What is a performance-based contract?

What is a performance-based contract?

Put simply. If you win, we win. And if we don’t hit pre-agreed expectations, we’ll reduce our fee.

What’s the longer version?

The traditional model of external marketing and sales partners is broken. The problem is that most agencies and consultancies are incentivised (in my opinion) on the wrong thing.

Over 93% of agencies price on either a fixed fee or an hourly basis. That means, regardless of outcome, they get paid. But aren’t they supposed to drive growth? What happens if they don’t?

Less than 7% charge on a performance-based model and most of those are paid agencies only. We’re bucking that trend and going all in on a risk and reward model.

Our approach is to reduce your exposure and share in your success. How do we do that?

  • We’ll agree on some KPIs near to, or at the start of any engagement.
  • If we hit that KPI you'll pay us a kicker
  • If we miss the KPI we’ll reduce our fee

We won't put the entire fee at risk but we'll put a proportion on the block equivalent to the potential bonus that we get paid.

The idea of all of this is to incentivise us on the right behaviours.

There’s going to be some back and forth.
There’s going to be some challenges to this model.

But I believe it’s the right approach for all marketing agencies and consultancies who are charged with driving business growth from their activity.

Isn’t this risky for you?

Yes. And I don’t think I’d have done this model 5 or 10 years ago.

But having over a decade of experience in the space means I can hopefully, ensure that I don’t work with those companies who:

  • Don’t have product market fit

  • Aren’t a good match for our services

  • See marketing as a last resort to save their business

  • Have gone through umpteen external partners in the last 24 months

Sounds interesting - what are you calling it?

We're calling this “skin in the game growth consultancy”, so if you'd like to see if we’re a good fit for your business, please get in touch.


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