The Broken Agency Model
Traditional ecommerce agencies charge retainers. You pay them every month whether they deliver results or not. They get paid for effort, not outcomes.
This misalignment creates perverse incentives:
- Agencies focus on billable hours, not revenue growth
- They prioritize vanity metrics over meaningful KPIs
- Clients bear all the risk while agencies guarantee nothing
- Long-term contracts lock clients into underperforming relationships
We decided this had to change.
The Performance-Based Revolution
Our Philosophy: We Only Win When You Win
Performance-based pricing means our success is directly tied to yours. Instead of fixed retainers, we structure fees around your actual business results:
- Revenue Share: Percentage of incremental sales we generate
- KPI-Based Milestones: Payments when specific targets are hit
- Hybrid Models: Small base fee plus performance bonuses
- Risk Sharing: We invest in your success, not just time
How It Actually Works
Step 1: Baseline Establishment
We start by understanding your current performance:
- Analyze historical sales and traffic data
- Identify your current conversion funnels
- Assess existing marketing channels effectiveness
- Set realistic but ambitious growth targets
Step 2: Strategy Development
We create comprehensive growth plans focused on measurable outcomes:
- Conversion rate optimization roadmap
- Traffic acquisition strategies
- Customer lifetime value improvement
- Cart abandonment reduction initiatives
Step 3: Implementation and Tracking
We execute with complete transparency:
- Real-time dashboard showing all KPIs
- Weekly performance reviews and adjustments
- A/B testing with statistical significance
- Attribution tracking across all touchpoints
Step 4: Results-Based Compensation
You only pay when we deliver:
- Revenue growth above established baseline
- Conversion rate improvements
- Customer acquisition cost reductions
- Specific KPI milestone achievements
Real Performance-Based Results
Case Study: Sustainable Fashion Brand
The Challenge
- Stuck at $50K monthly revenue for 6 months
- Previous agency charged $8K monthly retainer with no results
- Conversion rate stagnating at 1.2%
- High customer acquisition costs eating margins
Our Performance-Based Approach
- Zero upfront fees, 15% of revenue growth above baseline
- Focus on conversion rate optimization and email marketing
- Complete funnel audit and optimization
- Weekly strategy calls and rapid iteration
The Results
- 340% Revenue Growth: From $50K to $220K monthly within 6 months
- Conversion Rate Doubled: From 1.2% to 2.8%
- AOV Increased 45%: Average order value from $75 to $109
- Client Cost: Only paid $25,500 vs $48K traditional agency would have charged
Case Study: Electronics Accessories Store
The Challenge
- Declining traffic and conversion rates
- Google Ads becoming too expensive
- No clear attribution of marketing ROI
- Competing against Amazon on price
Our Performance-Based Approach
- Hybrid model: $2K base + 10% of incremental revenue
- Focus on SEO and content marketing
- Product differentiation and value proposition work
- Email and SMS marketing automation
The Results
- Revenue Up 180%: From $30K to $84K monthly
- Organic Traffic +250%: Reduced ad dependency
- Conversion Rate +85%: From 1.1% to 2.0%
- Client ROI: 400% return on total investment
Why Performance-Based Works Better
Aligned Incentives
- We Care About Your Revenue: Not just billable hours
- Risk Sharing: We succeed or fail together
- Long-Term Thinking: Sustainable growth vs quick wins
- Transparency: You see exactly what we’re delivering
Focus on What Matters
Traditional agencies optimize for:
- Reporting metrics that look good
- Activities that can be billed
- Impressions and reach numbers
- Complex dashboards and jargon
We optimize for:
- Actual revenue growth
- Profit margin improvement
- Customer lifetime value
- Sustainable competitive advantage
Performance Metrics That Matter
Primary KPIs
- Revenue Growth: Total sales increase month-over-month
- Conversion Rate: Percentage of visitors who purchase
- Average Order Value: Average revenue per transaction
- Customer Acquisition Cost: Cost to acquire new customer
Secondary KPIs
- Customer Lifetime Value: Total revenue per customer
- Cart Abandonment Rate: Percentage of abandoned carts
- Repeat Purchase Rate: Percentage of returning customers
- Traffic Quality: Conversion rate by traffic source
Common Questions About Performance-Based Pricing
”How do you know if you caused the growth?”
We use sophisticated attribution modeling:
- Multi-touch attribution across all customer journeys
- Control groups for A/B testing our initiatives
- Incrementality testing to isolate our impact
- Statistical significance analysis for all claims
”What if external factors affect sales?”
We account for external variables:
- Seasonality adjustments based on historical data
- Market trend analysis and competitor actions
- Economic factor consideration
- Flexible terms for extraordinary circumstances
”Don’t you need guaranteed income?”
Performance-based agencies succeed through:
- Portfolio of successful clients generating revenue
- Higher per-client revenue than traditional agencies
- Long-term client relationships based on trust
- Referral business from happy clients
Is Performance-Based Right for You?
Ideal Candidates
- Established stores with consistent baseline revenue ($10K+ monthly)
- Businesses focused on growth and scalability
- Companies comfortable with transparency and data sharing
- Owners willing to partner and collaborate on strategy
When Traditional Models Work Better
- Brand new stores without established baselines
- Businesses needing fixed budget certainty
- Companies wanting pure consultation without implementation
- Situations requiring extensive upfront development
Getting Started with Performance-Based Partnership
Discovery Phase (2 Weeks)
- Complete business and technical audit
- Baseline establishment and KPI agreement
- Growth strategy development
- Performance contract finalization
Implementation Phase (Ongoing)
- Strategy execution and optimization
- Weekly performance reviews
- Monthly strategy adjustments
- Quarterly business reviews
Optimization Phase (Continuous)
- Continuous improvement initiatives
- New channel testing and expansion
- Advanced automation implementation
- Scale and growth planning
The Future of Agency Relationships
Industry Trends
- Shift from retainers to outcome-based models
- Increased focus on ROI and accountability
- Technology-driven performance tracking
- Long-term partnership thinking
Our Commitment
- Complete transparency in all dealings
- Shared risk and shared rewards
- Focus on sustainable business growth
- Partnership mentality vs vendor relationship
Conclusion
Performance-based pricing represents the future of agency-client relationships. It aligns incentives, ensures accountability, and focuses everyone on what actually matters: growing your business.
Traditional agencies get paid whether they succeed or fail. We only succeed when you do.
Ready for a partnership where we only win when you win? Let’s discuss how performance-based pricing can transform your growth trajectory.