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The Factory Floor is hosted by the three co-founders of Conversion Factory, the marketing agency at the forefront of SaaS growth, marketing, and tech trends. Episodes are released on Twitter one day early, @coreyhainesco.
Every other week Corey, Zach, and Nick break down what’s working right now in SaaS marketing, share real-world lessons from the field, and give you the strategies you need to outpace the competition.
You can also find us on YouTube, X, and everywhere you listen to podcasts!
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Nick Loudon (00:00)
let's do it. Me, me, me, me, me. Okay, got it. Here we go. Okay, shut up, stop.
Corey Haines (00:04)
Grrrr
Zach Stevens (00:06)
Unique New York, unique New York. Human
Torch was denied a bank loan.
Nick Loudon (00:12)
What is that?
Okay. Hey everybody. Welcome to the factory floor. ⁓ I am joined today by get this two faces you've seen on every single episode. ⁓
I am, my name is Nick and I'm joined by Corey Haines and ⁓ Zach Stevens. We're here to talk about what we wanna talk about, honestly. That's how this works typically. ⁓ But no, today we're talking about ⁓ pricing models actually, ⁓ specifically creative agency or creative firm ⁓ pricing models. So there's a bunch that we have that we've kind of like listed out a few, like here's the most common.
know, pricing models that people use, which we use one of them or a variation of one of them. And ⁓ we had AI ⁓ like expand on them and give us like, Hey, what do people think are the pros and cons of these things? And we're going to kind of go through each of them real quick and hit on the benefits and the drawbacks for each of them and either agree, disagree, add to take away from each of those and kind of just cut through
through the, I guess all the fluff that's associated with all these pricing ⁓ models. So how does that sound to you guys? Are we down for this? Zach is so down. This is Zach's baby. He loves pricing models. He's obsessed with pricing models. ⁓ Okay, the first and potentially the most controversial, my take is hourly. Hourly pricing ⁓ for creative.
Zach Stevens (01:38)
I'm so down. I'm down with the sickness.
Nick Loudon (01:57)
agency or creative firm. ⁓ So let's talk benefits first and what the overlords of AI gave us as the benefits. First one we have is you only pay for actual work done. Is that even true? I don't think it's true.
Zach Stevens (02:15)
No, I disagree with, I disagree
with that fundamentally. ⁓ the, cool thing about the benefits piece to hourly billing is that we can just debunk all of it because I don't think that there's any world where hourly billing is beneficial to anybody, both on the agency side and the client side. I just don't think there's any benefits to it.
Corey Haines (02:19)
Yeah.
Nick Loudon (02:36)
you only pay for hours logged, could, anything could have done anything in the hours they've logged. So I totally disagree.
Zach Stevens (02:43)
Yeah.
Corey Haines (02:43)
Mm-hmm.
Zach Stevens (02:47)
My, the
best way I've heard it phrased is that, people always say like, you're, you gotta pay for your, time. Like the time is the thing. Say, okay, so if I was organizing your sock drawer, would you pay me my effective hourly rate of a hundred and something dollars per hour? No. Why? It's the same time. It's on the same person. And it's because you're doing, you're organizing my sock drawer. Exactly. The thing isn't valuable to you, but this other work.
is so that's the thing that you are getting. Honestly, I just think, I think there's a bunch of drawbacks and actually I don't think it's as controversial anymore. Hourly billing, because I think that we've just moved past hourly billing as a standard and that everyone agrees. Yeah. And now the other ones are becoming more controversial, like value-based pricing, custom projects, productized retainer models, performance.
Nick Loudon (03:22)
that.
Corey Haines (03:35)
Everyone agrees, yeah.
Nick Loudon (03:37)
Yeah.
Zach Stevens (03:46)
Those are the ones I think are more controversial.
Nick Loudon (03:48)
Yeah,
yeah, the other benefits [hourly billing has] are flexibility to adjust scope as needed. I guess that's true. ⁓ But that's not something that the other models don't have necessarily. Some of them don't. But most of them, I think, have that flexibility, and then transparency in how the time is spent.
not always true. ⁓ It kind of depends on how the agency or firm reports what's going on and the hours being spent doing it. it's, I don't know, I feel like they're a little disingenuous with the benefits personally.
Corey Haines (04:16)
Mm-hmm.
