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Idea threads

Do you think performance based pricing is a good strategy for B2B?

  • Yes

    Votes: 1 100.0%
  • No

    Votes: 0 0.0%
  • Sometimes

    Votes: 0 0.0%

  • Total voters
    1

Devampre

Bronze Contributor
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What are your thoughts on performance based pricing?

I'm reiterating my one line offer for my ads and taglines and I've come to see these types of offers look a little something like this:

I will X in Y or Z.

X = the result I will deliver
Y = the amount of time it'll take
Z= the guarantee that eliminates/minimizes their risk

What I'm currently thinking is something like:
I will double your sales in 6 months or your money back!

My only concerns are:
- Not mentioning the mechanism which delivers the results upfront.
- People taking me up on the guarantee too frequently should the results not meet the deliverable

But, I have read that not mentioning the mechanism can get more people to inquire and that 99% of people won't take you up on the guarantee unless you outright scam them or they get zero results. From my understanding, these types of offers are generally about getting your foot in the door with people and not so much about being able to get that result for absolutely everyone.

Look forward to hearing replies and the poll. :)
 
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Speed112

Bronze Contributor
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Dec 5, 2013
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Over here, over there.
What are your thoughts on performance based pricing?

I'm reiterating my one line offer for my ads and taglines and I've come to see these types of offers look a little something like this:

I will X in Y or Z.

X = the result I will deliver
Y = the amount of time it'll take
Z= the guarantee that eliminates/minimizes their risk

What I'm currently thinking is something like:
I will double your sales in 6 months or your money back!

My only concerns are:
- Not mentioning the mechanism which delivers the results upfront.
- People taking me up on the guarantee too frequently should the results not meet the deliverable

But, I have read that not mentioning the mechanism can get more people to inquire and that 99% of people won't take you up on the guarantee unless you outright scam them or they get zero results. From my understanding, these types of offers are generally about getting your foot in the door with people and not so much about being able to get that result for absolutely everyone.

Look forward to hearing replies and the poll. :)

I think it's the best way of answering "what's in it for me" which is the primary concern in people's mind before they pursue an opportunity or purchase.

The only concern is making it believable enough and providing sufficient trust and authority signals for people to take you seriously.

Some markets are quite jaded from promises that others have failed to deliver in the past, so they might perform better in some than in others, but that's not enough to warrant a "sometimes" answer for me.

A lot of my work is done on a retainer + commission basis or other performance methods. Also, it's probably the best way to get started when you don't have the track record or social proof to charge people directly. Most importantly, it introduces virtuous incentives in the relationship that pushes the person delivering the service to do their best, and for the person being serviced to rest easy and focus on their own things.

There are also platforms that use this as a business model for meeting supply and demand, in content marketing for example, and they're doing quite well on both clients and workers.

So it's definitely a good model. The question is if it's the best model to employ in your current situation, with your current prospect or marketing campaign. And the answer is... it depends.
 

Devampre

Bronze Contributor
Read Fastlane!
Read Unscripted!
Speedway Pass
Jan 6, 2016
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Canada
I think it's the best way of answering "what's in it for me" which is the primary concern in people's mind before they pursue an opportunity or purchase.

The only concern is making it believable enough and providing sufficient trust and authority signals for people to take you seriously.

Some markets are quite jaded from promises that others have failed to deliver in the past, so they might perform better in some than in others, but that's not enough to warrant a "sometimes" answer for me.

A lot of my work is done on a retainer + commission basis or other performance methods. Also, it's probably the best way to get started when you don't have the track record or social proof to charge people directly. Most importantly, it introduces virtuous incentives in the relationship that pushes the person delivering the service to do their best, and for the person being serviced to rest easy and focus on their own things.

There are also platforms that use this as a business model for meeting supply and demand, in content marketing for example, and they're doing quite well on both clients and workers.

So it's definitely a good model. The question is if it's the best model to employ in your current situation, with your current prospect or marketing campaign. And the answer is... it depends.
Thanks for the insight.

I may still try this model and see what happens. Building one or two sites for free wouldn't destroy me.

Though after talking it through, I am now thinking double your sales might sound too good to be true. I might turn the promised deliverable down a notch.
 

Speed112

Bronze Contributor
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Dec 5, 2013
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Over here, over there.
I am now thinking double your sales might sound too good to be true. I might turn the promised deliverable down a notch.

I've had a copy-editing project where the business was telling the truth, promising some ridiculous 142% RoI on a particular service (which they based on past results), and lowering that to a more reasonable promise of 56% increased conversions by somewhere around 30%. No other change, just split-testing the two numbers. It definitely matters, but you need to think from the prospect's perspective and try to match their expectations.

Your offer needs to be first and foremost plausible. If you undersell and overdeliver that's a good thing.
 
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Devampre

Bronze Contributor
Read Fastlane!
Read Unscripted!
Speedway Pass
Jan 6, 2016
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284
27
Canada
I'm now thinking of the line:

I'll double your conversions in 6 months or your money back!

I feel conversions is much more tangible than profits. Because profits is dependent on the client's business and I cannot really make that guarantee if they have something like fulfillment issues.
 

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