Our Elevator Story

Our Proposal: The Pay-for-Performance Model

Just as we believe the traditional marketing model is broken, we also believe the traditional bill-by-the-hour model is broken too.

If you think about it, the bill-by-the-hour model is illogical and requires the estimator to predict the future. Can an agency really know ahead of time how long a project is going to take without resorting to wild-ass guesses? No. It also assumes that all hours have the same value. They don’t. Some hours produce big ideas. Some hours produce zilch.

We believe in the pay-for-performance model, sometimes called a contingency contract.

Here’s a simple example of how it works:  We estimate a Microsite campaign will cost $100,000 and bring in 10,000 new customers this year. A single customer is worth $50 in net profit (or $500,000 total from 10,000 new customers). Thus, the Microsite campaign will add $400,000 to the client’s bottom line ($500,000 net profit minus $100,000 in marketing expenses). Not a bad return on investment. If the campaign achieves only 70% of its objective, the client pays only 70% of the total.

In this example, our client and we, the agency, both win. It mitigates our client’s risk and provides a degree of measurement and accountability, while rewarding us for smart thinking, not churning through hours.

The objectives and metrics can vary, but you get the idea.

Check out our Microsite Campaign Case Studies