Question

Folks who work on performance pay only models for Ecom — what’s your fee structure?  

Answer 1

I charge per ROAS, ex: 3 ROAS = 500$ 3-5 = 1k$ etc.  

Comments

@attar226 question based on that model - what’s the incentive for you to want to scale spend for a client in this case? As an example, let’s say you spend $100/day for a client and achieve a 3 ROAS. Your client wants to scale up to $200/day given the results, but naturally your ROAS will tighten up (let’s just say to a 2. 5 in this case) so you would actually make less money even though the client was able to double their spend from your efforts. Is there also a tie in with the amount they are spending?  

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@attar226 you should replace the fee with percentages

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Going full performance based potentially puts you in tight spots without it being your fault. Competitors doing discounts while your client doesnt want to follow, stock problems etc. I always opt for a base fee + %Roas

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@lindquist what would be a %ROAS range that you're comfortable with.  

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Total ROAS goes down while scaling but individual ROAS for retargeting campaigns can be redicously high. I am assuming @attar226 is not referring to total ROAS?  

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@attar226 its always a bit client dependant! Wether its a high ticket product, cogs etc. My latest client came on for €2000+4%rev-adspend

Answer 2

650$ testing period, then % of a month spend

Comments

Slava. why could you opt for a % of month spend and not %ROAS? And what % range works for you?  

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@manhunt 20-5% depends on spend

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@manhunt i can give u roas up to 15x.  

Answer 3

For smaller clients that don't want to pay retainers, I charge 20% of directly attributable revenue. Then it steps up to a monthly retainer and percentage of media spend when they're ready to make that step. Charging a percentage of revenue is really just a strategy to show them the benefit of the retainer.  

Comments

@tyrrell that’s a good way to put it.  

Answer 4

I’ve always just gone for a retainer as it usually works best in the long run. Pay for performance is a great motivator though - it’s just that when you do great work and everything is going right the client might feel that they are overpaying and it creates and incentive to resource internally. Once we get to above $10k a month payments we find that clients often start looking for ‘cheaper’ ways to resource it.  

Comments

Then base salary plus %ROAS with a 10K monthly cap. it's a win for them when you're motivated