Learn how to determine your call quality, negotiate with partners, and scale your business with negotiation tactics and sales skills.
Ground Rules for Negotiating
Negotiation is critical; it has to happen in every aspect of your business. If you’re conflict-averse or scared of negotiation, you need to get over that real quick because if you’re not negotiating and your competitors are, you’re at a severe disadvantage. It’s your responsibility to correct that as soon as humanly possible. Now, I want to set a few ground rules for negotiation, and just so you’re aware, this is how I view negotiation, and I think you need to craft your style when it comes to this practice, but one thing is absolutely for sure, you must do it.
A common rule of thumb is that the most prepared party almost always wins in any negotiation. If you know more than the person on the other side of the table, then you’re in a better position to get what you need out of that negotiation than them. If we’re talking about this in a Pay Per Call context, unfortunately sometimes, especially if you’re going through a network or broker, you may not always know as much as they do. We’re going to talk about some specific tactics that you can use to make sure that you maximize your value in every single negotiation with every single partner you’re working with.
First and foremost, know your numbers. You need to understand what your calls are worth, you need to know how many calls you have, you need to know what your potential for scale is, and you need to understand over what timeline you can scale your campaigns so that you can have a discussion with the other party and ask them for concessions.
Most of the time if you’re a higher volume partner or you have the potential to be higher volume, it’s straightforward for you to negotiate preferential treatment with networks and brokers. But you need to walk the walk at least and talk the talk. Otherwise, they’re not going to take you seriously, and they’re not going to see you as a growth partner. If you’re newer and you’re not viewed as a growth partner, there is not a high likelihood that you’re going to get preferential treatment. The whole purpose of negotiation when it comes to Pay Per Call is to get preferential treatment and to solidify your partnerships at the same time.
That’s why we want to create win-win situations as much as we possibly can. Let’s define win-win for a moment: A win-win situation is where everyone walks away from the negotiation happy.
Some people are weak negotiators, and they’re going to let you roll over them, and they’re going to give you everything you want if you’re aggressive and you should be concerned about those situations because some people will not stand up to you in a negotiation and then afterward feel taken advantage of and resentful. That’s the worst case scenario you can be in because then they don’t want to do business with you anymore.
If you’re talking about an account manager or someone that works for a company, they’re not necessarily that impacted by the financial ramifications of your negotiation, so if they feel like you took advantage of them, you’re going to basically shut the door on all the valuable information and help that you could get from these people. You should always focus on a win-win scenario for everyone involved in the negotiation.
A lot of the times when working with a Pay Per Call Network or an affiliate network or a broker after you’ve sent them some phone calls, all you have to do is ask. Like so asking politely is the easiest way to win in a negotiation with a Pay Per Call Network. You just hit up your account manager and tell them something along the lines of, “Hey, I’ve been sending you a bunch of calls. Lately, it seems like you guys like the quality. My margins on this with you guys are meager because I work with some other partners and I would really like a payout bump so that I can be more competitive and I can try and scale this campaign for you.” And most of the time that’s it, all you have to do is ask. Over time you’re going to want to keep asking, and you’re going to have to engage in more advanced negotiating techniques, but if you’re new, the simplest way to get a win when working with a network or a broker is to ask for a pay bump politely.
Whenever possible, you want to do this in writing. That way you have some record of it, some log of it. Maybe you have an excellent personal relationship with your account manager, and you call them, or you do a Skype chat, video call, or a Skype call, and they tell you, “Yeah, I’ll give you a pay up bump.” Like, “Okay, great,” and then you go into their system and you see the payout bump, and that’s usually enough, but I highly recommend that you get some confirmation in writing so if anything ever happens, you have proof of it. You can, after the call, just simply text them or you can Skype chat them or whatever you use, email, and just say, “Hey, just to confirm from our call today, I really appreciate you working with me on this, we’re going to bump the payout on the whatever campaign to $12.50, right?” And then they’ll reply, “Hey, great call, yeah, absolutely, I’ve updated it in the system, whatever.” And then you have at least some sort of written receipt that you will be getting that pay bump. If there’s ever a dispute in the future or if they forget or whatever the case is, both parties are covered.
