The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

Is anyone doing a pay-for-performance model?

Remove ads while supporting the Unscripted philosophy...become an INSIDER.

JustKris

Writing and talking, basically.
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Oct 16, 2012
169
370
196
In the mountains
Has anyone in the forum ever done pay-per-lead or pay-per-performance consulting before? (I mean, obviously besides MJ with limos.com, of course)

Had a client bring this up recently and was curious what people in TFF thought about it.

The TL;DR version---They sell a high-ticket platform. Right now, I'm charging a monthly retainer for consulting. But they suggested they would be open to looking at a lead-gen or percentage of sales model.

I did this in the past when I was a Slowlane employee. Basically, I pitched the owners on a comp plan that was a base salary and a % of new revenue. But I'm wondering if this is going to be more trouble than it's worth when dealing with somebody in another state.

The pros as I see it

- Potentially very lucrative
- The upside of an ownership stake without the headaches
- Longer-term revenue on current work (i.e. a payout on 12 months of service based on work I did this month.)

The cons

- Keeping track of leads/sales
- Disputes over what constitutes a proper lead/sale. "Oh, we spoke to that guy once five years ago. That doesn't count."
- It can become TOO lucrative and they want to cancel the deal.
- Depends on the closing rates of their team, not my own abilities.
- Costly litigation if there is a dispute
 

Don't like ads? Remove them while supporting the forum. Subscribe.

RazorCut

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 3, 2014
2,027
7,091
1,736
Marbella, Spain
I think it’s a win win for both parties. The client knows they are paying on results and you have a vested interest to ensure you make the most of any sales opportunities plus no cap on revenue.

A lot like affiliate marketing.
 

JustKris

Writing and talking, basically.
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Oct 16, 2012
169
370
196
In the mountains
I do that, yeah. Wouldn't ever change. The alternative, as I see it, lacks confidence in your own results (Or due diligence), or is short sighted

How do you structure your fee? Per lead, per sale?




Sent from my iPhone using Tapatalk
 

Bourbons

Bronze Contributor
Speedway Pass
Mar 28, 2016
75
167
142
32
Newcastle, UK
How do you structure your fee? Per lead, per sale?




Sent from my iPhone using Tapatalk
Almost always start out just aiming to cover costs with a very modest profit, then we'll work to ascertain the value of the client to our partner and work to get a bigger share. Most people struggle to create a good sales funnel, whilst they may be good at their chosen profession, so we have a high value to our partners.
 

Andy Black

Making a nuisance of himself on Twitter
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
May 20, 2014
11,907
47,537
4,306
Ireland
I do flat fee. It’s intentional.
 

PizzaOnTheRoof

Moving Forward
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Jul 30, 2018
1,195
2,583
666
Texas
I plan on building multiple lead gen “properties” using a pay per lead or flat rate model. Right now leaning towards PPL.

Not looking forward to tracking and playing accountant for all the leads but the model does have a higher growth potential than flat rate.

Maybe a hybrid of the two? Low cost per lead + subscription fee?
 

Tom.V

Tom
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
Speedway Pass
Feb 20, 2012
976
2,271
571
31
San Juan
Typically, nah.

However, if a prospect comes around that I KNOW we can blow out of the water given their market, business setup, competitive advantage, then different story. Even then, the model is akin to the story of Icarus. When you do gain traction and really start digging into it, you can quickly become the largest expense on their books which puts a big fat red target on your back. There are ways to mitigate this risk, but significant thought needs to be put into the deal structure ahead of time to make it work best for both parties long-term. At that point, might as well get equity in the company with a capped fee.
 

Sponsored Offers

Introducing MJ's Personal Unscripted Network, Join Now for FREE!
If you are in IDEA mode, text "IDEA" to the above number. If you are in LAUNCH/START mode, text...
MARKETPLACE 7 Days To Freedom: From Wantrepreneur/Wage Slave To Freelancer
7 Days To Freedom: How To Go From Wantrepreneur To Income Producing Freelancer In Just 7 Days...
  • Sticky
MARKETPLACE Lex DeVille's - Advanced Freelance Udemy Courses!
I have a long weekend off work.. bought your "Start a Freelance Business: Take Back Your...
  • Sticky
MARKETPLACE Fox Web School "Legend" Group Coaching Program 2021
Adding in my 2 cents for anyone considering joining. Let me save you the deliberation - join...
MARKETPLACE Not sure how to start? This free book will teach you how to build a successful web design business
If there’s one thread I see repeated over and over again on the forum, it goes like this: “I...
  • Sticky
MARKETPLACE You Are One Call Away From Living Your Dream Life - LightHouse’s Accountability Program ⚡
Thanks for clearing that up. What do you recommend for those who are still in the process of...
  • Sticky
MARKETPLACE Kill Bigger Incubator
I have not offered one of these in a while, but it looks like I have time to take on an...



Forum Sponsor

Over 100 Fastlane Students
More Details...

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom