Anyone who wants to win new customers through online advertising sooner or later faces the same question: an agency on a monthly retainer, or a provider that charges per result? Both can work. What matters is who carries the risk.
The two models at a glance
With a retainer, you pay a fixed monthly amount for management, regardless of the result. With the pay-per-appointment model, you pay for booked conversations in your calendar. The ad budget comes on top in both cases.
The incentive decides
An agency on a retainer earns the most when the contract runs for a long time. That doesn't make it bad, but its revenue doesn't depend directly on your customers. With pay per appointment it's the other way round: no appointment, no revenue for the provider.
"Don't ask what an agency can do. Ask how it earns its money."
How to do the maths
Three numbers are enough for a first comparison:
- What is a new customer worth to you? Order value times repeat rate.
- How many of your first conversations turn into orders?
- What does an appointment cost you today, including your own time?
What to look for when comparing
- What exactly counts as a result: a contact, an enquiry or a booked appointment?
- Are the appointments exclusive, or do enquiries go to several providers?
- How long is the minimum term, and what happens if nothing comes in?
- Who owns the accounts, campaigns and data?
Conclusion
A retainer suits you if you want to outsource marketing long term and consciously carry the risk. Pay per appointment suits you if your revenue starts with a conversation and you'd rather pay for results than for time.