I want to notate something on that when it comes to contracts and agreements; it’s not usually one-sided; it covers both parties. Maybe your account manager forgets, it doesn’t happen, you have to try and figure all that out, well if you had something in writing, even as simple as a confirmation in a Skype chat, you’re never going to have a dispute and all parties understand and have a record they can look back on. If the network manager asks them, “Were you supposed to give them a pay bump?” And the account manager says, “Well, I don’t remember talking to them on Tuesday two weeks ago, and I never updated it in the system,” so the network manager’s going to be like, “All right, well, I guess they didn’t have a pay bump.” And I’ve seen this happen before and it’s not a big deal. Usually, you can work it out, but the best way to do that, again, is to have a note in writing so you can reference it. Then when you reference it to somebody, they’re going to go, “Oh, crap, well, we did talk about. All right, my bad. Let me adjust that for you. Here it is.”
Most of the companies in our space that you’re going to be dealing with, the more prominent brokers and networks, they’re honorable and so if you have something simple like that in writing and there ever is a dispute, they’re going to adjust it for you. Then as soon as you enter into even a micro-negotiation like this, you should ask the account manager, “Hey, when am I going to see that reflected in my account?” And they’ll say, “Oh, I’ll update it now,” or, “Oh, I’ll update it later.” Then you want to check inside of Ringba or whatever tracking platform it is and make sure that that payout is reflected in there and then you know it goes into the accounting and all that good stuff.
For ground rules, we always want to be willing to walk away from a negotiation. Any negotiation you’re unwilling to walk away from, you’re at a severe disadvantage. You need to have other options at all times so that you can say, “You know what? You didn’t want to work with me, all right, fine, I’m out.” Nothing changes people’s minds like pulling volume for a few hours or a day. Because if you’re running a couple of hundred calls a day and they won’t negotiate with you, you reroute those calls to another buyer, even at a loss, and bam, now their call center’s calling, complaining, they have all this capacity available and their calls dried up. They’re going to change their mind about that negotiation quickly. You always want to be able to walk away and willing to walk away from any negotiating table; otherwise, again, you’re at a severe disadvantage.
You also never want to make the first offer whenever possible in a negotiation. If I were an account manager at a network and a publisher came to me and said, “Hey, Adam, I would like a pay bump on this legal offer.” I would say, “Okay, great, what kind of bump are you looking for, what would help you take it to the next level? Give me some more information about your campaign so I can try and get approval from my boss to make sure I can deliver on that payout bump.” And so framed and positioned that way, now the affiliate has to give me what they think is a good payout bump, and I’m going to try and negotiate somewhere in a range between the top of what they want and the actual price that they’re getting paid now.
Theoretically, though, most account managers are not going to be highly skilled in negotiation, so you want to deflect to them and not give the first offer. If someone were to say something like I did, you would want to come back with, “Well, obviously when buying traffic, as you know, the more I can spend, the higher the volume I can do. If you have capacity available, I’d like to understand what the best you can do on this payout bump is so that I can go back and recalculate how much of a volume increase I can do based on the higher payout,” right? And so either one of these parties does not want to be the first one to give out a number because then you know where the other person stands. Now, if I am running a network and I’m making 100% on an offer, and the publisher doesn’t know that, and we’re paying him $10, well, I have an additional $10 to play with. If the publisher’s like, “Well, it would be great if I can get a 10% bump.” And we take him from 10 to 11, he’s going to be super satisfied and have no idea how thick our margin is. That’s why I want the other person to make the offer.