Zach Stevens (04:24)
Definitely. mean, I can think of plenty of times where I've had ideas out on walks and then you run into the conundrum of, well, does the walk technically work or was it not? Or was me thinking about this in the shower? Was that technically work? Was the dream that I had where this illustration and creative concept came to me, was that work? Cause if so, I'm just going to charge for 24 hours a day and say, I work all the time.
Corey Haines (04:47)
Yeah, right. Right. I think that
Nick Loudon (04:48)
Yeah, totally.
Corey Haines (04:50)
if you're, well, if you're a SaaS startup and you're evaluating creative or marketing agencies and you come across one of those that charges on an hourly rate, they're like, we'll just bill you a flat a hundred bucks an hour or whatever it is immediate red flag because what that communicates is, Hey, we're going to charge you a hundred dollars an hour.
Nick Loudon (05:07)
run
Corey Haines (05:15)
so that we can pay our staff 50 bucks an hour and then take the difference for no reason whatsoever. And we don't care about the outcomes. We don't care about how long it takes. We don't even care what you ask us to do. All we want to do is fill the hours. And I've been there. I've hired agencies who charge hourly. And I say, okay, you know, and then every time you have to ask for work, that's maybe above the like minimum number of hours that you've agreed on per month.
then I have to ask the question, well, how many hours is this going to take you guys? And then they're like, ⁓ well, it could take four or it take 12. We'll see. That's not helpful. But like, what do you mean? And so it, like you said, it goes back to the same question of like, well, what is the thing that I want done? Why don't you just charge me for that? Because I don't care how long it takes for you to do this thing. I just want the thing done.
And it's always better for me as the buyer, as the person hiring the marketing or creative agency to pay for less hours, because that means that I get it faster and I'm probably spending less money and it's less hassle for me to like scope out and quote and ration for whatever I'm to pay for.
Nick Loudon (06:39)
Yeah.
Zach Stevens (06:39)
Okay, yeah, I think that hourly billing is just there are no benefits only drawbacks. Next please.
Nick Loudon (06:44)
Yeah, the nail is in the coffin. It's over. ⁓
Okay, let's hit the next one, which is project based or like ⁓ productized, like custom pricing per item that we're working with. Is that kind of what we're looking for for this one?
Zach Stevens (07:01)
Not necessarily. I think that this just means fixed scope for fixed price. And the price can vary because the little bit of like peaking behind the curtain, the best agencies that are the most lucrative are the ones that have divergent pricing for a convergent product or service that they do. For example, if I was just to sell brand identity services where
Nick Loudon (07:06)
Okay.
Zach Stevens (07:28)
I went through the same process regardless of the client, but then I was able to change the price of that service based on the client and the amount of risk they were taking on in the level of complexity of their product. That would be the most lucrative model for, for an agency. but this could also be something that is far more transparent where you have a set of deliverables that you provide.
a price for on your website and you buy it the same way you would buy a box of crackers where you know exactly what you're getting. And this is the end result that you can expect.
Nick Loudon (08:00)
Mm-hmm.
Yeah, like a productized. Yeah, fixed scope, cost. ⁓
Zach Stevens (08:10)
Yeah. And I think,
I think that this, this has a really good balance of benefits and drawbacks, which is a good thing.
Nick Loudon (08:20)
Yeah, I think their benefits, the benefits associated with these for the agency ⁓ and for the buyer are like pretty good. ⁓ Like the ones listed that this thing listed is, you know, the exact cost upfront. I like that. But also it doesn't like come into, it doesn't come into account with like
the sometimes projects change or halfway through you realize you need this other page built or whatever and that's going to change and cause a little bit of complication. ⁓ And then specifically the last benefit listed, which is the agency is motivated to work efficiently.
pretty wholeheartedly agree with that. Like the agency is like, we know exactly how much we're getting, the longer it takes to do it, the less profit we have in this. So we need to like get it done on a quick timeline. It benefits them, it benefits us. It just feels very positive.
Zach Stevens (09:16)
Yeah, there is a benefit on here that I think is interesting, which is easier to get budget approval. That's one that would, that the AI listed, which I, I would push back on that. I think that it doesn't always make it the case because like any other kind of product, like shoes, for example, you might have a budget for shoes. There's a lot of different variety when it comes to shoes.
Corey Haines (09:22)
Yeah.
