How does a marketing consultant guarantee their services?
Hi, I would like to find out how do marketing consultants offer a guarantee to their services?
What methods do they use to both guarantee their services (so that the clients don't see it as a risk) and yet protect themselves from working for nothing?
It would be good to be detailed or if you can point me to the resources for more information. Thanks!
In my experience show a potential client previous work. They can also speak to existing clients. To protect yourself, request part of the payment up front and stage the rest according to pre-defined milestones.
Hi Roderick, Greetings from KL.
Looks like there are two schools of thought in the answers:
1. Scott's approach, where he does guarantee results by working either on a 100% pay-for-performance model or a hybrid minimum fee + % of results delivered model for those clients where it makes sense for Scott to work with them.
2. Everyone else who suggests it's not worth trying to offer a guarantee.
I agree with Scott's approach and have used similar performance billing models with clients that qualify. Of course, not every client and not every client campaign can qualify for a performance billing model but for those that do, there are significant advantages to working with them on a performance basis instead of a fee-for-services basis:
A. You can make significantly MORE MONEY.
Since you're taking on all or most of the risk, and your clients only pay if you deliver results (or maybe in some cases they also pay you a small minimum fee), you can ask for more from your clients when you do deliver results.
Note how Scott gets more than 50% revenue share of the online sales he generates for his clients. He deserves that since the client would not have generated any of these sales if it weren't for Scott's work.
B. You set yourself apart in the marketplace from most or all of your competitors.
I see you're from Singapore. In my experience working with clients in Singapore on marketing projects, I haven't run into a single marketing agency in SG who have the courage to put their balls on the table and offer a pay-per-performance model.
This really shows that you have 100% confidence in your marketing abilities. There is no better way to prove to prospects who don't know you, that you and your team are the people to work with.
Of course, you protect yourself by vetting the client and the campaigns to make sure they qualify for a performance billing model. You can also run new performance campaigns on a trial basis for a short timeframe. This protects you so you don't over-commit yourself in the worst case scenario where you don't deliver the results you initially thought you could.
C. You lock out the competition and have more FUN!
Once you enter into a performance-based billing model with a client, the entire dynamic between your agency and the client changes. Instead of being viewed as a vendor, you are now a viewed as a partner in the client's business. They now view you with a much deeper level of trust because you have skin in the game along with them.
It is now virtually impossible for a competitor to step in (unless you stop performing, of course).
And it's so much more fun to work this way.
D. 100% performance-based billing for marketing services is already proven in the marketplace
The entire affiliate marketing industry is built on people who market for free in exchange for a revenue share of results. The best affiliates earn millions of dollars a year from clients who are delighted to pay them.
I'll close by saying that not every client and not every campaign can qualify for performance-based billing but for those that do, the benefits are well worth it. If you'd like to talk more about this, feel free to ping me on Skype on jeff-webguruasia. There is more we can discuss (too much to write the details here) such as:
a. What are the criteria that make a client and a client's campaign a good or a bad candidate for performance-based billing?
b. What are the potential pitfalls of performance-based billing and how do you manage them?
c. Real-life examples of the successes and failures my agency has had, including a case study for one of the largest online food delivery services in MY and SG.
As the saying goes, there are no guarantees in life except death and taxes. Like with any regular employee, if you are not meeting the needs of the company, they will part ways with you.
Minimizing their risk comes from assuring them that you can do the job. When you market yourself to a company it really comes down to just a few things: a portfolio of work to prove past results, recommendations from past clients, and provide a few teaser ideas in the initial interview. I know when I have interviewed with a client it was more of presentation. I would show that I had done a little leg work looking into the company and I would provide a couple base ideas to show what I brought to the table.
I worked in radio for 25 years, and when it comes to selling advertising, many of the dynamics are the same. I think the bottom line is that you really can't guarantee results without opening yourself up to non-payment. Oftentimes that means the salesperson will be very concerned about results during the pitch phase, and strangely silent on that point if there's really a problem. I sat in some very uncomfortable meetings where people were telling us how their advertising wasn't working, and the cost was killing their business. I was there as the air talent, not the salesperson, so all I could really do was try to brainstorm a solution. The company wasn't going to let them out of their contract.
I think if you're honest and responsive, people will give you a chance, even if everything doesn't work out as everyone had hoped. Experienced business people could also be wary of expansive guarantees, because people selling huge results often fail to deliver. It sounds hackneyed, but I think your best guarantee is to be a decent guy and tell the truth.