If the other person is more skilled than you or does this all day long and as an affiliate they probably are, it gives you more flexibility to communicate with them. It doesn’t take away from anything. It doesn’t put them in a losing situation, you still can have a win-win for everybody, any of those scenarios we just ran through are win-win but with text and chat, you have a little bit more control. If you want to take some time to think something through, maybe you don’t respond for a couple of minutes, and then you could always apologize, go, “Hey, sorry about that man, I had a phone call,” or whatever.
Then no matter what, when you enter into a negotiation, have a backup plan. If they don’t give you what you want, you need to know what steps you’re going to take in advance so that you can execute on them. You never want to walk into a negotiation anywhere in life, frankly, with a plan that’s like, “All right, I’m going to go into this negotiation, and I’m going to make it happen. That’s just it; I’m going to make it happen.” Well, as exciting as something like that is, like yay, what really happens in those situations is if you don’t get what you want, and you misjudged it and you don’t have a backup plan, and you don’t know what you’re going to do if they tell you no, you’re essentially in the worst position you could be in because you’re probably not willing to walk away. Thinking about a backup plan before you engage in any negotiation, whether big or small, puts you in the position where you will be able to walk away from it because you have a backup plan and then you can pull away.
To a lot of these account managers, if you pull away or you reroute your traffic, they lose commission. An account manager is directly financially compensated by your traffic in some way, shape, or form. If it disappears, not only does it make them look bad, they actually personally lose money and if you’re a more significant account or you’re a growth account, or you’re with a newer account manager, someone’s going to be scrutinizing their portfolio of accounts and they’re going to see that they lost your business. That does not bode well for them, so if you’re willing to walk away, it really puts you in the power position, and sometimes all it takes is a couple of hours of rerouting traffic, and you’re good to go. The key to a backup plan in negotiation in Pay Per Call, by the way, is your own call tracking. You need Ringba or something like it so that you can reroute those phone calls if someone’s unwilling to work with you or negotiate with you that at the click of a mouse you can take away from them and then they have to rethink whether those couple extra percentage points are worth it.
Network vs. Network
You have to be a little bit careful with this because in Pay Per Call the networks all work together in some way, shape, or form, but they are also competitors. You can pin network versus network by name dropping and the likelihood that they’re going to verify that information is low. First of all, they don’t want to ask their competitor if their competitor’s out pricing them on an offer or if they’re working with this specific publisher. Because if you’re bluffing them and they do that, the network now knows who to talk to for what type of phone calls and what payout they need to hit to take the business. It’s a Trojan horse, primarily, but it can happen where they communicate, you should be aware of it and prepared for it. But for the most part, it’s probably not going to happen.
The first tactic I want to talk about is blind price negotiation. If you take your current payout, no matter what it is, with any network and you add 10% to it, I guarantee you in Pay Per Call that you can get the 10% pay bump. The bare minimum that you can get out of any network if you come in flat is 10%. That’s because the networks are averaging 35-100% in the margin and sometimes higher. Whatever you’re getting, you can assume this is the bare minimum. If anyone offers you less than that, it’s a piss poor offer, and you should not take it. This is why we don’t want them to tell us the price first because you never know how much higher than 10% they’re going to come back, but that should be your bare minimum.
If you just ask them nicely, they’ll most likely give you at least 10% and then you can just thank them and build the relationship, strengthen your relationship with the account manager, maybe you come back in a few days, a week, get your volume up a little bit, and then you push for more again. This is not always a one-time fit scenario type deal, you’re going to want to continuously negotiate with networks, especially as you gauge your quality and the volume goes up. You have to remember that this is a volume based game, so the bigger you get, the more buying power you have, essentially, and the more you can demand.
What we’re going to do here is we’re going to go to Network A, and we’re just going to tell them that Network B also has the offer and that they’re paying you more. Now the first thing you want to do is make sure you know another network has that offer or a similar offer. Maybe one is branded, perhaps one is not, but you need to make sure that they both have a medical device campaign or they both have this legal offer, or whatever the case is because this is where you can trip up. If you say Network B has the offer and they’re willing to pay you more, and the account manager knows that Network B doesn’t work in the legal space, that’s where you’re going to make a mistake. Then they’re going to know you’re messing with them and you’re not going to have that leverage you’re looking for.