Zach Stevens (09:42)
And it ends up becoming an emotional decision. And the same thing happens when you're buying creative services, because it might be easier to get a, like you might have a set budget for it. As far as whether that is going to suffice your needs is a different story. Because even within the example that I gave of brand identity design, there are people who charge in the tens of thousands of dollars for that. And then there are people that charge $3,000 and gauging
Corey Haines (10:10)
Mm-hmm.
Zach Stevens (10:11)
which one is going to be a good fit for you becomes really hard. ⁓ So I guess that's a good segue into some of the drawbacks, which is that gauging fit is really hard with these initial scoped out projects, especially if you've never worked together. Cause I think that scoping in general is a very arduous task because the agency wants to make sure that they are not getting into, they're not biting off more than they can chew. But
client wants to make sure that they are actually going to get the thing that they want. And there's always a gap in understanding there that gradually closes as you work more and more together. But that leads to things like change orders or alterations in scope. And then you essentially get sucked into a similar cycle of we thought we were going to pay this much, but when we actually discovered what the real problem was, we added on
Nick Loudon (10:47)
you
Zach Stevens (11:08)
2X what we were planning to spend initially because it was so complex.
Nick Loudon (11:13)
I think, sorry, go ahead, Corey.
Corey Haines (11:14)
Yeah.
I was just going to say, love project based (pricing). I think it's great. It's especially easy to get budget approval for it it's like, here's what we're getting. Here's what it costs. And that's an easy decision to pass on to someone else to make. But ⁓ definitely one of the big drawbacks, one of the big downsides is it kind of commoditizes the work in a way where you're like, okay, well, can we find someone else to get this, to do the same thing for like a little bit less because
If it's the same thing, then then why not? and it's definitely pretty rigid. ⁓ dang it. Well, I was going to say it's also the problem of like, don't ask a barber if you need a haircut. Like he's always going to say yes. Right. And so if you go to someone and you're like, Hey, we're thinking about doing this and you only offer this, of course you're going to say yes. Right.
Nick Loudon (12:09)
that. Yes, you should do it.
Corey Haines (12:14)
but maybe you actually could have made more money and done more productive value driven work if you said, I know you want this, but I think actually what you need is that. And then you can have a different conversation with maybe different deliverables.
Nick Loudon (12:31)
The ease of budget approval benefit feels a bit gray to me because there's different types of creative firms that work in different styles. Like us, for example, we are ⁓ much more close to like in-house team where you like you bring us on and we work very closely on a long-term basis with someone. And like our pricing versus like if we did project base, like it.
Some people might find it easier to get approval for our pricing because it's like, it's like instead of hiring, you know, these people individually and bringing them on internally, I'm hiring this agency that does it all almost in house, like, like arm and arm with the team. And we're getting it instead of spending this much on this person, this much on this person, this much on this person, we're spending one price on all of them and getting access to all of them, which feels easier to me to go get approval. But
that's just for those teams that are looking for that type of agency versus like an agency that's like one time deal, one project, three months, we're done. ⁓ So I think it's a little bit of a gray area with the budget approval ⁓ question.
Corey Haines (13:43)
definitely differs if there's an ongoing relationship or not.
Nick Loudon (13:47)
Yeah.
Zach Stevens (13:48)
Yeah,
the last thing I wanted to touch on with project based is the commitment because say you do get this really large project. Maybe it's like a 150 page website overhaul, new design, new copy, new everything. And it's going to be $200,000 to get the thing done.
what's gonna happen is you will pay a substantial deposit on that to start the work so that the agency gets moving forward. But then you might figure out this is not a good fit and we are, let's see, what's 200,000, we'll make it 200,000.
$210,000 just for the sake of simplicity with math. We paid 33 % upfront for this. So we're 70 grand in the hole to get this project started. And we really don't want to continue down this path with this agency. If we part ways, we are out one third of our budget that was allocated for this project and we have nothing. So I think that there is a...
a major drawback as far as commitment to an agency, particularly if you have not worked together, which is I think the scary part. There is really no way to date very easily around a big project with a custom based price for this, or even a productized price that's still very expensive. You you just don't know how good of a fit it's going to be until you've already made a significant investment.
Nick Loudon (15:23)
Yeah. I feel like ⁓ this fixed price fixed, you know, project bucket is probably makes up a majority of the larger creative agencies out there. So that's there's something to be said for that too. But let's move on to the next one. If that's cool with you guys.
