“So You Wanna Be a ‘Local’ Internet Marketing Consultant (Pt 2)”
By Anna Johnson on December 30th, 2008Yesterday, we talked about the exciting opportunities presented by providing Internet marketing consulting services to local businesses. There has probably never been a better time to get involved in such a business. But there is, however, a MAJOR downside to being a local Internet marketing consultant.
A downside that should not be dismissed lightly, given that it’s probably a major reason why many people want to start an online business in the first place.
The downside is that, depending on how you approach it, being a consultant is really just like being an employee. You get paid for your time. You don’t work, you don’t get paid. Even if you base your fees on a project basis, rather than an hourly rate, your income still depends on your ability to work.
I stress this because many people who start Internet businesses want to escape jobs. They specifically don’t want their income to be based on their time. On the contrary, they want to be paid ‘when they sleep.’
Unfortunately, most local businesses won’t pay you to sleep.
Also, as a consultant, you’ll most probably need to do some good old fashioned selling to get clients. Whether it’s walking into local businesses and introducing yourself, sending letters and following up with telephone calls, attending networking meetings, conducting local seminars, going to appointments, or doing a host of other things… you won’t necessarily be doing what you love (Internet marketing) to get YOUR clients. Which means that if you hate the idea of personal, one-on-one selling… being a local Internet marketing consultant may not be for you.
Now, there are exceptions to this. You can set yourself up in such a way that clients come to you via online marketing (we’ve certainly done that)… but at some point you will still need to be able to sell one-on-one. Even if it’s over Skype rather than in-person. (Although most local businesses will expect to meet you in person since you are, after all, local…)
Okay, so let’s assume that you’re happy with, and indeed welcome, the idea of meeting with – and selling clients – in person. There’s still the issue of having your income limited by how much you can work.
Fortunately this can be somewhat overcome in a number of ways.
Firstly, you can establish a fee arrangement where you get a percentage of the ‘deal’ or a percentage of revenues or gross profits of the business. A percentage of the deal is where, for example, you get some kind of commission based on a particular sale – or a certain source of sales – that you bring in.
It’s much like how real estate agents and mortgage brokers get paid. Alternatively, if you’re running the entire marketing for a given business, you might be able to get a percentage of its entire revenues or gross profits.
I particularly like the the first kind of fee arrangement. If, for example, you control the website that generates the sales, you’ll be able to ensure you get paid your share. The second type can be more difficult to sustain.
It’s often businesses that don’t have any money that want you to agree to a revenue or gross profit share… and what’s more, because they don’t have any ‘skin in the game’ they won’t help you help them.
And if and when they do start making a lot of money, those very same businesses often want to back out of the deal. They no longer want to give you that revenue or profit share because what seemed like a percentage of nothing to begin with, is now worth a lot of money.
Unless you have control over sales – or have an ironclad agreement in place – you’re on shaky ground at this point…
Having said that, I can’t see how you can really make anything much above 6 figures unless you use some kind of percentage deal. Remember, you’re consulting to local businesses here. They don’t have the same kind of budgets as do large corporations.
Having personally consulted to both kinds of business, I can tell you there’s a world of difference between what they each expect to pay for THE VERY SAME SERVICE.
With a few percentage deals in place – specifically those where YOU control the traffic source and can, at least, monitor sales activity – I think you can certainly grow your consulting business into high 6 figures, 7 figures and beyond.
I stress, however, that you want to own the traffic and be able to track, if not control, sales.
Once you and your clients start making considerable money, it’s almost inevitable that they will start asking what exactly you’re doing for the money they’re paying you. You want to be able to smile and say, ‘well, if you don’t want all the traffic and sales I’m sending you, then perhaps your competitor down the street would…’
(In a nicer way than that, of course).
A third option is to hire staff. This is, of course, how most services businesses achieve both leverage and scale. By employing others to work for you, you CAN make money and sleep.
And then, another option is to license or franchise your business system to others.
Now, this will mean you won’t really be in the Internet marketing consulting business anymore – you’ll be in the Internet marketing consulting license or franchise business – but it’s definitely how a lot of service businesses grow to mammoth proportions… and allow their owners to ‘make money while they sleep.’
Of course, you may not want to hire staff or go into licensing or franchising – and these all have their own challenges – but, as you can see, there are several ways to overcome the income limitations typically associated with consulting businesses.
There is also at least one other way in which you can be a local Internet marketing consultant, earn money based on what you do (regardless of whether you get paid by the hour, by the project, or based on a percentage of some kind), and NOT have to hire staff or try to license or franchise your model.
This last way is something we are currently exploring and I’ll share more on that in a later article…
July 1st, 2009 at 1:01 am
Anna,
These were two excellent articles that I enjoyed very much. You have some great insight and perspective. Now that it’s six months later I wonder if you have any updates.