Hello My Friend, that question only you can answer because you would ask yourself what brought you to the point of expecting a guarantee? I will shine some light about the real world there is no guarantee, I know where your concern comes from " if you are going to get what you pay for" , Marketing really works, but I tell people you have do your research also, and start off with a list of your goals, expectation, result and so on, then when you find a marketing company you need to communicate with them full details right upfront, because they are good at their jobs believe me they really are. Where people fail is that they never had a solid or realistic Marketing plan, or strategy in place from when they first started their business, or venture. Which is so critical and should be in place because it answer one of the main concerns for any business, Is it marketable, are there trends and how frequent, competitors, etc. and how much are you investing to make this happen the way originally planned? as I said at the beginning you have to answer that question first. First step don't expect guarantees because there is none with anything we purchase, or invest because there is so many unpredictable variables in play when adopting a market plan, one is timing, investment, patients, because it does not happen over night.
Roderick: Many of my clients are looking for increased reach/audience engagement or increased sales. I don't take on clients I don't truly believe that I can help move the needle in their business (i.e. I won't help a client who has a product that "sucks").
While I engage with most clients utilizing a cost plus model (a minimum fee plus a percentage of the value delivered), I have several clients who are extremely risk averse that I work with under a pay for performance model (i.e. a guarantee model). I do this opportunistically when it suits both the client and me (for example if they have a cause that I am passionate about).
If they are looking for reach, I charge them a fee based on the number of new unique visitors and/or pageviews I generate for them from “Bona Fide Internet Users” which I define to mean a natural person, other than a natural person who has been paid or otherwise compensated to view or click on ads or content as part of a click-fraud scheme or for other similar fraudulent or deceptive purposes, and expressly excludes robots, spiders, hitbots, scripts, software, hidden links, scraper or other mechanical, or artificial methods. We use an agreed upon measurement system such as Google Analytics and agreed upon UTM tracking strings for tracking and payment purposes.
For clients that are looking for sales, I charge them a revenue share percentage of the final order size less taxes, discounts, shipping, and a stipulated fee for credit card processing for the sales facilitated by my services (i.e. Net Sales). Because I am assuming the marketing risk and investing time upfront, I get over 50% of the value of the net sales under this type of arrangement for all sales generated during the term of my agreement and for a stipulated period after the agreement ends that I call the "Wind Down Period". I am able to recoup value during the Wind Down Period (basically a back-end payment) for the upfront services that are required. I also require the client to modify their funnel process with my input to optimize the sales flow since that is what triggers payment to me.
I hope this helps as you think through your approach to this problem.
I agree with Gee, but it would also be helpful to know how you are positioning yourself. Do you position yourself to provide a solution to a very specific marketing problem or a general one. In my experience the more specific the solution the better the results, and the social proof that comes with those results helps remove doubts from your prospects. BUT you have to be able to deliver those results to get that social proof.
For example if you say that you can provide digital marketing services that manages all of the CRM, Social Media and customer service, then it is easy to agree on what metrics are attainable. An increase in conversions, or social engagement along with service levels for the customer and each to a specific percentage.
The more specific and serious that you treat the project the more comfortable the prospect will be to sign on.
Then have a good contract that lays out expectations, payment terms and deliverables.
To most companies, marketing is a vague concept and without metrics it is not specific enough to get commitment.
Are you going to miss on some - possibly. Are you going to have clients that are not great to work with - ALWAYS if you have not screened them. Do a small project first is my recommendation and then expand it to larger - this can even be within one contract,
Payments always collect up front for small projects and in increments for larger ones. With measurable deliverables it is easy to set payment based on performance and that ensures that you have a win/win. It is also a great way to stop working with a client if they are hindering the process, or asking for project scope changes. Use these as a check point and have a great communication plan to work with each client.
These are just some of the ways that I find works with my clients and I hope they work for you also.
I'll give you the usual answer I give our clients: Just as in Life and Love, there are no guarantees in marketing.
Having said that we adopt a number of practices that, over the years, we've found have helped build client trust in our marketing proposals:
1) Screening. If we're not 100% on board with what your business is about, we won't accept you as a client. If we feel like we can't make a meaningful contribution over and above what you're already doing, we won't accept your as a client. After looking at your business plan if we feel that we'd be too much of a drain on your finances, we won't accept your as a client. We probably refuse around 5 clients a month based upon this.
2) Success Definition. We won't promise you more sales (therefore we won't work on a commission-based fee structure). We believe that any marketing services provider that makes such promises is talking out of their tushy.
What we'll promise you is more organic/paid visibility, awareness, and TRUST (via social/digital/PPC/design/SEO/content marketing/CRO/public relations...plus a bunch of other stuff). If, at the end of the day, your business/product/service sucks, that's not our problem (and the reason why we have to be on board with the value proposition - see #1).
From our side we require a confirmation of engagement fee before any work is done. We then structure incremental payments throughout the project lifecycle.
Does the above work? For us, yes it does. I've had one bad debt in 8 years of trading. More than 80% of our clients are from the USA, while I'm based in France, so I haven't even met most of my clients. Clearly what we say and do is enough to mitigate any perceived risk.
Apologies if all of the above comes across as a pitch!