Performance-based digital marketing pricing
We, at Allez Digital, strive to be a trusted partner and build a long-term relationship with our clients by making their goals our objective. With a performance-based pricing model, our cost is primarily based on the results of the work we deliver to our client. This allows our client and our agency to share the risk since the client will only pay us for outcomes. As a result, both parties can yield a better ROI from the value our expertise and work brings.
Performance-based pricing examples:
- Our client is a cosmetic dental practice that estimates the average customer lifetime value (CLTV), the total revenue a company receives from their entire relationship with a customer, of a new patient to be $3420 (2 appointments each year * $285 an appointment * 6 years as a customer). We agreed that our agency’s cost would be 10% of the CLTV. If our efforts brought in 10 new patients in a month, we then delivered $34,200 in value to our client and our agency received $3420 (a 10x ROI to our client) for our work.
- Our client is a SaaS company that has an average customer acquisition cost (CAC), the cost a company pays to get a customer to buy their product, of $260 and CLTV of $1650. We agreed that our agency’s cost would be the same as the CAC. If our efforts brought in 40 new customers in a month, we then delivered $66,000 in value to our client and our agency received $10,400 (a 6x ROI to our client) for our work.
We do understand that certain services we offer, and your company’s needs and budget may fit better with an hourly cost model or a retainer model, which we can accommodate as well. One of the main requirements that we do need from any potential client is a willingness to share business metrics and data in order to work as partners and succeed. To do this we start each discovery meeting focusing on establishing these answers:
- What are your business goals and metrics (CLTV, CAC, conversion rate, avg. order cost, etc.)?
- What audience do you want to target?
- What challenges are you facing?
- What strategy are you using and the results from it?
- What objectives do you have and which metrics will measure them?
- What is the timing you have to achieve your goals?
From there we can begin aligning our expected outcomes to your goals in order to come up with a pricing model and payment structure that is appropriate to begin our relationship.