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Thread: Value of Leads

  1. #1
    Join Date
    Aug 2004
    Location
    Alberta, Canada
    Posts
    517

    Default Value of Leads

    I am getting several good leads and forwarding to this new company (new employer). They had suggested that they would put in place a finders fee but have not come up with anything yet. Any suggestions? How far should I take these leads without a fee in place. Part of me knows that if the company does well so will we and so who cares. The other entrepreneurial part of me wants to recover some of our marketing and also wants to ensure recognition for generating leads - especially if I take on some basic pre screen and make a good initial impression.

    I put this letter together to simplify my role and respond to email enquiries:

    Dear Clients and Contacts:

    In June 2009 xyz was offered a position with abc as a project manager. We have been in relationship with abc for the three years of operating xyz and are excited to join forces with such a stable company. Further xyz s is very happy to be in a position where he can focus is on his best skill set – building and managing projects.

    We have been forwarding all of our leads to abc and suggesting that potential clients can request xyz as a project manager. I am very confident that xyz is a key player for abc but I am also impressed with the team of people working for abc. They have several quality Journeymen on site.

    XYZ is in his truest best form building and focusing on projects and quality construction. ABC is a larger company with strong backing and support in the areas where we were not strong.

    Thank you for your enquiry – please contact name/J as per contact information below. As well let me know if I can forward your contact and project information to him directly.

    Thanks,
    Nicole


    I plan to use this for the enquiries that come by email. I have also considered doing a mail out in the late Fall to generate leads through slower season.

    Your thoughts?

    Nicole

  2. #2
    Join Date
    Jun 2004
    Location
    Portland, ME
    Posts
    6,302

    Default Re: Value of Leads

    I'd run it by ABC if you haven't sent it out already, just to keep things straight. He may not appreciate all the pieces of it, although you did a good job of expressing your confidence in the company in general, not just B's role in it.

    There's no way to know what ABC is going to give you for a finders fee w/o asking. But I'd also say that a super who brings his own work with him is a hell of a lot more valuable than one who doesn't.

  3. #3
    Join Date
    Jun 2004
    Location
    Anchorage, Alaska
    Posts
    738

    Default Re: Value of Leads

    We've hired lots of former contractors over the years. Generally we don't end up working with their former clients. The reason: their former clients are generally too cheap, which is why the contractor is no longer in business. When I do have a situation come up where we have their former client become one of ours, I pay a percentage of the net profit at the end of the job. That amount is worked out before the job begins with the former contractor. I do prefer the former contractor be the lead carpenter on that job since they already have a relationship.

  4. #4
    Join Date
    Aug 2004
    Location
    Alberta, Canada
    Posts
    517

    Default Re: Value of Leads

    Quote Originally Posted by Dancing Dan View Post
    I'd run it by ABC if you haven't sent it out already, just to keep things straight. He may not appreciate all the pieces of it, although you did a good job of expressing your confidence in the company in general, not just B's role in it.

    There's no way to know what ABC is going to give you for a finders fee w/o asking. But I'd also say that a super who brings his own work with him is a hell of a lot more valuable than one who doesn't.
    We already have the go ahead on the letter and I realize that i may have pumped up B a little more than they might like - though I did intentionally put in the other.

    We are completely ready to add value to another company - no one foot in and other out. I just hope to pays off as B is confident that it will. Have worked for many companies with empty promises or no promises.
    N

  5. #5
    Join Date
    Aug 2004
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    Alberta, Canada
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    517

    Default Re: Value of Leads

    Quote Originally Posted by Stacey View Post
    We've hired lots of former contractors over the years. Generally we don't end up working with their former clients. The reason: their former clients are generally too cheap, which is why the contractor is no longer in business. When I do have a situation come up where we have their former client become one of ours, I pay a percentage of the net profit at the end of the job. That amount is worked out before the job begins with the former contractor. I do prefer the former contractor be the lead carpenter on that job since they already have a relationship.
    I realize that some of our client base will not be a match and I have another company in mind for those (also trying to work out a ff system - they have put the ball in my court asking me what I want). Some of our clients will follow B no matter what the price point. Some will be well suited for this new company and perhaps more satisfied than they were with us. It has been suggested that a fee will be paid out but everybody is too busy with busy season to get to discussing this.

    Do you have any suggestions for a reasonable fee? Have you used a sliding scale depending on the size of project. I have no desire to get rich just be nice to make a couple of hundred here and there.

    Thanks - Nicole

  6. #6
    Join Date
    Dec 2005
    Location
    Michigan
    Posts
    7,549

    Default Re: Value of Leads

    Check local law. In my state, you cannot be paid a commission or fee unless you are registered as a salesperson for that builder/contractor. And you can only sell for ONE contractor.

  7. #7
    Join Date
    Jul 2007
    Location
    Northern Virginia
    Posts
    235

    Default Re: Value of Leads

    Nicky,
    You managed a small business... what would you give for the leads?

    I thought about it and a gift card to a good restaurant would probably do the trick. http://www.ruthschris.com/GiftCard
    John

  8. #8
    Join Date
    Aug 2004
    Location
    Alberta, Canada
    Posts
    517

    Default Re: Value of Leads

    I will have to look into the laws. We were very generous about everything in our business including the occasional finders fee of $200. for the average kitchen reno.

