Would you hire a 'Paid on Performance' digital agency?

[webgeek]

If you were approached by a new digital agency that looked and sounded competent, and who offered you the chance to have them work risk free, would you be interested in a marketing agency that worked like this? [they only get paid when you receive something of value / success]

If they said you only paid when they increased traffic, enquiries, closed deals, or other criteria, what would it take for you to give them a shot?

Finally, would you be willing to pay a monthly fee or a percentage of the value they bring?

 

[AllUpHere]

The biggest concern for me would be the risk involved of them doing a bad job. I've seen a lot of people offer such services and think they are offering a service that is risk free; this is certainly not the case. If they were to completely balls up the SEO on a large site, it wouldn't matter that they wouldn't charge, it would still have cost a fortune.

The same goes for loads of different services. I've seen a lot of Marketing consultants trying to build a portfolio by being really cheap or even free. They don't seem to realise that bad advice can cost a company a fortune, so actually they are more of a risk than someone competent who charges what they are worth.

 

[webgeek]

Great point @AllUpHere. Even if the price is free, there is a risk, in just about anything in life - especially marketing and PR.

That said, if an agency has a proven track record (verifiable), risk would be minimised.

At this point, I would imagine many people would be willing to take on a marketing agency, or consultant, if the potential downside was low and the cash outlay only occurring if it proves to be a success.

 

[Gecko001]

Who would verify the increase in sales? Also someone using you might have marketing that they are doing themselves running in parallel to yours or marketing which was done before you became involved that takes several months to show results. Who would judge how much the increase in sales would be down to you and you alone?

 

[AllUpHere]

I agree it may well be a good idea, but the model is almost always used by people who seem to want to get a 'foot in the door', by promoting themselves as a low risk option. To persuade a savvy business owner to work in this way will require no less of a proven track record or verifiable credentials, than if you were to charge in a more traditional manner.

I think sometimes these types of offer can also be counter productive by arousing suspicion in the prospect. They may think if you were any good you wouldn't need to entice prospects with such an offer.

The other probelm you have is the fact that you need to make sure the client can't sabotage your good work through stupidity.

 

[Ian J]

If you were approached by a new digital agency that looked and sounded competent, and who offered you the chance to have them work risk free, would you be interested in a marketing agency that worked like this? [they only get paid when you receive something of value / success]

I would in theory but as I have only just started working with a digital agency I wouldn't in practice until I'd seen what they could do for me.

Payment would have to be on a fee basis as it would be difficult to quantify enquiries or closed deals etc

 

[Gecko001]

I think sometimes these types of offer can also be counter productive by arousing suspicion in the prospect. They may think if you were any good you wouldn't need to entice prospects with such an offer.
.

I am not in marketing but a consultant in another field. I found trying to promote myself by telling prospective clients how much my services would be good for them in very specific term was actually counter-productive. I detected a distinct suspicious tone in the responses I was getting from prospective clients and I think it actually did harm to my reputation. My competitors were getting lots of work without doing this.

I found that I had to up my game basically on every project and make sure I was up to date in my field so that I existing clients would refer me to prospective clients.

 

[webgeek]

I would have thought that if someone could come along and fine tune a PPC campaign and get you more business for less money, at least you'd split the savings with them

Actually, I work near a procurement company that gets paid when they can negotiate a savings for customers on their technical purchases. Seems to be a nobrainer really, for them.

 

[The Byre]

I have a friend who owns a company that does exactly what you describe. They look at your books, go through everything you do and then agree on a percentage of the increase in profits that they can achieve will be paid over to them.

They then rebuild everything, from website to sales models. They have experts for every aspect of running a company, from accounts to websites, from eBay shops to Amazon, from courier contracts to legal issues, they provide deep know-how and help in every aspect of running a company. And they get paid only by results.

They also provide other on-line services, such as email campaigns, hosting, SEO, website building, all for set fees.

 

[AllUpHere]

I have a friend who owns a company that does exactly what you describe. They look at your books, go through everything you do and then agree on a percentage of the increase in profits that they can achieve will be paid over to them.

