Pros and cons of commission-based agency new business prospecting

Hello, ad agency new business fan. Must be something in the water. Or the economy. But yours truly has been approached three times in the last three months with the idea of commission-based prospecting. This post will explore a few of the pros and cons from your perspective, the ad agency principal.

Before we get started, maybe we should define the idea. It goes a little something like this: “you get us a meeting or bring us a lead that turns into business, and we’ll give you a percentage of the revenue.” There are shades and variations, of course. But that’s the general gist.

Pros

• You only pay when it works. Seems to be the leading benefit, right? Gosh, that makes a lot of sense from your perspective.
• Add more attention to your need. What I’m trying to say here is that you will have more people thinking about new business for your agency. In part, because they’re being compensated for it.
• Expand your agency’s reach.  Similar and connected to the previous point. More eyeballs means more potential connections or relationships you might be in a position to develop.

Cons

• Lack of proactivity. Your outside relationship will probably not be too aggressive on your behalf. There’s no incentive to work, as there’s no guarantee of being paid.
• Lack of continuity. It ain’t working all the time. Most agencies I know are looking for a pipeline that delivers a steady stream of leads. Commission-based prospecting is convenience-based. No one is consistently, day-in, day-out working a plan.
• Lack of control. Do you have any idea what this outsider is saying about you? Any idea on who they’re speaking to? <Potential Shudder>
• Less profitable. These “friends of the agency” is not doing this out of the goodness of their hearts. That money will coming from your profits. But wait, there’s more… you will still be investing to close the business!

You are being spared any ethical or moral argument around ye olde slippery slope. That’s not up to me to pontificate at large on. But of course, can’t help but think about the wise words of  Ford Harding, professional service marketing guru. My take on his perspective? Folks who bill by the hour should behave in a way that lets them sleep at night and do their mothers proud. He might also suggest that any and all parties need transparency. This includes the client. They should know that his or her buddy’s recommendation is, in fact, a paid endorsement. Just sayin’. <flourish>

From the prospector’s viewpoint, of course, this has far more cons than pros. But the royal we of Thunderclap digresses!

Should you have any thoughts or comments, as always, feel free… Thanks!

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