC and tied in for six months? That seems rather steep for what I understand your business is!

Yeah for an untested business you're committing to something that's just too risky for you... what if PPC doesn't work out for you and you need to switch channels...

I'd suggest putting out an RFP to some other agencies and find someone who can start small and build as your cashflow builds and as you are able to confirm that the model is working as you'd hope rather than go at it full throttle with a budget you can't afford...

It's not a niche I do any work in but I remember seeing a case study online a year or so ago with a site that did a lot of 'how to' type videos and content that was generating a lot of leads so some kind of content based strategy using inbound (SEO for the how-to's) and targeted facebook ads, retargeting and a mailing list could end up being more effective (it seemed to be for them).

 

[Mark T Jones]

I think you need to reverse your thinking

You have a £10k marketing budget. The starting point should be to (cautiously) invest in quality, strategic marketing advice. The medium should follow, though you will be wanting some pretty major results to justify £4K Ppc budget!

 

[The Byre]

You are trying to run before you have mastered walking. Start slowly and build up. You don't need PPC - music tuition works by word-of-mouth, not fancy marketing strategies and on-line search engine optimisation. Parents ask other parents what works. Music groups and amateur orchestras ask one another.

A decent website is all you need, so that, once a prospective customer has heard about you, they can have a shoofti at who and what you are, before calling!

You also need a small school room of about 30 sq m - people resist the idea of having some stranger putting their sized twelves all over the living room carpet. They would rather take little Jimmy to a school, even if that is just one room and a lavatory.

 

[Breaking Good]

Never ever ever ever sign a contract for 6 months (for anything) unless you have proven the method works. It's gambling £24k. You need to ascertain if Adwords will work for you or not.

I agree with @Scott@KarmaContent. It sounds very high! If you're looking to find customers in a particular area which I assume would be the case, I doubt you'd even be able to spend £1k a month on PPC ads even if you tried.

The commission model has some flaws also as others have pointed out. My advice would be to do more research about whether PPC will work for you, you can test it out yourself with £100 or so

 

[TomTracker]

Spending 4K on monthly PPC..? Madness!

Here's a scenario: You pay 4K PM to direct traffic to your website then after month three you find out your low conversion rates have something to do with the conversion ability of your website? Have you tested your website to make sure it]s converting? If so, what level of conversions have you achieved to date?

Withi a new startup and higher risk you'd be far better trying to grow organically in the first months, then hone your business model to make it more efficient, iron out bugs in your own internal systems (like your website, that'd be No1 place to focus).

I also agree with the above:

Never ever ever ever sign a contract for 6 months (for anything) unless you have proven the method works

 

[OldWelshGuy]

Liam please don't be offended but it looks like you are trying to find something to fill the hole in your business plan.

What you are offering is an absolute non starter unless you sign a long term exclusivity agreement.

I would certainly consider that, but essentially what you are looking to do is get someone to do all the hard work, earn you money, test your product, ONLY so you can then go into competition against them by paying ANOTHER agency £4k a month to take their commissions away.

Really? You think anyone would be interested?

 

[threenine]

I have an offer for you, teach me how to play an instrument and when I become a rock and roll legend, I 'll promise I'll pay you back!

Deal?

 

[telemax]

I have an offer for you, teach me how to play an instrument and when I become a rock and roll legend, I 'll promise I'll pay you back!

Deal?

This sums it up perfectly.

 

[Paul Kelly ICHYB]

Liam,

I would have thought a spot of adwords and a lot of FB advertising would be a more logical way to go, but, recommendations will be one of your largest recruitment tools.

£4k a month on adwords??? 6 months? I have a better idea - give me £12k and you spend the remaining £12k - 50% on a holiday and 50% on local marketing based on where your teachers are....

 

[Erno Horvath]

Hi Liam,

I think it's a good decision to start a PPC campaign for generating leads and also I think it's a good decision that
you haven't started on your own and asked an agency to help you out. I've seen many failures when people managed their own campaigns
usually they have spent more on 'irrelevant' traffic than they would have pay for an agency as a fee.

The best thing in PPC is basically 'whatever' budget you have you can run your campaign. If you have only £1000/month than you'll get traffic for
£1000 and if you have £3000 you'll get traffic for £3000. So I would say you should start with a budget like £1,000 and see if it's working.

For your type of business (music lessons, music teacher london) the average CPC from Google search is between £1.3-£1.9 which means for the
worth case scenario:
£500 - 250 visitor/M
£1000 - 500 visitor/M
£2000 - 1000 visitor/M

250 visitors is enough to see if it works for you or not. If you got no conversion at all, that would mean your conversion rate is
below 0.4% which should be enough proof after a month to not to carry on doing PPC.

But don't forget there is a reason why a click for 'music lessons' & 'music teacher london' costs £1.3- £1.9 for other companies.
Because those are terms that make money for them.. so they should work for you as well.

