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How much would you pay for sales leads?

How much would you pay for sales leads?

 Hello,

I have been offered sales leads from a friend and colleague who has sold her practice but is still receiving sales enquiries. She is asking for the first year's fee as commission for the lead.

As I have no experience of this, please could you tell me if this is a good deal or how much I should be prepared to pay for the leads?

thanks

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04th Mar 2010 20:27

Yes

I've always thought this was reasonable - as long as that would mean zero if you didn't get the client!

 

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By Anonymous
04th Mar 2010 21:02

Thank you

 thanks Peter. So as long as the client stays with me for more than a year, I should be able to recoup on the investment.

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05th Mar 2010 09:23

i wouldnt pay that much!
Surely your friend can't expect you to pay the first years fee as commission to get the client?

You would only pay 1 x gross recurring fees or a bit more to buy a practice which has an established relationship with their clients.

I would offer half the first years fee, and pay it when you get paid.

If they won't do that, then spend the money you would have paid for these leads on a decent website and marketing campaign and you will get a much better return.

Pm me if you want some more advice, for free.

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05th Mar 2010 13:03

40% to 60% of first year's fees

I would suggest a maximum of 40% to 60% of the first year's fees or £200 per lead because this is what you could expect to pay from direct marketing BUT I would suggest you have your own cost of sale worked out as part of your practice development plan.

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05th Mar 2010 13:06

Qualified leads

Yes, I agree - that is too expensive. If she wants to do the courting & some of the work then thats no so bad!

 

Accountants Solihull | The Hughes Partnership

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05th Mar 2010 13:18

That's interesting

I have just offered someone 10% as an introduction fee for giving me some tax consultancy work which seemed fair to me as I am always giving other advisers work and recommendations and think nothing of it.

I tend to be quite easy going though, because I work on the assumption that "do unto others..." and so if I do you a favour and recommend you to someone, I would like to think that you would do the same back.

Slightly different if these were her "tried and tested clients", in that case the hard slog has been done in getting the client and forming the relationship.  As they are not, they are just leads you are going to have to do that all important leg work. Why not work on a scale of say x% if fees come to under £x and y% if fees exceed £y?

Virtual tax practice support and know-how for accountants: www.rossmartin.co.uk

 

 

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05th Mar 2010 13:24

50 per cent

If she is passing leads on to you and you then have to do the leg work to meet and sign up the client, often spending time on leads that do not lead to business, then I would say 50% is the rate. On the ther hand, if existing clients are being pased over to you and you then take them on, this is effectively a sale of fees and it's then more like 100% of the fee. However, it sounds like it's the first scenario, so 50% it is.

If you were to pay a telemarketing company to generate leads for you, one of the offerings I've seen is that you pay nothing for the leads/meetings, but 20% of the annual tax/accounts fee on signing up the client and 30% a year later.

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By Anonymous
06th Mar 2010 09:38

As others have mentioned

You need to distinguish between:

- established clients of a practice - the sale of a block of fees, say - who may continue to generate many year's fees, and

- enquiries which are pointed in your direction, which may not even lead to business

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06th Mar 2010 09:49

Don't you think it's the wrong way round?

I've always felt the fees of another practice's clients are less valuable than the fees of somebody who actual wants to be your client.

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