It's entirely understandable for a client to ask for payments based on results, but we don't believe it works, and here's the reason why
Performance-based pricing is where we charge a client based on the achieved results––generally based on sales made. The flaw with this model when working with a marketing agency is that often results are long-lasting.
For example, if we put in place a conversion funnel on your website that generates leads and converts at a rate of 25%, you'll continue to get leads as long as traffic flows through it.
This potentially means that on a performance-based model, you'll be paying us for the same piece of work for as long as the funnel is live.
The amount of traffic that goes through the funnel may depend on your ad budget and, therefore, fluctuate.
Then, sales are dependant upon your internal sales processes and the ability of your salespeople. It's outside the control of the agency, and therefore it's difficult to base their remuneration upon your sales.
We believe in making things simple. Between us, during your strategy sessions, we agree on the work that needs to be done to achieve your goals, and we're paid for delivering that work.