The other day a client, JM, suggested that, instead of my usual flat fee for copywriting, he would compensate me based on performance. Specifically, I would get a royalty based on sales.

He explained, “If you are paid based on results, wouldn’t you be incentivized to work harder and do a better job?”

I told JM the fallacy in his thinking: It implies that, for clients not paying a performance-based bonus, I do sub-par work.

“And that’s ridiculous,” I told him. The truth is: I write the absolute best piece of copy I can on every job I get, whether the fee is flat or royalty-based, high or low.

Why do I pull out all stops on every copywriting assignment I get, regardless of method or amount of compensation? For 3 reasons.

First, to do otherwise would be irresponsible, unethical, and, in my opinion, cheating the client.

Second, the better the copy I write, the more repeat business and referrals I get. And it helps build my reputation.

Third, when my copy performs well in the marketplace, clients give me great testimonials and speak well of me to their colleagues, many of whom also need copy written.

Yes, I know a few writers who say they are only happy if they are getting a royalty based on sales or another performance metric.

The flat fees I charge are not outrageously high, but they are not cheap either. So I feel well compensated working for the fees I earn. I may not be getting rich, but I earn a comfortable living.

Here is the primary situation in which I think a royalty makes sense: the client will be testing and tweaking the promotion on an ongoing basis, and they want me available to help with this.

That tweaking and ongoing testing is not covered in the flat fee I charged to write the copy.

So the client would have to pay more money for additional copywriting they require.

Except, if the promotion is paying me a royalty, I have an incentive to tinker and tweak—split testing headlines, leads, offers, visuals, form placement, etc.—for no fee, since the royalty compensates me for doing the extra work.

But in most instances, a flat fee is the best deal for the client and fair to both of us.

Bob Bly is the author of “World’s Best Copywriting Secrets” and has written copy for more than 100 companies including IBM, Boardroom, Medical Economics and AT&T. He is the author of more than 75 books and a columnist for Target Marketing, Early To Rise and The Writer. McGraw-Hill calls him “America’s top copywriter”.

I have earned hundreds of thousands of dollars in royalties over the years on books I have authored for publishers and copy I have written for clients.

Yet I advise you to be wary of most copywriting clients who offer to pay you a percentage of sales instead of a flat fee.

Here’s why…

To begin with, you never heard of 99% of the clients who offer you such a royalty arrangement. So you have no way of knowing whether they will keep their promise.

If they don’t, what can you do? They won’t open their books or shopping carts to you. And it’s easy enough for them to cook those books and tell you no royalty is due.

The clients I DO write for on a royalty basis are mostly large direct marketers that routinely pay royalties to their copywriters. Some of the top copywriters in the country write for them.

Because paying royalties is a regular thing for these companies, they have the systems in place to accurately track both sales and royalty payments. And they have reputations in the field that warrant your trust in them.

Often a small company I never heard of will say to me, “We would rather not pay you a fee up front, but we’ll pay you a percentage of the sales your copy generates.”

When I turn them down, they become belligerent: “What, don’t you believe that your copy works?” they ask arrogantly.

I have several answers for them. The major one: “I already have more than enough clients lined up happy to pay my regular fees. What’s my incentive to work for you for no money?”

I also explain that for me to work for no fee up front would make me in essence an investor in their company, until I am paid in royalties—and I am a freelance copywriter, not an investor.

One small direct marketer offered me a cash bonus if the direct mail package I wrote for him became his new control. Sure enough, my package beat the control by 50%.

But when I asked him where the bonus check was, he replied: “Oh, I won’t make your package the new control until it beats mine in a few more tests”, not understanding that beating the control automatically makes the test mailing the new control. And so I didn’t get my bonus for months.

A mistake small clients make in trying to hire a copywriter is to offer a royalty instead of an up-front fee, not understanding that the large direct marketers—the serious players—offer an up-front fee PLUS a royalty.

And the big players do not reduce the up-front fee with the lure of a royalty. They pay my regular fee along with the royalty.

You may ask why a company would pay a writer’s normal fee and then offer them a royalty on top of that.

Some do it because they think it gives the writer an incentive to do an extra good job. But I always do the best job I can on every project I take on, no matter what the fee.

The real reason for a marketer to pay a royalty on top of the writer’s regular flat fee is, as my client RJ told me, to “buy a share of the writer’s mind”.

When a copywriter gets a royalty, he has a financial incentive to make sure his promotion continues to run, which it will only do if it continues to outperform other promotions for that product the client is testing.

If response starts to fade, the writer getting an ongoing royalty is motivated to offer tweaks and recommendations to the client at no extra cost as a way of ensuring that those royalty checks keep coming.

Without that bonus incentive, the copywriter has no motivation to think about how to prolong the effectiveness of his winning promotion, and so doesn’t.

When you get a royalty check and statement every 3 to 6 months, you know how well your copy is performing. When you do not, you are in the dark, and often have no idea whether your promotion is a winner.

I recently got an e-mail from an old client telling me he is still using the ad I wrote for him 10 years ago. If he had not e-mailed to tell me, I would have no idea. Another told me he built a successful business based on the strength of one letter I wrote for them. Again, I had no idea, because it was a flat fee he had paid me years ago.

Bob Bly is the author of “World’s Best Copywriting Secrets” and has written copy for more than 100 companies including IBM, Boardroom, Medical Economics and AT&T. He is the author of more than 75 books and a columnist for Target Marketing, Early To Rise and The Writer. McGraw-Hill calls him “America’s top copywriter”.

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Dear Friend,

How does someone like Lorrie Morgan-Ferrero of Red Hot Copy get Dan Kennedy, John Carlton, Mike Fortin, Sylvie Charrier, Perry Marshall, Alexandria Brown and Harlan Kilstein to agree to be part of a f*r*e*e teleseminar series on copywriting that doesn’t even promote them?

Kind of suspicious sounding, wouldn’t you agree? Usually it would take something pretty enticing to get such brilliant marketing minds to share their knowledge with NOTHING in it for THEM. So it got me thinking. Was it money? Fame? Or something else.

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This week she interviews Alex Mandossian about the power of testimonials in copywriting and the legendary Dan Kennedy himself.

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Sincerely,
Nelson

P.S. As you probably already know, copywriting is the single most expensive business skill to outsource…and the one directly responsible for making the most money in your business. Listen in on what these masters have to say.


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