I’m starting a local internet marketing practice here in Central Maryland, primarily because I’ve become addicted to the process, and I’m hoping to get others to pay for my habit.
I always like to figure things out in advance, which usually doesn’t work because you often have to test things to get answers. BUT I’m really wondering if You have a strong opinion on the following question: What are the best prospects? What industry/service/type of business? What size? What age?
Right now I’m thinking tradesman type business like plumbers might be best. Although I think Dentists and Chiropractors might be good.
Let me be more clear: if you were going to cut a percentage deal, what type of business would be your fist choice (and maybe second and third choice)? One issue you look at is the ability to track sales by source. If most website visitors “walk in” to the store to buy, do you get credit for the sale? What is measured? How is it measured?
Also, what do you mean when you say: “control sales” — how does the web marketing person control sales?
Anyway, just thought I’d open a discussion to see what you think.
thanks,
Leo Vidal
July 1st, 2009 at 6:42 am
Hi Leo, thanks for your comments! As far as choice of customers goes, I would opt for the types of local businesses that advertise heavily in the local newspaper and/or Yellow Pages and who would do much better online (i.e. because people are increasingly looking for their services online). Tradespeople, professionals, car dealers, florists, etc. I would also look at somewhat obscure businesses that people are searching for online e.g. trophy makers but are somewhat unsophisticated in their online marketing (i.e. meaning it will be easy for you to compete with). I wouldn’t necessarily discriminate/specialize in one industry or another to start with – see what seems to work first.
In terms of ‘controlling sales’ the idea here is to own online marketing process e.g. from the pay-per-click ads to the website that then sends leads to the local business. Because you are generating the online leads, you can ensure you get paid in a couple of ways. Firstly, because you can easily switch off the leads (and divert them to a competitor) your client has an incentive to pay you your due. Secondly, you can also track leads. You might even have an arrangement whereby you get paid per lead, rather than per sale.
There are quite a few ways to track leads. For example, if you are sending people to your own website you can get them to fill in a form in order to obtain further information or a free report, etc. When they do so, you can get a record of the lead and at the same time send their details to the client who can then follow up. This can be done automatically using an autoresponder. That’s just one example, though. You can also use specific phone numbers and promotional offers that let you and your client know that a given lead/sale came from your efforts.
Hope this helps!
July 1st, 2009 at 7:37 am
Hi, Anna,
Thanks for getting back to me and yes, your reply was very helpful. It has gotten me thinking about what can be done, i.e. the possibilities with respect to lead tracking. The thought of sending people to my own website hadn’t even occurred to me, although giving out freebies is a big part of my plan for list building. My review of the BEST websites in these trade areas in my local area indicates that NOT ONE of them gives out free reports or has a newsletter, and I only saw one out of several dozen that have a form to capture names and emails. Amazing. So you are right that some basic changes could yield big results.
I have two friends with small businesses selling big ticket items. One sells plasma TVs and home theatre systems, and the other sells musical instruments, including high end pianos. It occurs to me that this is a great time of year to approach people like that because they can build an online presence that increases continually between now and the Christmas shopping season.
And these two are ones I would get a commission deal with since I don’t want to ask them for money upfront. It’s funny how one gets all paranoid thinking about how someone else (even a friend) may screw them out of money! Of course, it’s not paranoia if they really are trying to do that, right? So I have to figure out how much commission and what system we need to have to track things, and make it all friendly and nice.
It’s fun to exchange these ideas with someone. I wonder if there’s a blog or forum on this topic of being a “local” IM person? Do you do a lot of blogging? Is your main business on the web or with local businesses?
At heart I’m a writer, so recently I wrote a few things on this topic to build credibility and get links to the Tax Doctor. Yesterday i had a PR published and distributed through PRPoint here:
http://www.pressreleasepoint.com/new-report-shows-internet-marketing-will-save-some-small-businesses
and that gives a link to an article i had published/distributed through submityourarticle, which is part one of a series. Called: “Local Internet Marketing: Take The Sniper Approach.”
The second part I’m waiting a few days to send out, and this is where I list my “Top 10 Strategies for Local Internet Marketing” I’ll send you a copy.
Then what I’ll do is mail, fax or email copies of my PR and articles to prospective clients with a handwritten note: “Thought you might be interested in this information.”
You’ll see in the PR that I mention I’ve got a list of over 800 keywords people use when looking for a plumber to do something. Google KW search does a fine job, I think. (A lot of them are local KW)
Thanks so much for getting back to me and reading my rambling comments. It is helpful. If there’s anything I can do for you, please let me know.
Have a great day or night or whatever it is there wherever you are. (Down Under?)
Leo
July 1st, 2009 at 8:03 am
Great to hear Leo! I can see you’ll do well. Of course, there will be hits and misses, but you’ve already made a great start. We are primarily online, but have consistently provided online marketing services to local clients and not-so-local (i.e. other side of the world) clients over the years. Keep in touch