Pricing a service with unknown quantities

[Salescog]

Hi there and thank you for this amazing wealth of information shared.

To make a long story as short as possible, I have been a leader in direct sales and marketing my entire life, I have worked for some major blue chip companies and have written tens of millions of pounds of revenue in my career, both with consumers and businesses alike.

I have recently had to leave my employment and care for my 52 year old wife since finding out she has Grade 4 brain cancer.

This leaves me in a difficult situation for employment in my usual rolls as I need to be at home, soooo I decided to put my skills to the ultimate test and open my own B2B Telemarketing Business.

Now I know that in all fairness experience is one thing in this industry but a proven track record is probably a bigger deal, of which as a company we will have none, so I would understand clients being a little more hesitant to use a new company.

So the question I put to you is whether you think my pricing idea is understandable and in fact a good idea, I am also very interested as to how you guys feel would be the best way to go about working out commission on sales, which will make more sense when I show you the idea so here goes.

SO I will have 3 options

1) Commission Only

Simply put I would generate the appointments for my clients field sales executives/business development managers for FREE and on a commission on sales only basis. Now here is where it gets tricky because obviously the order values will change wildly from product/service to product/service. So my initial plan was to request a sales report for the supplied appointments giving the usual conversion rates, values etc. Thus allowing me to find the appropriate requested commission structure based on time spent generating the appointments etc. like an ROI report of the client to hit a target cost per appointment for example. Of course we would also need an absolute minimum to target which i am starting with a figure of 10%

2) Pay as you go

As we become familiar with the various ROIs of each product/service through experience and research this will allow us to find a cost effective price per appointment giving clients the opportunity to just order the amount needed on a monthly basis

3) Full Time Campaign

Again with more knowledge of the areas we market this will give us an opportunity to devote whole teams to a clients campaign, essentially becoming their sole outsourced telemarketing side of their business

If you guys have any thoughts, issues or problems with this plan or of course any alternatives to consider I would be hugely appreciative

Have a great day

 

[JamaC]

Have you not done any market research?

There are plenty of companies that do what you do, who have years of experience and have fine tuned their packages and pricing.

 

[Salescog]

Have you not done any market research?

There are plenty of companies that do what you do, who have years of experience and have fine tuned their packages and pricing.

Thank you for the reply, yes I have done as much research on pricing as I can.

But it's not as simple as ringing them up and asking for their "fine tuned" pricing policy, I'm pretty sure I would be told where to go. And nearly every campaign/client/product/service is different so pricing is not really available by online searching.

 

[JamaC]

Ringing up and asking for their pricing policy isn't the definition of market research.

Look, you are the expert in your field and know all about your target market, their wants, needs, and goals.

Yes, they will differ depending on the business model and company goals and you knowing this information can be used to your advantage.

You should have no issue posing as a customer simply shopping around looking for a company that can offer you the most value. You are about to launch a company selling XYZ and you are looking for XYZ results etc etc etc.

This forum - You are in the right place to gain more information from business owners who use such services. You could have made a thread asking what kind of prices business owners on here pay for such services or how much they would be willing to pay.

You can find the answers you are looking for, you just need to get creative with your market research

 

[Paul Kelly ICHYB]

ut a proven track record is probably a bigger deal, of which as a company we will have none,

You are the company - that should be the USP.

Your charging structure should be based on your risk and reward.

Avoid commission only unless you really believe in the product and company. Ideally, get a small retainer to show commitment from your client.

PAYG should be project or deliverables based.

You mention 'we' a lot - is there more people than just you?

BTW, can't you call previous clients and discuss things with them or even work for your old employer on contract or project basis?

 

[MBE2017]

Personally I would steer clear of commission only initially, cash flow kills more businesses than anything else.

I would recommend a fee per lead initially, depending on the industry involved, I would imagine £50-£150 per lead. Once you have a good relationship with clients, and good feedback on the closing rates, I would design a fee per sale scheme.

As for not having a track record, few telesales companies deliver particularly well IMO, it comes down to the quality of the telesales person. If you are good, then charge accordingly, the market will soon let you know if you do not command/deliver the correct rate.