The first thing you need to do, again, is being prepared and know your stuff. You’re going to want to make sure you have accounts at multiple networks and relationships all over the place so that you can understand what network has what offer. If not, you need to do some research on some of those websites out there that list offers, like OfferVault. You can find other networks that have the offer; then you can start a relationship with them by going, “Hey, Network B, I’m running 100 calls a day with Network A on this campaign, can you beat their price?” They’re probably going to say yeah, and then you’re going to open up a door and have another network to go to. Theoretically speaking, if you do this correct, your backup plan is built in, but if you’re going to be lazy about it, just make sure the other network has the offer and then come back and tell your account manager that the other network is offering you 10- to 20% more of whatever or above what they’re publicly advertising. You could always shoot for the moon here; if you think they have a really high margin, you can go 30 points up, 40 points up, 50 points up, and see what happens.
If you want to find out what the wiggle room is on a blind price, you can come back to them and say, “Well, look, man, Network B offered me 60% higher at the same duration.” And see what happens. Worst case scenario, they’re going to tell you no and that, oh, well, maybe their direct buyer’s just desperate for calls or something, that would make sense, or perhaps it’s capped or something like that. But, by doing this, you’re going to see the account manager’s reaction. Now if they’re like, “Oh, they’re up 60 points, well, no problem, I tell you what, I’ll do 70.” Then you’re like, “Whoa, wait a second, what were the network’s margins really on this campaign?” Because the last thing a network wants to do is lose the business, so you want to press them to see how high you can get your payout. Because it doesn’t matter what your payout is, the network’s going to offer the same level of service to you because I don’t think that any network out there is looking at margins and then subdividing how they’re servicing customers. It’s just not something networks do; it would require a lot of work, it could cause reputational damage, there’s just no real right way to do that.
You want to press the network’s volume down as low as possible, because to the network, if they’re filling their cap, they’re winning. Like we talked about in the other lesson, the network wants to fill as much cap as possible because if they’re filling it, they maintain control of it and then when they stop filling it, that’s when they could potentially lose it. The last thing they want to do is lose your traffic because it actually may cost them the ability to have that capacity with the buyer, especially if you’re consistent. Being consistent also helps you with negotiation in this regard because the takeaway smashes them, and they could lose their buyer, and that’s not a good thing. Now the more significant the network and the more buyers they have on a specific campaign, the less this is a problem for them, but also the bigger you are, the more control over the network’s future you have, as well. You want to leverage that to get the most compensation you possibly can.
To recap on blind price. You have to be careful, do your research, make sure you know at least who the other network is that you’re going to tell them is offering you a better price, and you don’t necessarily have to give them the network name, but if you do, it makes you sound a lot more confident. Just think about that and work with the account manager appropriately or tell them, “I can’t tell you that over text, let’s hop on a call real quick. I don’t want to cause any issues.” Then you hop on the call, and you name drop, and then they’re like, “Oh, okay,” now it’s them versus the other network, and they want to win. If you can figure out which networks have rivalries with other networks, you can use this to your advantage because if there’s a rivalry there, they’re not calling the other network, and they’ll do just about anything to take the business away from their rivals.
That’s why you want these relationships with as many people as possible. Trust me when I say that in any business, there are rivals, especially in niche spaces like Pay Per Call where there’s a limited number of networks. There may be 50 networks total, a lot of them are going to have competition with each other, and they’re not going to talk back and forth, and you can leverage that for your gain.
