How to Price, Deliver & Sell Performance-Based Retainers, With Chris Rudolph
Apr 17, 2024
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Guest Chris Rudolph shares insights on adapting agency pricing with performance-based retainers, navigating industry changes, setting performance fees, conducting client audits, and balancing client satisfaction with agency profitability.
Performance-based retainers offer agencies opportunities to align payments with results, adapting to market disruptions.
Balancing risk and reward is crucial in hybrid retainer models, requiring a diversified client portfolio.
Deep dives
Diving into Agency Operations with Industry Leaders
Digital and creative agency owners are invited to explore performance-based retainers in this podcast episode. Hosted by Marcel Pettepofop and featuring industry veteran Chris Rudolph, the discussion delves into optimizing agency growth, enhancing profitability, and creating operational efficiencies.
Adapting Pricing Models to Market Disruptions
The episode highlights the importance of adapting pricing models in response to market disruptions such as financial uncertainties. Performance-based retainers are proposed as a strategic option for agencies facing client cancellations or financial hesitations, offering a solution that aligns payments with tangible results.
Balancing Risk and Upside with Performance-Based Retainers
Chris Rudolph shares insights on balancing risk and upside when implementing performance-based retainers, emphasizing the need for a diversified client portfolio. The conversation addresses the dynamics of transitioning clients from flat fee retainers to performance-based models, managing expectations, and setting realistic client acquisition goals.
Optimizing Client Relationships and Performance Metrics
The episode concludes with guidance on nurturing client relationships and optimizing performance metrics to ensure the sustainability of performance-based models. Strategies include conducting audits to assess client fit, proactively adjusting pricing models as needed, and monitoring key performance indicators to drive mutual success.
00:01 - 00:21 - Introduction: Marcel introduces the episode and guest Chris Rudolph, a business coach specializing in helping agency owners grow their businesses and improve their lifestyles.
00:21 - 01:05 - Chris’s Background: Chris shares his journey from starting in the fitness industry to coaching agency owners, emphasizing his accidental entry into the agency space.
01:05 - 02:41 - Why Agencies?: Chris explains his focus on agencies, driven by their unique challenges and his passion for helping agency owners develop CEO skills they typically lack.
02:41 - 03:11 - Changes in the Agency Landscape: Discussion on how COVID-19 and economic changes have affected agency pricing, scoping, and client retention strategies.
03:11 - 06:17 - Opportunities from Disruption: Chris highlights how disruptions can open up opportunities for agencies ready to adapt, especially in terms of performance retainers.
06:17 - 09:18 - Hybrid Retainer Model: Chris introduces his hybrid model combining flat fee retainers with performance-based components to balance risk and reward.
09:18 - 11:09 - Determining the Base Retainer: The conversation dives into how to calculate a base retainer that covers costs and a margin, ensuring agencies don’t lose money on performance-based contracts.
11:09 - 18:59 - Setting Performance Fees: Tips on simple and effective ways to structure performance fees based on net sales, ROAS, or cost per lead, depending on the agency’s services.
18:59 - 27:09 - Audit Process for Client Acquisition: Chris describes the process of conducting audits for potential clients to assess fit and demonstrate value before proposing a retainer model.
27:09 - 35:26 - Retaining Clients Through Transition: Strategies for transitioning existing clients facing churn or cancellations to the hybrid performance-based model as a way to retain their business.