When I was in O’ahu a few weeks ago, my husband and I had dinner with Dan Ferrari (known as the “Bearded Genius”, or is that Jesus?) and his girlfriend.
This dinner wasn’t some spontaneous meet-up between two veteran copywriter pals.
No, it was the result of an epic amount of restaurant research and multiple emails back and forth to find just the right spot that would suit everyone’s schedule (reservations are HARD to get in Hawaii) and palate.
The amount of analysis and discussion on this restaurant topic was practically equivalent to the deep, vast research you’d expect from two A-list copywriters tackling a brand new promo head-on.
And our research paid off. Our dinner was at a restaurant called Fete in a somewhat “artsy” (read “scruffy but becoming gentrified”) area of downtown Honolulu.
Food and drink-wise, it was the best meal we had during our 16-day stay in Hawaii.
Truly, the restaurant lived up to its name…
I “feted” Dan by treating him and his beautiful (and brilliant) girlfriend as our dinner guests, to thank him for being a guest on a few of my group mentoring calls.
And it was truly a celebration or festival when it came to the conversation, with Dan and I sharing copywriting and client “war stories”…while my husband and Dan’s girlfriend geeked out on tech stuff.
One of those “war stories” I want to share with you now. If you ever write copy for clients with potential royalties as part of the compensation (or plan to do so), you’ll want to listen up.
It’s one I shared with Dan at our meal, and he thanked me for the tip.
It’s based on a lesson one of my fellow copywriters and long-time friends learned over a dozen years ago the hard way. She had written a direct mail promotion for a major financial publisher that did gangbusters.
Her arrangement included a royalty based on the number of names mailed…and her control promo mailed into the millions. It was one of the company’s most successful financial promos ever.
She made a lot of money for her client, and also got a nice, well-earned piece of the action for herself in terms of direct mail royalties.
Then, the client started using her same exact copy as her direct mail promo and putting it online as a sales page. It went on to be a blockbuster control for at least a few more years after that as an online sales page.
Except my friend didn’t get a penny of royalties once they started using it online instead of in the mail.
That’s because her contract with them didn’t plan ahead for this contingency. It only included royalties based on the number of names mailed. To be fair, most big publishers weren’t doing that much online at the time…their primary marketing channel was direct mail.
And her client refused to pay her royalties on the online use of her promo since it wasn’t in their contract.
Which pretty much stinks, in my opinion (but the company has since gotten their comeuppance big-time…Karma’s a b***h).
Once I heard what happened, I started making sure every single contract I did with a client spelled out what the royalties would be for direct mail use AND for any kind of online use.
Didn’t matter if they swore they’d “never” do direct mail…or “never” use it online.
If I was getting 4 cents per name mailed for direct mail, I also included a 4% of sales royalty for any online use in the contract.
If I was getting 4% of sales for an online sales page or VSL, I also included a 4 cents per name mailed royalty in the contract (and as an extra kicker, an additional fee equal to 25% of the copywriting fee for the sales page or VSL to write the extra copy needed to turn it into a direct mail promo).
I still include both royalty structures in every contract with clients to this day.
And you should, too.
Especially since more direct marketers who’ve only sold product online are now starting to test the direct mail waters. And many big direct mail marketers are also using more of their promos online.
One of my current controls is one I wrote more than 4 years ago, and I’ve barely had to do anything with it since. I originally wrote it for use as a direct mail promo, and it still pays me nice royalties several times a year whenever it mails.
About 3 years ago, my client took the same sales letter copy from my direct mail control and turned it into an online sales page. It’s been kicking butt since, including on Google and Facebook, and paying me fat quarterly royalties.
On top of that, the exact same sales letter copy, word for word, has been turned into a VSL that’s also bringing in a big chunk of revenue for my client (and online royalties for me).
But if I had structured my contract when I was hired 4 years ago to write the direct mail promo to only include direct mail royalties, and hadn’t also spelled out what the royalty would be for any potential online use, I’d have been out hundreds of thousands of dollars.
The lesson here is to make sure your contracts and agreements cover your butt for all contingencies and work in your favor, not just your client’s.
That’s all I’ve got for you today. I’ve got a group call with my mentoring group later this morning…and the main topic will be all about clients and contracts.
I’ll be back at you tomorrow with more of my stories and lessons from my many recent meet-ups.
Until then, hang loose (except when it comes to those contracts! Be a tighta*s on those.)
Yours for smarter marketing,
Kim
P.S. My tan has mostly faded, but not the memory of the great meal and conversation at Fete in Honolulu. In the picture below, Dan and I are both throwing a “shaka”, which started as a surfers’ hand gesture and now has many meanings (“hang loose”, “peace”, “chill out” and other positive vibes).
Shaka, baby! Till next time…