They then rebuild everything, from website to sales models. They have experts for every aspect of running a company, from accounts to websites, from eBay shops to Amazon, from courier contracts to legal issues, they provide deep know-how and help in every aspect of running a company. And they get paid only by results.

They also provide other on-line services, such as email campaigns, hosting, SEO, website building, all for set fees.

The obvious question is that if they are experts in everything, why do they not just start their own companies, rather than selling their skills to others?

 

[effie9]

I think many companies do that. It is great to have a look at companies performance in the market, the size of a company and their clients.

 

[Gecko001]

sorry wrong thread!

 

[Ogdens' Nut Gone Flake]

Can you imagine the nightmare customers you'd get offering this type of service?

The obvious question is that if they are experts in everything, why do they not just start their own companies, rather than selling their skills to others?

I've tackled loads of SEOs about this and they always come up with feeble excuses such as "I like to share my expertise".

Yeah right. You're lacking the balls or the skills (or both) to do it for yourself, because if you were half competent, why would you build other people's empires?

 

[Alan]

I've tackled loads of SEOs about this and they always come up with feeble excuses such as "I like to share my expertise".

Yeah right. You're lacking the balls or the skills (or both) to do it for yourself, because if you were half competent, why would you build other people's empires?

Isn't that true of nearly every specialisation? And every employee? There are so many skills required say to running a mortgage broker or estate agency or an e-commerce business etc than SEO.

 

[The Byre]

The obvious question is that if they are experts in everything, why do they not just start their own companies, rather than selling their skills to others?

They get a percentage of the improvement from dozens of companies, ranging from car dealerships, to sat-nav systems, from flower shops to industrial sawmills. It's a very profitable business, but with a very low profile.

 

[webgeek]

The obvious question is that if they are experts in everything, why do they not just start their own companies, rather than selling their skills to others?

Why doesn't McCANN, AMV BBDO, DDB, Grey and Publicis just make companies instead of managing the biggest ad spends in the UK?

Why don't great website designers just build websites for themselves? Why don't Ferrari employees keep all the cars for themselves?

A marketing agency is a company, just like an ad company. People good at marketing often start marketing agencies. People good at advertising often start, or work in, ad agencies.

Not everyone wants to sell widgets. Some people would rather manage the marketing, or advertising, of companies that sell widgets, provide services, are third sector, etc...

 

[AllUpHere]

Why doesn't McCANN, AMV BBDO, DDB, Grey and Publicis just make companies instead of managing the biggest ad spends in the UK?

Why don't great website designers just build websites for themselves? Why don't Ferrari employees keep all the cars for themselves?

A marketing agency is a company, just like an ad company. People good at marketing often start marketing agencies. People good at advertising often start, or work in, ad agencies.

Not everyone wants to sell widgets. Some people would rather manage the marketing, or advertising, of companies that sell widgets, provide services, are third sector, etc...

You missed my point. I wasn't referring to any of the sectors you mentioned. I myself sell my marketing expertise, but no longer own my own proper businesses.

My post was in response to the byres post regarding his friend's business which has expertise in every single aspect of running a company.

 

[The Byre]

My post was in response to the byres post regarding his friend's business which has expertise in every single aspect of running a company.

No they don't! They have deep knowledge of how to take a fresh look and reform other people's companies. That is a different skill set.

 

[webgeek]

Sorry @AllUpHere - I was quoting you and half-replying to yourself and half to nutty Ogden

The point is that just because someone has great skills in marketing, advertising, or as The Byre was referring to - managing certain aspects of business improvement... it doesn't mean they want to run a business selling loo rolls or hemorrhoid cream. They could help one do better, and enjoy making an impact - but wouldn't want to sit through day after day of meetings about sore bottoms.

 

[BTON Agency]

Yes i would. I have been trying to find someone to do this for years.

As estate agents we are paid on results. In my opinion so should others.

I would happily pay for a true results driven service to be paid a very fair % of the business they can demonstrate they have landed.