Corey Haines (15:43)
Yeah, I was just gonna say a
lot of people move from hourly to project-based. So it's like, most are gonna fit in one of those two buckets, but it feels like what's more popular or kind of smarter objectively is people agree project-based over hourly usually.
Zach Stevens (15:53)
Sorry. Sorry. ⁓
Nick Loudon (16:01)
Yeah. Zach has an intruder.
Zach Stevens (16:03)
Sorry, had a
I had a I had a little munchkin at my door. Yeah
Nick Loudon (16:07)
crawling intruder. ⁓
Corey Haines (16:07)
I'm
Nick Loudon (16:09)
Okay, let's talk about one of our favorites, the retainer model. Okay, so we, I mean, we're retainer model, but it feels a little bit different just because of our month to month, ⁓ you know, our month to month nature, but we're essentially a retainer model or subscription type model.
Zach Stevens (16:14)
Hmm.
Nick Loudon (16:32)
⁓ Obviously, we feel that there's a lot of benefits with this. The ones that are listed here are predictable monthly costs, right? So you have, you know, it's X amount per month to retain these people that's there and they're working for you. That's it. ⁓ Dedicated agency attention. So that's obviously super important. And then priority service. ⁓ What do you guys think? Are these benefits?
the main benefits that you would list for this? Or do you disagree with any of them?
Zach Stevens (17:05)
Um, I think that first what I would do is I would draw a very clear distinction here between an hourly based retainer and a, uh, a retainer that is more along the lines of an all you can eat, but so much as your plate can hold, uh, the, the hourly based retainers have the same issues as hourly billing. The only difference is you've covered a, you're usually, you're at that point, you're so big that your people are buying it chunks of your time. Uh,
But then you run it, it's basically the same thing, just in larger quantities. The thing that I think is different about the All You Can Eat model, which is really nice, is the lack of scope, meaning that things are very flexible. And if you have an agency that's able to handle, obviously I'm very biased on this, and I've given a lot of thought to why we could even make a case for a model like ours.
Corey Haines (17:35)
Basically the same thing.
Zach Stevens (17:59)
is that if you have an agency that can handle the strategic foundational work and then need them to execute on everything that is layered on top of that.
It's never a question of scope and more a matter of just getting through it. The same way that you would with an internal team. You're not going to overload an internal team with more work than they can handle. And the agency's kind of already taken that off your plate as far as putting a limit or a cap, like we have with the one task, two tasks, three tasks, based on how much we are being compensated for that. ⁓
But the lack of scope is really powerful because there's nothing that's off limits. Like, what do you need? Great. We'll get on that. Do you want that to happen right now? Or do you want that to happen after the thing we're currently working on? Oh, you want to change and make some revisions? Great. We don't have a cap on three revisions of this logo. We'll iterate on it until you feel that it's up to par. All the while providing expertise and access to, you know, whatever. Like we had a client today who asked
Nick Loudon (18:39)
Yeah.
Zach Stevens (19:04)
me for opinions on a domain that they were going to purchase because the one they thought they were going to buy was now taken. And I didn't have to start a ticker or a timer to track my time. And since they are a client that is on a recurring basis, obviously I want to do right by them and give them as much value as they can get that I feel is feasible. So a question like that isn't something that I'm going to put on the back burner because it
It feels like it's out of scope or, ⁓ charging them an hourly fee just because I had to answer a question for them. So the drawbacks to that, to this, at least the ones that I've thought of are, ⁓ there is, it is a little bit harder to gauge predictability around turnaround times. ⁓ we give like
Nick Loudon (19:57)
Mm-hmm.
Zach Stevens (20:00)
Our goal is always two to three days of having substantial work update. And there is a drawback to that because you don't always know how much things will cost, particularly when you get into the realm of revisions and how big we want the revisions to go. But even in spite of that, the way that we've always phrased it is you're paying until you feel like you are no longer getting value.
And that's the beauty of it, which is it's not based on anything other than the most important thing, which is do you feel like you're getting more than your money is, are you getting more value than the money that you are putting in? And at the minute you are not, you can leave.
Nick Loudon (20:45)
Yeah, obviously like I You know, we all like the general subscription retainer model that we have set up I do think what you said about the in terms of drawbacks the ⁓ the turn times and ⁓ Like laying expect expectations, excuse me for How the work it's all the any issue or the primary questions that people have
seem to almost always be based around like work rate. Like if someone comes to us and they're like, I want a new website. Great. There's a, how many pages do you need a new brand? Do you you positioned? There's, know, there's a bazillion questions we can ask and try to figure out, okay, exactly how many like tasks is this? ⁓ but really they're just like, I need a new website. Like how long does that take? Like they go from A to Z and we have to be like, okay, but like you, I just need to show you really quick that there's B.