Research price is essentially the blind price offer but by doing your research and whenever I used to do negotiations with affiliate networks many, many years ago, I would always use the research price route because the more you know, the more powerful you are in that negotiation. My goal was always to know more than my account manager or his entire team about the offer I’m working on. That’s not necessarily hard to do because a lot of these networks are holding 50 or 100 different offers, the likelihood that every account manager is a master or an expert on every single vertical or offer is low. By knowing everything front to back in the entire space and where all the other offers are at the other networks and what they’re paying out, where the rivalries are, you can position yourself to get the best price on every offer.
You’re going to do the research price model, what you want to do is you want to speak to three different networks and tell them, “Hey, I have calls in this legal vertical, or whatever vertical you’re in, and I am considering running them with you guys. I’ve been running this campaign for months, really quality traffic, other networks are happy with it. What can you offer me?” And that’s it; you let them make the first offer. If they’re like, “Well, what do you need?” You say, “No, no, this isn’t how that’s going to work. I’m offering you my business from another network if you want it, you got to make the offer.” And in that position, you can be aggressive about it. You can be like, “Look, man, I appreciate that you would like me to tell you where I need to be, but if you even want a shot at this traffic from your competitor, give me your best offer the first time.” Don’t give them a choice; make them make you the first offer. They’ll do it. They’re not going to be like, “No, I don’t want a shot at my competitor’s volume.” That would be insane, and they’re not going to do that.
Whatever that network offers you, you can assume that even after your hard upfront negotiation price check on it, you can get at least an additional 10% if you push them. Whatever they offer you, plus the additional 10%, is your baseline to go back to your current network and that’s your minimum that they should give you. But realistically, you should tack on an additional 10% above that, and now we’re talking about getting into some margins where you have a competitive advantage. That’s why you need to speak to at least three networks, get three real offers, don’t take their first one, negotiate, try and get those three offers 10 points higher, see who will take the highest, especially if it’s branded, because then the buyer’s all the same. If it’s not branded, well, you’re still going to have this wiggle room. Then the highest you’re going to tack on is an additional 10%. You’re going to go back to your current network and if you have to you could even make the first offer, at that point you could be like, “Look, man, this is their offer, you need to give me 10% more, or I’m going to reroute the traffic.
If they tell you no, that’s where we’re going to talk about the takeaway. If they tell you no and you have other networks in play which will buy the calls for the price you’re looking for, maybe those networks don’t convert as well, you don’t know, I would test some of your traffic with these other networks before the takeaway. But in my experience, being pretty aggressive about this gets you what you want anyway, and I was never scared to be aggressive about this. You have to understand that even if you make a little bit less money for a day or two, you can set yourself up for months or even a year of higher payouts if you do it correctly, so you should be prepared to walk away from the table and play chicken. I think that in negotiations, most people aren’t willing to do this. It can hurt relationships if you don’t do it properly. But if you’re transparent about it and you tell your account manager: “Look, man, I can’t turn away an additional 15% volume. I’m going to switch half and give you the next 24 hours to figure it out and then if you guys don’t want to match their price, which is all I’m asking for is a match,” you can bluff that. “Then I’m going to have to give them all the business.”
It’s just that simple. It’s a commodity; my phone calls are worth a lot; I need to be paid the most for them so that I can compete. If you guys can still do it, it’s profitable; we have a good relationship, you should do it. There’s no reason for you not to do it. I’m going to have that conversation with the account manager. If the account manager can’t do it, or they say they can’t do it, I’m going to tell them, “All right, well, loop in your network manager, let’s see if we can work this out because I like you guys. I don’t want to take the business away, but at the same time you understand it’s business.” “I need to build a competitive advantage so that I can grow my business. Now if you guys give me the pay bump I’m looking for, I’ll grow my business with you.” And so that’s basically what you’re saying there.
