Why Share the Risk?
Problem: Marketing spending is chronically underfunded
Identifying competent strategic marketing talent is difficult — even for marketing people. Further complicating tings, it takes time for many marketing projects to reach their full impact.
A good example is Web marketing. Payment is typically made upon delivery, not when the results are known, which is typically much later. This makes the investment seem riskier. Increased perception of risk drives investment down.
For smaller firms, when marketing is executed correctly, the biggest outlay within the Marketing budget is professional marketing services. This makes investing in marketing not only risky but “lumpy” — too much akin to all-or-nothing.
For good reasons, marketing often suffers from underinvestment.
This impacts my ability to make a clear and lasting impact.
Solution: My share-the-risk model
I have found success with compensation based on a percentage of revenue or gross margin. My client only pays for ongoing marketing infrastructure, like MailChimp.
All I need is a contract with a term that's long enough — at least two years — for me to recoup gains from marketing improvements.