I got an email the other day from a copywriter who’d been offered a gig that was 100% “pay for performance…”
And even though it’s not Mailbox Monday, I felt like I wanted to take today to address this situation. Because if you’re a freelancer and you haven’t been asked to work on these terms yet, it’s only a matter of time.
Here’s how it works…
A client has big dreams, and big ambitions. They recognize the value of copy — and how much they need to have written in order to reach their goals.
But they don’t want to write the copy, and they don’t have anyone on their team who can.
So they come a knockin’…
“I’ve got an incredible deal for you,” they tell you. “In the next few years, we’re going to have thousands of customers paying us bookoo bucks. And if you’re willing to help us get those customers, we’re happy to pay you a generous percentage of sales!”
It sounds good, at first. It’s a big income opportunity. It’s ALWAYS a big income opportunity.
There’s so much potential. And since you’re probably only entertaining an offer like this if you’re fairly new to the field, it’s a great opportunity to develop your skills and prove yourself.
So you start to think about it.
Then, you start to ask questions…
YOU: “So, how many customers do you have now?”
THEM: “Uh… None. But this thing is going to be a hit. Everyone involved will make a fortune.”
YOU: “And what proof do you have that you actually have an offer the market will respond to?”
THEM: “Um… What do you mean? Isn’t it obvious this is going to be huge?”
YOU: “Well, it does seem like a great product. But I just want to cover my bases here. Surely you understand. So, how are you going to make sure your offer gets in front of as many buyers as possible?”
THEM: “That’s easy — you’re going to help! You’re going to write copy that’s so great, people are going to be sharing this with their friends!”
And so on…
Back and forth. Big dreams and big ambitions, with no proof there’s an actual profitable business anywhere to be found.
Have we all been there, in that entrepreneur’s shoes, with our past big ideas? YES!
Is it possible that they’re right, that this is going to be a runaway hit, and you could make a fortune? ABSOLUTELY!
Should you rely on this to pay your mortgage, put clothes on your family’s back, and put food in their stomachs? NO WAY!
Here’s the thing about opportunities like this…
Any given opportunity might turn into something big. If you find an opportunity like this where…
- You can actually become a PARTNER in its success, and influence the work that goes in (and the results that come out), you may be able to turn it into a big win.
- You have a clear indication that there is a MARKET for the product or service, and it will meet a pent-up market demand.
- You know you have a compelling OFFER that qualified buyers will want to scoop up, that’s competitively unique and superior to other options available to the market.
- Your family’s finances are covered, so you’re not relying purely on this thing to work out to make sure everybody is fed.
- You believe you will be happy working in this arrangement even when it takes 5X as long and is 5X as hard to reach your targets as even your most conservative estimate.
If ALL of those things line up, then you have a MAYBE.
Then, you might think long and hard about it. But the vast, vast majority of these “pay for performance” arrangements will fall apart long, long before this.
If the project doesn’t work on those terms, I recommend a counter-proposal.
Basically, tell them you’re happy to work on an “advance against royalty” basis.
Yes, you’ll work on performance. No problem. You just ask a nonrefundable advance of royalties in the amount of whatever it will take to make sure your income goals are met during the work.
They won’t have to pay you any more until performance exceeds whatever amount would lead to the advance payment amount. But you’re covered in the event that their big ambitions don’t work out exactly like expected.
These two steps eliminate probably 99 out of 100 opportunities…
Either the opportunity isn’t going to meet the 5 criteria above that may justify a pure “pay for performance” arrangement.
Or you’re going to propose advance payments, and the oh-so-excited entrepreneur is going to change his or her tune, and run off in search of another sucker.
1 in 100 of these opportunities though will find the just-right meeting of the minds…
Either everything makes sense for you to move forward as a partner who gets paid based on success (in which case you should also think exit strategy if it’s not working out)…
Or, the person who originally wanted to pay you on performance only agrees to the advance against royalty terms…
Either of these outcomes are extremely rare, when you’re approached on a strictly “pay for performance” terms.
For the most part, what you’ll find are folks with few resources and giant ambitions looking to take advantage of anyone who will say “yes.” Which usually doesn’t bode well for the future success of their (or your) business!
It’s far less of a headache to go find clients with resources, who are willing to pay at least some small sum in advance of work, to justify your time… Than it is to deal with the repercussions of an exclusively “pay for performance” deal gone wrong.
Go out and do the work of finding better clients. That’s a “pay for performance” deal that’s most definitely worth your time!
Yours for bigger breakthroughs,