Why Performance-Based Pricing Can Hurt You, The Client
Performance-based pricing for marketing services may sound like the safest deal for a business owner feeling tight on cash.
but Here’s why performance-based marketing can be one of the riskiest decisions you make as a business owner, and why it can hurt you over the long-run:
I recently spoke with a prospect who had been burned by a marketing agency in the past.
He hired a marketing agency to get him leads.
They got him leads.
They fulfilled on his performance metric.
✅ Check. Bingo. Performance-based marketing, done.
But those leads were not good leads.
They were random, not targeted, and did not end up booking sales calls with the business owner.
The business owner, instead of chalking that up to his own lack of marketing skills, chalked it up to the marketing agency not having a dog in the fight.
It’s like getting bitten by a snake and then blaming the forest for not keeping the snakes out rather than owning your decision to walk through the forest barefoot. 🐍
What I would recommend to that prospect is to learn why he fell for that marketing agency’s hollow promise in the first place.
If he improved his marketing acumen, he would understand why not all leads are created equal.
Alex Hormozi talks about learning the wrong lesson in business.
Mistakes happen all the time in business, but the lesson you learn in business in entirely up to you.
Alex Hormozi talks about how some entrepreneurs learn the right lesson, but how many learn the wrong lesson.
The lesson you learn from a mistake depends on something called your locus of control.
There are 2 places your locus of control can be:
External or internal.
An external locus of control blames others for your results and circumstances in your life. This is what it’s like to attribute your business and marketing performance to a marketing agency, and to hire one for that reason.
An internal locus of control looks inward.
With business, an internal locus of control asks why you hired a marketing agency in the first place, and if you are projecting saviorism onto a marketing agency.
Do you take responsibility for what happens when inbound leads land in your email list?
When you get your Amazon ads reports back, do you gloss over them or start to ask questions about what the numbers could mean?
What story are the numbers telling you? Which numbers?
How often does your agency roll out their reports (and why?), and which KPIs do they track and for what reason?
What KPIs are important to you and why, and does your marketing agency align with your reasoning?
Does the marketing agency have expectations of the type of clients they take on?
For example:
How much sales and marketing acumen do you have? What expectations do you have of your sales team? Do you use closers in your sales process? Why or why not?
Do you tweak your offer endlessly, or do you instead focus on communicating the value of your offer?
If not, are you hoping the marketing agency will do that for you? Why?
Do you only look for agencies that will do performance deals with you, because you don’t trust anyone?
(If the universe is a mirror, why would a good marketing agency have any reason to trust you, then?)
Most business owners learn that there is no such thing as an external locus of control.
The strongest business owners know that the only thing that they can control in their life is themselves.
Do not ever hope Smokin’ Hot Books® will come and save your business.
The performance of your business relies on 1 thing: you.
Your skills.
Your inner work.
Jim Rohn, one of Tony Robbins’ favorite coaches, says it pays more to work harder on yourself than your job.
An entrepreneur seeking performance-based deals from marketing agencies so that they can avoid the inner work of becoming a great entrepreneur is hurting themselves over the long-run.
It’s like learning how to do your math homework with a calculator.
Sure, you turn in that math homework on-time, and you get a 100.
But that math test is coming, baby.
And in the world of entrepreneurship, nobody can take your test for you. 💪
Successful entrepreneurs upgrade their beliefs.
They learn, unlearn, and upgrade their mindsets about marketing, sales, hiring, operations, spirituality, and more.
At Smokin’ Hot Books®, we do a lot.
But nothing can compensate for a founder or business owner who has never learned the principles of copywriting.
If you are looking to learn the basics of why humans buy, buyer psychology, persuasion, and influence, Viral Author Academy is our flagship program to learn these basics.
Learning these basics will give you back control over your business, so that when you go to take your test in entrepreneurship, you get an A.
If you aspire to become a 1:1 VIP client, we will assess your marketing acumen to see if you are good fit before working together.
A great fit means your book can succeed, it feeds your right funnel, and promotes your right offers.
To you and your business’s success. 🎉
Renee