We’re first going to demand the price match; if they don’t do it, you’re going to have to push them. Then we want to be careful with bluffing; if it’s going to be the takeaway, we don’t want to over bluff. If we’re going to take the traffic away from them, we want to make sure that whatever we demand out of them is reasonable enough that they can afford it and that they still make some money. Something I want to point out here is even though I will always push a network, they have to make some money because if they don’t, well, why are they working with me? Why are they in business at all? And so I only want to work with networks that aren’t desperate, and I never want to put a network in a position where their margins are so thin that they’re not going to pay me. That’s why you have to be careful with bluffing, you don’t want the network to be desperate, you don’t want to strain your relationship too much, but you want to push it right up to the line so that you get the most value.
With the takeaway, you always have to have a backup plan. I will tell you right now that if you bluff the takeaway and you don’t take the volume away, you’re screwed in negotiations with those people forever. You are never getting them to move on you again. Never bluff the takeaway, you need to have another target configured in Ringba, ready to go, ready to click and reroute the traffic so that they don’t have a choice. You need to have your other account managers on Skype chat ready to go so you can be like, “Hey, you ready? I’m going to send you the traffic.” You need to make sure that if you throw the takeaway out there, that your backup plan is not only thought through, but it is ready. If they’re not down, you reroute. You reroute because nothing shows seriousness like pulling your traffic.
Nothing shows the network you’re going to do it more than actually doing it. When you pull the traffic, next time you come into a negotiation with them, they’re not going to mess with you because they know you’ll reroute the traffic. Throughout this entire process, though, you want to do your best not to be argumentative or overly aggressive, you want to try and be genuine and honest and work with these people and just be cool about this entire process. Because if it ends up where feelings get hurt, or people get upset, people are going to feel taken advantage of, then what you’re doing is you’re framing your longterm business opportunities in a box that isn’t going to help you. You want to try and make this process collaborative; it doesn’t have to be mean. It can just be simple.
The takeaway is a powerful tool, it needs to be used respectfully, but if you’re not setting yourself up for these three waterfall options of negotiation, you’re not winning. If one of your competitors is good at this and is doing this and you’re competing with them for click costs and advertising costs, they’re going to be able to spend more than you, and so their campaigns are going to be bigger, their business is going to grow faster, etc. You got to make sure you can do it.
Determining Your Call Quality
My favorite way to negotiate is by call quality. This is a situation where you are going to set yourself up, so you know so much more about the campaign than your account manager that they’re not going to be prepared on how to deal with the situation necessarily. Now, this also sets you up for understanding, finding, and negotiating with your direct buyers. Because your direct buyers and buyers of networks are communicating with them differently, they’re communicating about call quality and that quality is how you determine the price. The thing with the network is they may have a bunch of publishers and affiliates driving a bunch of different calls from different traffic sources with varying quality. If the buyer is not sophisticated or the network is not using tracking software that can adequately subdivide and segment their traffic, which a lot of them are not, the buyer is getting a merged stream of traffic, a blended stream of calls. Then those calls that the buyers are receiving, they’re lumping them all together to determine quality.
Your goal with understanding and determining quality is to see how your traffic stacks up against all the other people on the network. If your traffic is better than all the other people on the network and that converts at a higher rate, well, you deserve to be paid more money for that traffic. It’s that simple. If they won’t pay it and you know your metrics, like I’m about to describe to you, then it’s not complicated to go directly to the buyer and be like, “Hey, I know what your conversion rate is with this network, I know what your revenue per call is. My traffic’s higher quality. Pay me the same as them to get started and let’s work directly.” Then, bam, you got a direct buyer, and you got all the network’s margin, and you have a great relationship with the buyer because you know their business back and front and you can negotiate with them now and then find others, build your direct relationships.
How do you determine that call quality? That’s the tough one. I’m going to tell you right now that most affiliates are not doing this for two reasons. One, they may not have their own call tracking, then they can’t do this, and two, it requires a whole bunch of work to do it. You can hire a virtual assistant to do it, but I highly recommend that you listen to calls on your own and figure it out. Now, in Ringba, we’ve set this up so you can do it much quicker. Our playback system for recordings allows you to do all your other work throughout the platform while the recordings are playing back and you can speed up the recording playback to like two or maybe even three x. You can listen to the recording much, much faster, which allows you to figure out this information much, much faster and then you’re good to go.
