Leaving Money On The Table?

I have had many discussions with local marketers who are convinced that the only way to do this business is to have large upfront fees.

This is the type of mindset that will not only limit the number of clients you have, but will lead to you leaving a bunch of money on the table too.

Most local business owners are not in a position to drop a large upfront investment to get started in a marketing plan. Additionally that is not what they are used too either.

Radio, TV, Newspapers, Magazines, Phone books, etc, all charge a lot of money but they don’t do it all upfront. Nope, they break it into monthly payments. This is how local business owners are used to paying.

Think of yourself….Think of the last few info products you bought that had a higher price tag but also offered a payment plan. The majority of people will do  the payment plan, even if they have to pay a little more….why? It is because of cash flow.

The majority of local business owners are the same way. They are willing to invest into marketing, but they want to protect their cash flow, thus they will say no to large upfront investments.

However many of the same business owners who would not do business with a high upfront fee would be thrilled to have you doing their marketing even if they had to pay a little higher monthly fee.

Additionally, look at it from a value standpoint. If you are asking for a large upfront fee BEFORE you do any work, who is getting most of the value? You are. When it comes to being the trusted person to do their marketing a big part of that is providing MORE value then they are paying for initially.

So instead of asking the business owner to take on the majority of the risk with large upfront fees, instead give them a monthly payment plan that they can handle. You can still offer the large upfront and give them discount if they pay upfront.

The key is that you make more on the monthly then you would on the upfront. This way if they pay monthly you win in the long run and they can manage their cashflow (win-win). However if they choose to pay upfront they get a discount and you have instant cash flow (win-win).

The bottom line is that by not giving local business owners some options you are leaving money on the table and missing out on some great clients. I know this is hard to swallow in the world of “biggest check wins local marketing”, however if you want a sustainable long term business be willing to assume some of the risk. Understand where local business owners are coming from and offer them some terms that they can deal with. Chances are if you do your job right you will have a long term client that you can incrementally increase the monthly and you will make a whole lot more over the lifetime of that client.

One other point to make…If you really want to offer value, be positioned as the expert and close more clients then don’t have a long term contract on that monthly fee either. Make it a month-to-month contract and tell your prospects that you are so confident in your services that you don’t have to lock them into a long-term contract like everyone else does.

Honestly this is what business owners want, so up your game, give them great terms, have happier clients, and make more money!

Please note: I reserve the right to delete comments that are offensive or off-topic.

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2 thoughts on “Leaving Money On The Table?

  1. Mike,

    I really like this article because of 2 reasons.

    1) You are clearly putting yourself in your clients shoes which is not what most people do. Most people are thinking of themselves and the outcome they want rather than looking at it from the clients perspective. This is one major way to set yourself apart from the masses.

    2) You also talk about providing value and helping reduce the business owners risk in this type of transaction. This is brilliant because not only does it help the business owner begin a relationship they may not have been able to afford but it also helps make you and the client make more money.

    3) The month to month thing sounds crazy to most and that is because most people don’t deliver.

    Love your approach to running your business.

    I am looking forward to learning a lot more and eventually get my business off the ground based on these principles!

    Thanks Mike!