Try to get a quote for £1,000/month all together and if it works than scale up the spending, and also there are plenty agencies out there
which work based on monthly recurring contracts.

The service you are looking for is called lead generation in the world of PPC, a few PPC companies offer lead generation service, but
you as far as I know they won't offer this to you easily and they usually do this for services with very high revenue like 'equity release' or
'dental treatments' over £5K where the commission is quite large.

I work as PPC consultant btw with 10 years of experience, I hope I helped you at least a little.

Regards,
Erno

 

[beasty]

2 Grand for 1000 visitors is insane

1000 VISITORS...
insane

 

[Erno Horvath]

Never judge a keyword based on its avg. CPC, judge it based on the money you make from it. There are plenty of business out there who will be more than happy if they 'just' need to pay £2 for a click.
I know it's a bit off-topic, but
magento developer - £23.39
car accident lawyer - £61.62

 

[threenine]

To be honest I would think that your type of business , is a little too niche for an internet CPC campaign.

i think you need to think about your strategy a whole lot deeper.

You're thinking of trying to create a CPC campaign, but do you have any Persona's of the type of client you're trying to attract ?

What websites do these customers visit? what are they searching and engaging with on these websites?

Your existing customers how have they come to you? If you haven't used CPC to attract them, then what tactics worked ?

Honestly, I think you would end up wasting your time and money on a CPC campaign. Pure and simple. Despite what others would try and lead you to believe about the internet and the marvels of running a CPC campaign, there is still a lot of businesses you drive business the old fashioned way. i.e. Phone calls and networking.

I would say, your business, would probably be confined to maybe a few areas in london, probably the vast majority of your business or prospective customers would be school going children. I would focus my campaigns on getting in with a couple of schools, send pamphlets home in kids homework books, organising after school clubs, doing holiday clubs, arranging events at schools and colleges.

a 10K business loan, could build a much larger business, if you just focused and building grass roots. Word of Mouth.

You need help with a comprehensive marketing plan, and not just giving google more money. Google loves fools like that.

 

[PlaceMeUK-Lead Generation]

drive business the old fashioned way. i.e. Phone calls and networking.

This is brilliant advice especially networking with parents to stimulate 'word of mouth'.

 

[Erno Horvath]

To be honest I would think that your type of business , is a little too niche for an internet CPC campaign.....

I think you don't understand how PPC works. Basically there is no too 'little niche', I have a client who spends about £50-£80 on Adwords monthly, she is a baby photographer and she starts the campaign when she isn't fully booked and stops when se can't handle more sessions in the next two weeks.
PPC is not about spending millions for traffic is about pay for the right traffic that converts.

... Phone calls and networking....

Call who? Call everyone like 'Do you have an accident..' guys do? I know phone calls & networking can generate good revenue, I was a former member of BNI, so I know how networking can help your business to grow but it has its disadvantages too, BNI required 4 hours/week from me to always be there, etc. There is no free meal there too. Meanwhile PPC can generate leads meanwhile you are with your family or sleeping.

You need help with a comprehensive marketing plan, and not just giving google more money. Google loves fools like that.

I saw a company grow from 10 to 50 within 2.5 years using mostly Google PPC to attract people, I know you might have a story like this without PPC, but call those people fools just because they have a method how to make money from Google PPC is reckless.

 

[threenine]

Call who?

uuhm!! I thought i made it clear. Existing customers!
and also a select set of organisations i.e. Schools, Colleges etc.
to initiate programs. Networking with Headmasters and faculty leaders in schools.

Using a classic case of BNI, if that is what you term as networking best of luck to you. I term networking as actively meeting people in your area of interest. I prefer my networking to be more on a personal level. I have attended networking groups in the past, but I too have found them to be of limited success. However, I have found engaging with a target list of people on LinkedIn and forums to be of huge success. It's all networking.

Has the OP tried to engage with Headmasters and faculty leaders on the various forums ? Has the OP engaged on the 101 forums dedicated to musicians ?

I know very well how PPC works. We provide those exact services to customers. However, it is not the only service we offer.

The big caveat on on PPC. is that it is just a very small part of a comprehensive digital marketing strategy, it is NOT your digital marketing strategy.

So as I pointed out in my post, that in order for a PPC campaign to work "while you're sleeping" you need to put in a lot of work while you're awake.

Understanding what the market looks like, how to engage, how to attract, and how to convert clicks to customers, involves a lot more than just setting up £80 budget and setting up a campaign.

To have a successful CPC campaign, is all about ensuring the "Landing Page" your advert leads to is optimised to ensure customers are lead down a journey to click buy.


I didn't call ALL the people who use CPC fools. I called the people who don't know how to use CPC correctly fools. Using CPC correctly, is about ensuring your entire digital marketing campaign is effective, and CPC is not a digital marketing campaign it is a component of one!