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.
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”.