7 {{ upvoteCount | shortNum }}
7 {{ upvoteCount | shortNum }}

Jay Abraham's percentage model vs the $1000 per month thang!

by phil.wheatley
5 replies
Hi Offline Gangsters

I was watching a video recently about Jay Abraham whom we all know has made 7 billion in total profits for the companies he has helped over the years....

...now, most of us go for trying to lock a client into a monthly payment, sometimes as much as $1000 a month or more. However, this can be quite a hard sell. Also, in some situations, we're probably selling ourselves short!!

Now, what Jay does, is he just charges a percentage of the PROFITS he makes for the company. This way there isn't really any risk for the potential client.

Hmmmm, does anybody know if he does this for just a short period? How to measure the extra amount he has made them?

Also, is anybody here using this model? Would love to hear your thoughts.

Beers
Phil
#abraham #jay #model #month #percentage #thang
  • Profile picture of the author Claude Whitacre
    I've used it a few times, in the beginning, and it hasn't ended well. It works far better with large companies with bookkeepers that aren't the owners.

    They write checks every day. The sole proprietor gets tired of writing you checks after the work is really done.

    I used to pitch a "profit share on additional business" offer, so I could switch them back to a set fee offer.
    Signature
    One Call Closing book https://www.amazon.com/One-Call-Clos...=1527788418&sr

    “Do not seek to follow in the footsteps of the wise; seek what they sought.” - Matsuo Basho
    {{ DiscussionBoard.errors[8679515].message }}
    • Profile picture of the author NewParadigm
      Originally Posted by Claude Whitacre View Post

      I've used it a few times, in the beginning, and it hasn't ended well. It works far better with large companies with bookkeepers that aren't the owners.

      They write check every day. The sole proprietor gets tired of writing you checks after the work is really done.

      I used to pitch a "profit share on additional business" offer, so I could switch them back to a set fee offer.
      Exactly Claude,

      the biz owner when comes to write you a check out of his account and his money has a hard time rationalizing giving you so much of his money out of his account, AFTER you have provided benefits.

      It's just human nature. It proves possession is 99% of the law

      Use your leverage when you have it.

      What you COULD do. Use the % model at first as some no risk to sign up the business. Then when the owner sees some big checks he doesn't want to write, THEN convert him to manageable monthly fees. A WIN WIN.

      Why?

      It will reduce his payout to you for the results delivered. A win for him.

      It will RAISE your monthly fee you would have quoted him in the first place. A win for you.

      It's my hybrid 2 stage method that has worked well.
      Signature

      In a moment of decision the best thing you can do is the right thing. The worst thing you can do is nothing. ~ Theodore Roosevelt

      {{ DiscussionBoard.errors[8679537].message }}
      • Profile picture of the author phil.wheatley
        Originally Posted by NewParadigm View Post

        Exactly Claude,



        What you COULD do. Use the % model at first as some no risk to sign up the business. Then when the owner sees some big checks he doesn't want to write, THEN convert him to manageable monthly fees. A WIN WIN.

        Why?

        It will reduce his payout to you for the results delivered. A win for him.

        It will RAISE your monthly fee you would have quoted him in the first place. A win for you.

        It's my hybrid 2 stage method that has worked well.
        This is a very good idea!! I would probably go with this model if possible. I guess Abraham probably just does the % thing for a short period because he makes such a killing with it, he can then afford to move onto another business without needing a monthly retainer. I suspect some deals he makes nets him 10X more money than many people make in a year!

        Cheers
        Phil
        Signature



        It's still not working for you??? Need direction?...
        ---->>>> BrainDirection.com <<<<----
        {{ DiscussionBoard.errors[8681750].message }}
  • Profile picture of the author Jack Gordon
    You are essentially creating a partnership, with all of the benefits and pitfalls thereof.

    If you trust someone enough to be willing to start a business with them, then this model can make a lot of sense... if (and only if) you can deliver the goods.

    If the trust isn't there, and/or you are shaky on your ability to provide documented results, then this is a model to avoid. It is almost guaranteed to blow up.

    As with any business, your agreements should be well documented and attorney reviewed.
    Signature
    Fifteen Lessons I have learned over 15 years and six businesses (or, My 1000th-Post Manifesto)
    {{ DiscussionBoard.errors[8679558].message }}
  • Profile picture of the author Richard Tunnah
    Hi Phil,
    I use this model for my customer re-activisation campaigns. I do charge a one off upfront retainer then 20% of all profits they make from using my marketing campaign. It has to be done on trust tbh. I get them to send me a weekly sales report linked to my campaign and payment accordingly.
    I tried not charging an upfront retainer but then many companies did nothing with my marketing campaign I'd created for them (I provide the campaign and they send it!).
    {{ DiscussionBoard.errors[8681782].message }}

Trending Topics