Whenever I’m coaching a brand new scholar to begin a house enterprise as a advertising and marketing
marketing consultant they usually begin asking me about organising “contingency fees” (i.e. getting paid on the proportion of gross sales versus a charge) I all the time must spend an hour attempting to speak them out of desirous to do it.
At least at first.
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
utterly outdoors your management. And whereas all the things could look nice “on paper”,
you may end up placing lots 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 likelihood the stuff you like will
not hold working the way in which you need them to work.
And in addition to that, doing a contingency deal adjustments the entire relationship between
you and the shopper.
Especially when huge cash is concerned.
Things could go fantastic when earnings are modest. But when huge and sudden success
occurs (often because of you, the marketing consultant) purchasers who was rational
and trustworthy can all of the sudden begin appearing humorous, attempting to justify doing stuff you
did not agree on (particularly on the subject of paying you.)
Now do not get me mistaken right here.
I’m not saying it is best to steer completely clear of those contingency offers, as they will
rapidly make you some huge cash you would not have seen in any other case. In truth,
typically only a small “tweak” to an organization’s advertising and marketing and gross sales can yield large
windfalls of earnings. And in case you have a contingency deal, you’ll get a pleasant style of
But I might by no means suggest somebody simply beginning out stepping into on a pure
contingency foundation. You’re significantly better off charging a flat charge first, after which, as you
work with the shopper they usually work with you, you possibly can each discover out if you are going to
work effectively collectively.
In different phrases, let the deal evolve right into a contingency deal. You’ll be significantly better off
and keep away from a number of the nasty pitfalls I see so many consultants — advertising and marketing and
in any other case — fall into.