What you want to do is listen to 100 unsorted recordings. You’re not going to half to listen to all of them, some of them are going to be short, but the purpose of this is to take 100 unsorted recordings in the order that they came in so that you can get a nice sampling if your call traffic. Now, the ones that are like 30 seconds or two seconds or anything under a minute or that didn’t convert; you don’t have to listen to all the really short duration ones. Unless you want to do some quality assurance at the same time, which I highly recommend and we cover in the quality assurance section of this course. But you can exclude the short ones, and then you head onto the longer ones. Now, if the average handle time of a campaign is 15 minutes, you’re going to want to take a look at every call that’s 10 minutes or longer, and you can assume that any phone call under 10 minutes or seven minutes is probably not a conversion.
What we’re looking for here is the actual conversion but not to the network, not your duration based conversion, not when you get paid but did the call center complete their goal which makes the call center money. What we’re doing here is trying to figure out the call center’s conversion rate. Did they actually get paid? As I said, we’re going to exclude the short durations based on campaign and if you’re unsure, listen to a bunch of call recordings, and you’ll get a handle on how to do this. You skip to the end of the really long ones or the longer ones or even some of, the shorter ones, you cut out the middle because that’s not necessarily important to you, and then you notate whether the call center got a sale or a registration, a lead, an appointment, sold their insurance package, whatever they did. You figure out if they actually made a sale.
Then you determine what their conversion rate is, you’re also going to notate how much they got paid if it’s a sale, so if they took a customer’s credit card or closed on a sale, you then can understand how much money the call center made. If they don’t, you’re going to need to do some research to figure out how call centers in your industry make their money and try and determine what every lead, appointment, sale, enrollment, whatever is worth to the call center.
Once we know the conversion rate on 100 phone calls, we’re going to determine the revenue per call. Now, this is a straightforward calculation; we’re just going to take the total revenue we think the call center made on those 100 phone calls and then we’re going to divide it by the number of phone calls. Now what’s important to keep in mind here is if you’re in a duration based or an IVR campaign and the call center never answered the phone call, or it never got through the IVR, well that doesn’t count in the conversion rate. You need to understand what the answered phone call conversion rate is of the call center so that you can better negotiate with the network and your direct buyers.
What you need to take a look at is the call center’s revenue per call and then compare your payout to try and figure out how much the network is making and also how much the call center could pay. If the call center’s revenue per call is $300 or $150 and you’re getting paid $6, the network’s either taking a massive margin, or they don’t know how to negotiate with the call center. The goal here is to figure out what the call center’s actual margin is. Now you can assume that the call center’s operating cost is probably in the range of 15- to 33% of their gross revenue and then everything else beyond that you have to try and calculate out what you think is their profit margin so you can negotiate with them. Now if you know more than the call center does or you know at least as much or have a general idea of how much money the call center’s making, then you’re going to be able to negotiate with everyone at a level that they’re not prepared for.
You’re going to use this as leverage to negotiate with not only the network but with your direct buyers. Especially if you’re getting started, you’re selling some calls to a network, and you want to move your business forward, you need to get your direct buyers and understanding your campaign from back to front is how you get with them. Because a lot of them don’t want to work with a single affiliate, but if you call them and you know their metrics and numbers and how their process works and what’s important to them, they’re going to be like, “Whoa, this guy knows more than the network. This guy’s super motivated; we need to work with this guy.”