C, D and like show them the steps all the way until Z is delivered. ⁓ And that can, for some people they're like, right, this makes sense. And for every now and again, you get someone who's like, I just make the, make me a website. Like, I don't, what? Like just do it. How long does it take? You know, and they're just like very, exactly. And those types of people can't really handle sometimes our model, or at least they can't until they start.
Corey Haines (22:01)
Yeah, just tell me the price.
Nick Loudon (22:11)
And then they're like, ⁓ I see how this is. This is like, you're gonna do it as fast as possible and as fast as we can with the best possible work. And you're just gonna show it to me as you do it, as if you're like one of my employees working hard, ⁓ which I think is like the beauty of how we do our first month guarantee. I think that guarantee helps us a lot because that really gives the client who's not totally sure, but is like, let me just see what this is about an out. ⁓ And it's almost...
Have we ever had someone do it? don't think so. Yeah, so I don't know. That's my like, I think the biggest issues that we've always run into are people being confused about timelines and deliverable expectations.
Corey Haines (22:56)
Yeah. The, I was gonna say one of the other big benefits (of retainer pricing), I think that can't be understated enough or overstated enough is not only is there no scopes, but because there's no scopes, there's no scoping. There's also no quotes and no quoting, which means that you don't constantly have to get re-approval for budgets. Um, so yeah, it's harder to get budget approved for a retainer initially over like hourly or project based because it's a higher upfront commitment.
and there's more unknowns about the timelines and maybe the total cost of something that you have in mind, because everything kind of gets blended and melded together. But then you have so much freedom within that retainer that you don't have to ever do that budget approval ever again. And everything is capped at a monthly rate. And that was one of the big things when I was in house marketing was the CFO was always like,
Hey, can we just try to keep things under this number every month for these types of services and software is whatever. And for like a lot of other things, it would be very easy. Like, okay, just don't spend more than $5,000 a month on Google ads. Okay. Don't spend any more than a 100 hours on contractors. Don't spend any more than $1,000 a month on software services. But then like I have a new website to build.
Okay. That's going to be 50 grand. Do I pay that in five monthly installments? Do I pay that half upfront, half six months later? And then like the cash flow gets kind of crazy to budget for, but if you can get, you know, $10,000 a month approved once forever. Now the CFO is happy because he was like, okay, at least we know what to expect. It's not going to be higher. It's not going to be lower. It's exactly.
what it says it's going to be every single month.
Zach Stevens (24:56)
Yeah, it's no different than hiring an employee. And the nice thing is that this is an employee that does not have health benefits or payroll taxes or any of the other things that come along with hiring an employee and you can fire them whenever you want. Or vacations. That's right. No. And when we go on paternity leave, and when we go on paternity leave, cut.
Corey Haines (25:09)
or vacations.
Nick Loudon (25:11)
Yeah, yeah, they never get sick really either Somebody shows up and doesn't work. Yeah, let's go
Corey Haines (25:15)
Yeah.
perfect employee.
Zach Stevens (25:21)
Yeah, when we went on paternity leave, when it was just the three of us, everybody got a fat discount.
Nick Loudon (25:26)
Yeah.
Okay, let's hit the next one, which is one that you already mentioned, Zach, the hourly retainer slash all you can eat. Maybe just draw the line a little harder.
Zach Stevens (25:33)
Actually, I think.
⁓ well, I think that's the same thing. ⁓ this might, this is an error on my part, including it in here, but, ⁓ just to put a pin on it. The main thing to draw distinction with is that a, I think a true retainer is more based on access to transformational value on a recurring basis. That's it. Not an X amount of hours guaranteed per month, because who cares? It's about ability to get.
in front of people and have them take things off your plate again and again and again and again and again to keep doing that until you have no more work to do. And that's it. Thank you.
Nick Loudon (26:15)
Great job. That's a great pitch. Love
it. ⁓ Okay, let's hit the last one then, which is performance-based. ⁓ Do any of you have like, know anybody that does this in a creative agency, like on a regular?
Corey Haines (26:17)
Good summary.
