How Pay Per Lead Dominates Traditional Agency Model

Most agency owners, or glorified FB ad managers or funnel designers, think that by taking on any gig you can get, that is the right way to run your business. Well, here is a secret that most courses and coaches who have the ‘agency in a box’ blueprint usually don’t teach you… It is better to find the RIGHT clients that you can easily plug into existing marketing efforts, than any client you can get. And that is where the PPL or what I like to call the ‘pay per performance’ model dominates traditional retainer agencies all day long. 

First off, it is easy to get clients. There is no real selling on being the best FB ads manager, or having the best funnels you can build for a client. Because it is all about a tangible KPI. It streamlines the conversation towards a client’s ROI.. You simply let them know you can get them warm, in-market referrals, consistently, that will make them money. Because Leads are pretty much every business’s lifeline… and every business owner knows that a good source of leads is gold. And that hunt for a good source of leads is honestly a challenge for most companies.

So not only do the clients onboard easier and faster, but you have the ability to charge much more than a 20% retainer fee when you sell leads. A client will know what a premium lead costs. Let’s say $50 is what you can charge and they have a $5k monthly budget. That’s 100 leads a month, or 25 leads a week, or just 4 leads a day. Seems pretty doable right? Well what happens when you dial in your cost per lead at $25? That means your gross profit is $2500 bucks. Plus, your client knows they had 100 swings at sales in just 30 days. If you had a $5k client in which you just managed their ad spend, your gross profit is only $1000 and you are hoping and praying each month that the client doesn’t cancel. Why? Because there is no tangible KPI attributed to your efforts, like the pay per lead model offer.

So lastly, when you provide high quality leads to clients, and they make money off your efforts, your recurring revenue is not only automated, but it is going to be very difficult for your clients to turn you off, and that means sticky retention and incremental grown month after month.  

So it is not hard to see that transitioning your retainer agency to a PPL model is the pivot you need to scale fast..