Should Small Businesses Share Revenue with Agencies?

How many marketing campaigns have you invested in without seeing concrete results?

You may have an agency set you up with a sophisticated-looking website, blog and social media account, but your bottom line remains the same.

You may get plenty of pageviews, but the people who come to your website rarely turn into paying customers.

For small businesses, one answer could be sharing revenue with marketing agencies.

If the campaign is successful, your agency is rewarded. If you’re not successful, the agency is held accountable.

Here are some of the benefits of revenue-share marketing:

Why Revenue-Share Marketing is Good for Small Business

Your Agency Will Work Harder

When you set up a revenue-share agreement with a marketing agency, they’ll have more to lose if they don’t do a good job for your business. Your loss is their loss.

This means the marketing agency is going to be more motivated to do their work well. It’s no longer just a question of getting your approval for their campaign. It’s a matter of seeing actual results.

They’ll Work With You, Not For You

Another advantage of revenue sharing is you tend to work in closer contact with your digital agency. You don’t just tell them what type of campaign you want and approve of the results. Instead, you’re involved in each step of the journey.

The agency will need to keep you in the loop while they’re preparing the campaign. After that, you’ll need to share your new financial figures with them to find out whether their campaign has had any results. They’ll also need to tell you how many views you’ve received and how many of them have turned into customers.

When you and your agency share data with each other, there’s better communication between the two parties. They’ll understand what you’re looking for and you’ll understand what they’re doing to increase your bottom line. This improvement in communication means you’ll develop a long-term partnership.

You Know Exactly What’s Going on at All Times

When you run a small business, it’s easy to lose track of what’s going on in different parts of your company. The sales department may not know what the accounting department is doing and vice versa. The same is true of any tasks you might outsource, such as marketing.

But when you get into a revenue-sharing agreement, there’s going to be more communication between your marketing agency and yourself. And this means you’re in the loop with everything that’s going on. This means your business will be more organized in the long run.

You Don’t Pay More Than You Can Afford

There are times when companies end up paying large amounts for marketing campaigns they can’t afford.

However, revenue share means you only pay what you can afford. If you get very few new customers as a result of a campaign, you pay your agency less. If you get many, you pay them more. Either way, the amount you have to pay will be in proportion to what your company makes.

You Build Partnerships

Every small business owner knows in order to get ahead, you have to build partnerships with people and other businesses. And when you work closely with a company in a revenue share setting, you develop a relationship with them in that you both have skin in the same game.

A partnership with your marketing agency means you will build a mutual trust — they’ll trust you to manage your business, and you’ll trust them to market your product or service. Each side wants the best outcome possible and has the other party’s best interests in mind.