Why aren’t we working by the per-success model?
Every now and then, we get an inquiry from a potential client interested in our services and ask for an offer. After we get the feedback from the client and after the offer is sent, everything looks great at first, but…the client asks about the option of not paying the price given in the offer but rather paying us based on the number of products/services he sold.
Just to be clear, we are absolutely supporting the fact that the hiring of a digital marketing agency should bring a certain benefit to the customer. The agency, with all its knowledge, experience, and work on the project does everything in its power in order to accomplish the goals of an individual project, BUT the agency can’t be held responsible for the final results of the project, especially if those results are of sales nature.
Let us picture a very similar situation:
A businessman is opening a new hotel. He is searching for an architecture company that is going to build his hotel. He finds a suitable company and then he says to them: “Your blueprints are great and all but instead of paying you its full price now, I was thinking of paying you with 20% of total profit I earn in the first year of my hotel’s business activity.”
We can all easily assume that the architecture company from this hypothetical situation will turn down the “offer” because of the simple reason of not being responsible for the whole business activity of the hotel. They will use their knowledge and experience the best they can in order to propose the best solution for the hotel, but they can’t be held accountable for other aspects of the hotel’s business activity such as overpricing, bad service or insufficient marketing which will all probably result in the lack of guests in the end.
Why is something like that being asked of digital agencies? Our job is to do the best digital marketing possible and to do everything that can be done so that the targeted audience can find out about the product/service we are promoting. But we can’t be responsible for the remainder of the business activity and for the possibility of bad service. (Community Management Tips & Tricks Webinar)
What, however, can be done?
The KPIs of the campaign can be set up. Through them, after some time, the work of the agency can be evaluated, but still, those KPIs have to be solely digital. The examples of possible KPIs:
- Facebook fans increase by 30%
- Organic websites visits by 50%
- Newsletter subscribers reach 10.000
Accepting these kinds of KPIs is not a problem for us because, here, we can have a strong influence on all of the given elements.
After a certain period of cooperation (1-12 months…) we sit down with the client and we do a complete evaluation of our cooperation by then. If the client is satisfied with our work, we continue to work together. If he is not satisfied we are discussing what wasn’t done well and are trying to see if it can be fixed in the following period. If the client believes that we are not good enough and if he thinks that another agency will do a much better job…OK, we don’t have a problem with that. That is all a part of the business.
What can be done by the client?
If they find an agency which they agreed on a per-success model with, great for them. On the other hand, if they don’t succeed, we have a couple of advice:
- Find 3-4 agencies and ask for the offer, but be sure to describe your product/service, targeted market and approximate budget in detail
- Look up their references
- Look up their case studies
- See which agency is the best fit for you
- Make a decision about the agency you are going to work with, set your goals and start cooperating
- After some time, sit down with the agency and evaluate your results
What are we doing in these cases?
When we get an inquiry about working by a per-success model, the response we sent to our potential client is somewhat similar to a shortened version of this text (that is the reason we wrote it in the first place :)). We can’t accept such a way of doing business. We can understand that there’s a lot of companies that can’t afford the service of an agency and that’s all right, but the wrong thing to do here is expecting the agency to suffer the consequences of their business activity. And if they are afraid to pay the agency upfront, because they aren’t sure in the service quality of the agency, then it’s best not to start working with one at all because the relationship client-agency has to be full of trust. That might mean that we are going to have fewer clients, but then again, that’s the risk of our business.
What do you think about this topic? Agencies, are you often asked to work by the per-success model?
