What It Means
In performance-based marketing, some or all of what you pay depends on results. The idea is simple: if the agency only does well when you do, you both want the same thing. A flat retainer gets paid whether your phone rings or not.
I've run ads for over 12 years. Across our clients we've generated more than $3.35M in revenue, worked with over 500 businesses, and had a single funnel bring in $186K. Most of the arguments I've seen between business owners and agencies started with a pricing model that rewarded the agency for something other than sales.
The Common Models
- Pay per lead: you pay a set price for each lead. Simple, but it rewards volume, and junk leads cost the same as good ones.
- Pay per appointment: you pay for booked calls. Better, but watch for no-shows and unqualified bookings.
- Revenue share: a percentage of new revenue the marketing brings in, often with a smaller monthly base. This one ties most closely to what you care about.
- Hybrid: a monthly fee for the setup and tools, plus a percentage only on new revenue. This is how we price at KenjiAI, because the base covers real work and the percentage keeps us focused on sales.
Five Questions to Ask Before You Sign
- What exactly counts as a result, and who decides?
- How is it tracked? Your CRM and payments, or the ad platform's numbers?
- Do I own the ad account, the pixel and the leads if we stop working together?
- What happens to my ad spend if results don't show up in the first 30 to 60 days?
- Who follows up with the leads, and how fast?
Where These Deals Go Wrong
Most performance deals fail on tracking. If nobody agreed on how a sale gets attributed, you'll argue about every invoice. Put it in writing: the lead source tag in the CRM, the date range, and which sales count as new.
The other failure is follow-up. An agency can deliver great leads and still look bad if nobody calls them back. That's why we set up the CRM follow-up and AI agents before we launch ads. See the five automations we turn on first.
Is It Right for You?
Performance pricing works best when you already have an offer that sells and a way to track sales. If you're still setting up, start with the basics first. The growth quiz tells you which side of that line you're on in about two minutes. You can also hear how we work with clients on the KenjiAI Podcast.
See how our performance-based plans work at kenjiai.com/pricing.