    I just forwarded a lead that is worth $2,464,000.00. long story but for real. Is that worth a couple hundred dollars?? I realize that they will have to work harder than me to turn that lead into a profitable job but if I had somebody feeding me leads for a year it would have been worth something - that is for sure.

    The Realtor at my networking events gave all leads that resulted in a sale $500. finders fee.

    Its okay - i got it figured out and will figure it out. Just looking for examples and ideas from those that have worked this way.
    Thanks

  9. #9
    Join Date
    Sep 2004
    Location
    Bergen County, NJ
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    4,410

    Default Re: Value of Leads

    Quote Originally Posted by dgbldr View Post
    Check local law. In my state, you cannot be paid a commission or fee unless you are registered as a salesperson for that builder/contractor. And you can only sell for ONE contractor.
    Oh no...that's like the bat signal for Dick. He'll be here momentarily!

  10. #10
    Join Date
    Jan 2007
    Location
    Louisville, KY
    Posts
    3,771

    Default Re: Value of Leads

    Personally I don't play this game. It's very difficult to keep both parties happy.
    Louisville Exteriors
    Professional Installers of:
    Siding | Replacement Windows | Roofing | Hand Rails | Gutters | And More!

  11. #11
    Join Date
    Jun 2004
    Location
    North of Atlanta
    Posts
    828

    Default Re: Value of Leads

    That's what I was thinking. I'd let the company make an offer and smile and say thank-you, whatever it is. You run the possible risk of having someone thinking you're ungrateful for the job that you (hubbie) has otherwise.

  12. #12
    Join Date
    Aug 2004
    Location
    Alberta, Canada
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    517

    Default Re: Value of Leads

    For sure - whatever they would offer would be just fine with me.

    Ultimately we really want to see the company succeed. One of the main guys is a friend and former colleague. We want the company to succeed and we want to be a part of that success.

    Mostly I am trying to gauge how far do I go with the leads I am recieving. I could just put on the answering machine - "no longer operating" but I have left it as is so that I can connect with callers and forward leads. I am finding this simple phone call to take more time than I would have figured and so would like a compensation (they suggested it first - not me). Then of course is the obvious - extra money is helpfull.

    We are very gratefull for the job. Company is growing with 10 projects on the go and a recent mass hiring. I hope they can keep up as I certainly can atest to an understanding of the work involved!!!! I hope I have not left that impression (ungratefull).

    Thanks and cheers!
    Nicole

  13. #13
    Join Date
    Jun 2004
    Location
    North of Atlanta
    Posts
    828

    Default Re: Value of Leads

    No not at all, I think we all realize that. It's just with starting at a new place, it's probably best to feel the situation out very carefully as you never know how everyone will take "negotiations". Good luck.

    J

  14. #14
    Join Date
    Jan 2006
    Location
    Southwestern Vermont
    Posts
    1,972

    Default Re: Value of Leads

    If B is the new employee and has the working relationship with management it may be better if it were he who initiated the discussion with the execs; "I'm still getting leads from new & repeat customers, how do we work thru this process? I can pre-qualify them..." etc. That way he can feel out in a face-to-face meeting whether they're amenable to some sort of referral fee or they expect him to fork over the leads as part of his good will.

    IMO, if you and B aren't on the same exact page as to how it's handled & communicated his new employer 'might' view it as the new guys wife is shaking down the company or inserting herself in the business when she has no business doing so...it could get messy.

    If you're looking at a fixed fee of a couple hundred $$ for a lead that leads to a signed project it's probably short money and not worth the potential upset with the new company. If you're thinking a % of profit or something substantial at job completion for the lead then you have alot of sensitive discussions ahead of you.

    -Norm

  15. #15
    Join Date
    Aug 2004
    Location
    Alberta, Canada
    Posts
    517

    Default Re: Value of Leads

    Thanks Norm - that gives me something to think about.

    I wanted to mention that an email was sent to me with this note:

    "Also, I wanted to mention that I talked to my partners and there is defiantly a capacity for a finders fee for sending in leads that pan out. I’ll need to get the specifics down on paper for you when I get back. "

    It was sent about one month ago and so I have since about a week ago asked about it directly and then once (yesterday) indirectly with no response. I understand that they are smoking busy and so I am not upset with the lack of response. Lets just say again that I am finding it to be a little more effort than expected and I am making more effort because of the potential reward. I know that eventually I have to let go of all of this past business stuff but................maybe I am hanging on a little.

    Anyway thanks for the food for thought. I figured I had not left any bad impressions here. I hope I have not left any with ABC.

    I will step back - keep forwarding leads and leave it to them to make the offer or not. In a while I will reevaluate and possibly just change the message on our machine. Perhaps even to redirect to ABC but takes the effort away from me.

    I have been thinking that when we were in business had another Contractor been forwarding us leads as I have been (at least two to three a week) things would have been a lot easier for us. On the other hand had we been maxed out in our marketing/sales budget I might not have had the funds to put out. As well if we had more leads than we could handle the benefit would have been very small.

    Ultimately it is a bonus for me to make a little extra money - pay for those ads already out there that I pay for monthly. All the same I would never make a fuss nor would I make it difficult.

    It is very interesting to be an employee after all of this time. And yes i realize i am not actually the employee here but I am quite sure our friend expected my efforts for a while untill thing settled down.

    Thanks as usual.
    Nicole

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