AI & Automation
4 min4 October 2024

Why We Only Work on Revenue Share (And Why Most Won't)

Tristan Figredo

Founder, Evolve Strategists

I'm going to tell you something most agencies don't want you to think about:

The traditional agency model is broken by design.

Here's how it works:

You pay monthly retainer. Agency delivers "services." End of month, they get paid regardless of results.

Revenue goes up? Paid.

Revenue stays flat? Paid.

Revenue goes down? Still paid.

The incentives are misaligned from day one.

The Problem With Retainers

Retainer agencies are not incentivised to get results.

They're incentivised to keep you paying retainers.

Not the same thing.

Retainer model rewards:

Activity over outcome ("Look how many posts we made!")
Complexity over simplicity (more services = higher retainer)
Length over speed (why fix fast when you can fix slowly?)

If an agency gets paid the same whether you grow 5% or 50%, where's the pressure to get 50%?

Why Revenue Share Changes Everything

Our model: percentage of the growth we help create.

No retainer. No base fee. No "strategy consulting" charges.

Help you grow from $2M to $5M? Percentage of that $3M increase.

Don't grow your revenue? Don't get paid.

This changes everything:

1. We only take clients we can actually help. Can't see clear path to growth? Won't work together. Taking clients we can't help costs us money.

2. Speed matters. Not incentivised to stretch projects over 12 months. We want results fast because we don't get paid until they happen.

3. Outcomes over activity. Don't care about vanity metrics. Care about revenue. That's what determines compensation.

4. Think like partners, not vendors. Success literally tied to yours. Not maximizing billable hours. Maximizing growth.

5. Stay accountable. Every month, numbers tell the truth. Revenue grew? Earned it. Stagnated? Didn't.

Why Most Agencies Won't Do This

Revenue share sounds great. Why doesn't everyone do it?

1. Inconsistent revenue. Retainers are predictable. Revenue share fluctuates. Most prefer safety of guaranteed payments.

2. They can't actually move the needle. Revenue share only works if you reliably generate results. Many agencies can't.

3. Requires skin in the game. If strategies don't work, we don't eat. Uncomfortable. Most don't want that.

4. Client selection becomes critical. Can't work with just anyone. Need clients with good products, existing revenue, operational capacity. Retainer agencies take anyone who pays.

Who This Works For

Revenue share isn't for everyone.

Good fit:

$800K+ annual revenue already
Proven product/service with existing customers
Operational capacity to handle growth
Willingness to share financial data
Long-term thinking

Bad fit:

Brand new without proven offers
Looking for someone to blame
"Just test some things" mentality
Can't handle more demand

Not right for everyone.

For the businesses we do work with, alignment is complete.

Trust Goes Both Ways

Revenue share builds trust in both directions.

You trust us because we only make money when you do. Every dollar aimed at revenue because that's how we get paid.

We trust you because you've agreed to share upside. Not looking for cheap tactics. Looking for real growth.

Not vendor and client.

Partners in outcome.

The Uncomfortable Truth

Revenue share is harder for us than retainers would be.

More risk. Less predictable income. Have to be selective. Have to actually deliver.

But it's why our clients get better results.

When livelihood depends on your growth, we show up differently.

Not checking boxes. Solving problems.

Every strategy, every system, every optimisation comes back to one question:

"Will this increase revenue?"

If answer isn't clear yes, we don't do it.

Ready?

Five questions:

1. Already generating $800K+ annually?

2. Proven product/service customers love?

3. Operations can handle more demand?

4. Looking for partner, not vendor?

5. Comfortable with transparency on financial data?

Yes to all five? Revenue share might be right.

If not, plenty of good retainer agencies exist.

We're just not one of them.

Best relationships are built on aligned incentives.

Revenue share is how we put money where mouth is.

Aligned incentives. Aligned outcomes, Tristan

Want us to fix this for you?

Book a strategy call to see if we're a fit.