Whenever I’m coaching a brand new pupil to begin a house enterprise as a advertising
marketing consultant and so they begin asking me about organising “contingency fees” (i.e. getting paid on the share of gross sales versus a price) I all the time must spend an hour attempting to speak them out of desirous to do it.
At least at first.
Why?
There are a number of causes:
One is you are in a “partnership” with the enterprise proprietor. You’re now counting on his
honesty and his belief and his functionality of doing enterprise, all of that are
fully exterior your management. And whereas every little thing might look nice “on paper”,
you can end up placing a number of your time and power right into a enterprise and never
receives a commission a penny in your efforts.
Plus, even when issues go good at first, there is a good probability the stuff you like will
not preserve working the way in which you need them to work.
And in addition to that, doing a contingency deal modifications the entire relationship between
you and the shopper.
Especially when huge cash is concerned.
Things might go nice when income are modest. But when huge and sudden success
occurs (normally on account of you, the marketing consultant) purchasers who was once rational
and trustworthy can all of the sudden begin performing humorous, attempting to justify doing stuff you
did not agree on (particularly in the case of paying you.)
Now do not get me improper right here.
I’m not saying it is best to steer completely clear of those contingency offers, as they will
shortly make you some huge cash you would not have seen in any other case. In reality,
generally only a small “tweak” to an organization’s advertising and gross sales can yield big
windfalls of income. And if in case you have a contingency deal, you’ll get a pleasant style of
these income.
But I might by no means suggest somebody simply beginning out getting into on a pure
contingency foundation. You’re significantly better off charging a flat price first, after which, as you
work with the shopper and so they work with you, you may each discover out if you are going to
work nicely collectively.
In different phrases, let the deal evolve right into a contingency deal. You’ll be significantly better off
and keep away from a few of the nasty pitfalls I see so many consultants — advertising and
in any other case — fall into.