When you talk to them the first time if you don’t know their business well and you’re like, “Well, I’d like to sell you calls, I work with a network,” they’re just going to hang up because, that’s an interview, pretty much. You need to know your numbers. The best way to do this is to not only figure it out on your own but ask the network. In most cases, the network’s going to have some information about the call center and if they don’t, ask your account manager to ask the advertiser manager what the metrics are so that you can figure it out. The first thing I’m going to do is see how much the buyer or the network or my account manager knows; I’m going to ask him, “Hey, what’s the standard call center conversion rate on these type of calls for your buyer? Oh, okay. Are all the publishers pretty much the same? What are their average conversion rates?” And they’re going to be like, “Oh, it’s 20%,” or whatever it is. Maybe they know, perhaps they don’t know.
If you do this over chat, even better because whatever they tell you is your negotiating baseline and they’re either going to have to tell you they were wrong, which no one wants to do, or they’re going to have to eat it when you come back with real information. You’re going to want to figure out what they think the conversion rate is or whatever information the network has so that you can effectively use it against them in this negotiation when you get all your information. Let’s say that we figure out the network thinks they have a 20% average conversion rate, and then we do the math here. You’re going to do what’s on this table here; it’s not rocket science, you’re going to listen to calls, you’re going to have your virtual assistant do it, again, I highly recommend you do it, at least the first time. It’s this simple. Call number one, sale, no, amount zero. Call number two, sale, yes, they made $345 – three, four, five, six, seven, eight, nine, 10 through 100.
Then we take the number of sales, three, versus the number of calls, 10, it’s a conversion rate of 30% for the call center, and if they did $884 in gross revenue on my ten phone calls, that means the call center is making $88.40 per phone call. Maybe they’re paying you $6, perhaps they’re paying you $10, I don’t know just what the metrics are of this fantasy campaign, but if I have this information and I know what the network is paying me, now I can extrapolate what the network’s getting, what their margin is, and how far I can push the negotiation. Then I know more than my account manager, I can get extremely aggressive with him with numbers and information, and they’re not going to be able to dispute it.
Let’s say for a moment that you look at this and they told you that the average network conversion rate for their calls in this vertical is 35% and yours are coming back at 30. Or let’s say it’s 40 and yours are 30. Chances are they do not know what the call center conversion rate is on your specific traffic stream unless they come back and specifically tell you, “Yeah, the average is 40%, and yours is 30.” If they do that, then you know that they’re operating at a very high level, which is extremely rare. That’s where you chill out, and you talk to them about how do I increase my quality, right. You improve your quality, then you come back and negotiate. Now, if they’re like, “Yeah, the average is 40,” and you’re like, “Oh, okay, cool,” and yours is less, negotiate anyways. But don’t talk about quality, they don’t know that yours is any worse than anybody else’s. You assume that your calls are quality at that point, you negotiate anyways.
If their average, if what they tell you is 20% and yours is 30, after looking at this, you need to come back with them and be like, “Hey, your average is 20%, mine’s 30%. That means that my phone calls are 33% higher quality than all my publisher competitors, so at a bare minimum, I should be getting a 33% pay bump. If that doesn’t work for you because the margin’s not there, I need you to go back to your buyer and renegotiate your campaign for my traffic because my conversion rate’s significantly better than everyone else’s. I need you to do that or I got to find another partner because neither of us should be making less money because my calls are of higher quality. We should both be making more money, right?” And they’re going to be like, “Yeah.” Okay, great, well then they go back to the buyer, they negotiate a higher price for your calls, and you’ve made some progress.
Either way, information is power, and if the network doesn’t know, but you do, use it against them. If you know and the network doesn’t know that yours is better and higher quality, use it against them. They’re not going to validate what you tell them for the most part. You want to be careful about bluffing in these circumstances. You should know your real numbers. But my point is and will always be, always negotiate. Figure out a way to position yourself so that you’re a quality long term partner, they need to keep you, and if they don’t take care of you, they’re going to lose you. If you do that, every single network and every single buyer, when done respectfully and professionally, will give you more money for your calls and then that way you can create a competitive advantage in the space so you can outbid and out operate all of your competitors.