Do you want to know what pricing model is right for your agency? Do your clients understand the value of the services you provide? Are you doing enough to make sure your clients stick around? Performance-based pricing can be a great model to help grow your agency, but only when clients understand the real value your agency brings to the table.

In this episode, we’ll cover:

• Is performance-based pricing right for your agency?
• How to help clients understand value compared to performance.
• Why your agency needs to set big goals.

Today I sat down for an informative chat with Justin Buckley, partner at ATTN, a performance and growth digital marketing agency. After spending years working in affiliate marketing, Justin and his partners realized they were spending too much time and money building other people’s brands. Two years ago they decided it was time to make something of their own. Justin’s here to talk about how their unique pricing model and aggressive goal setting helped grow ATTN fast.

Is Performance-Based Pricing Right for Your Agency?

One of the most important decisions you’ll make is how to charge for your services. Whether you charge on value or performance, there a few things to consider:

• What type of services do your clients expect of you?
• What type of time commitment does this mean for your team?
• How much control do you have over your client’s results?

When ATTN chose a pricing model, they chose to go with a hybrid approach. What this looks like is a combination of a flat fee and a percentage of ad spend. ATTN chose to build a performance model into their pricing structure since they are a performance agency. Ultimately, when they perform well, their clients perform well and want to spend more. The more their clients spend, the more the agency makes off the ad spend. This helps balance out the lack of control the agency has on the backend of operations as well as offset the cost of working with clients who aren’t as focused on growth.

As you grow, you’ll quickly learn what works for your agency. Don’t be afraid to charge what you’re worth and be willing to put the measure of your agency’s performance on the line.

How to Help Clients Understand Value and Performance

There’s a risk that comes with performance based pricing. If the clients don’t get the expected results based on your performance, you aren’t going to get paid what you need to. At the end of the day, it’s up to you to get your clients to see the value of your services and make sure your agency can achieve the right outcomes.

Justin says the number one thing they rely on to help their clients understand what they are getting is communication. If you don’t show your clients what you are doing and the results you’re achieving, how else are they going to know?

While it’s important to have regular meetings to review benchmarks and create goals, it’s also essential your clients know you’re invested in them. Talk to them about what they want to achieve and get a real understanding of their vision. When you know what your client wants and what they are working towards, you’ll have an easier time delivering results.

Why Your Agency Needs to Set Big Goals

If you’re not setting goals at your agency, you have nothing to work towards. Whether you’re creating an exit strategy, improving cash flow, or building your team, you need to have goals. Don’t be afraid to set goals that make you uncomfortable.

The best way to meet your goals is to break them into manageable chunks. Want to be at $10 million in profits after 10 years? Where do you have to be at year five to make this achievable? Now break it down even more. What does year three look like? Year one? Finally, figure out what each quarter, each month, and each week looks like. When you do this, not only do you have a way to hold your team accountable, but you can also start putting the right pieces into place and deploying the resources you need to hit your goals.

As an agency owner, your job is to provide a service. And with this, you continually have to prove your worth. Talk to your clients, create benchmarks, and schedule regular check-ins. When you and your client are on the same page, you’ll both find it easier to find success.

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Building Your Agency

I have advice for challenges you will face building your agency including recognizing common agency mistakes, how to keep great agency employees in your team as well as fostering the connections made with clients. If it’s challenging growing your business, I have agency growth hacks, the best ways to improve management of your business as well as why building a remote team can be beneficial in the long run.

Learn more about my experience, as well as tips, tricks, and insights by checking out my blogs that cover a wide variety of topics.

You can learn more from my experience from my Ask Swenk series and my videos on my Youtube channel. Check out the advice and learn even more from other successful agency experts featured on Smart Agency podcast twice every week.