Zach Stevens (26:21)
Yeah, this is...
I've pitched it a couple times. Uh, but the thing with the thing that I always get tripped up with performance based stuff is I'm for it. think that it's really a interesting way to go about it, especially when you have like a combo of say we were going to do a pitch deck for somebody and that pitch deck was designed to go raise their goals to series a of $7 million. You say great.
Well, we have two options. We can design the pitch deck, you'll get X amount of revisions for $20,000 or we'll cut that fee in half to 10 and we will work with you on it a continual basis until you raise your $7 million and when you do raise your $7 million, we get X percentage of your raise. Just to put it in.
giving a scenario that things easy to understand. The thing that I've always seen that's really difficult about that is that agencies that are competent enough to offer that kind of performance pay structure are not going to let you get all the value. Like we are going to take our cut. ⁓ Not we, they.
Nick Loudon (27:46)
They're gonna get their cut
Corey Haines (27:47)
Mm-hmm
Nick Loudon (27:55)
you
Zach Stevens (27:56)
We do not operate on a performance basis yet. We'll see. We're never going to. ⁓
Corey Haines (28:03)
Yeah,
I think it's like a, it's a damned if you do damned if you don't, because it's, an awesome offer, right? It's so attractive. It's like, Hey, if this doesn't work for you, you don't pay anything. They're like, okay, great. Go for it. We'll see what you can do. The problem is that if there's a low hit rate and, or if the performance that you're being paid on doesn't come until wait later down the line, which like MRR comes way later down the line.
Closed deals can come way later down the line. Things like SEO, even traffic can come way later down the line, right? The realization of brand value, if you're doing something like a logo or creative direction or whatever it is, can be realized way, way, way later down the line. And so yeah, you might not get paid at all. Even if you do, you might not get paid until way later.
But even if you do get paid and things do get well, it'll almost always be at a premium of what someone would pay for on any of the other models, hourly project based or retainer. And so there, as soon as it starts working and you get started, you start getting paid on your performance basis, they're going to be like, why are we paying you so much when now we can do this exact same thing for cheaper with someone else on a completely different model?
And so now you're going to be cut because why overpay when you don't have to, right? ⁓ So you assume all the risk without really reaping any of the benefits of the long-term value.
Zach Stevens (29:29)
Hmm
Nick Loudon (29:29)
Mm-hmm.
Zach Stevens (29:41)
Well, I agree. I think that that's more of an issue on the agency side, though. Not necessarily from the client's perspective. I think that from...
Corey Haines (29:52)
No, exactly. That's what I mean. The client has all the
power. It's, it's always kind of a, that's what I mean, Dan, if you do Dan, if you don't, if you're an agency, unless we're also dealing with, um, payment structures like royalties or equity, because now it's like a legal guarantee. But if we're just talking about, for example, like, Oh, we're a Facebook marketing agency and you pay $0 per month for our services.
Zach Stevens (29:56)
.
Nick Loudon (30:06)
Equity.
Corey Haines (30:21)
but we take, you know, 5 % of all of your sales that we generate. Yeah. Like a commission. As soon as that starts to look pretty expensive or okay, we're paying this agency $50,000 a month for something we can pay another Facebook agency, $10,000 a month to do the exact same thing. They will do it every single time unless again, it's within the form of equity or royalty where it's a legal obligation.
Nick Loudon (30:26)
Commission, yeah.
they will do that.
I think it's like you have the equity version, which is kind of like, this is your lottery ticket type pricing where it's like, look, I'll just, I'm trying to buy a bunch of lottery tickets and one of them will hit and I'll be decently okay. And then the performance based is, I think in theory it works on like shorter sprints.
If that makes sense, Alex Ramozzi comes to mind with like the gym lunch stuff that he did where he was like, I'll come in and for three weeks I'm gonna do this and I'm gonna collect all this money and keep it. But you keep all the memberships but I'm only gonna be there for a week. And they're just like, okay. And then after the week it's over and there's no more like performance thing. Cause there's this other recurring money that's coming in. In that scenario, it's like perfect.
Corey Haines (31:31)
Mm-hmm.
Nick Loudon (31:41)
Actually perfect ideal because they don't spend any money upfront but something like this where it's like, we're gonna be we could be working together for like years It's not gonna work. It's not gonna work long term
Corey Haines (31:50)
Yeah.
Yeah. I like Zach's original example of, ⁓ like raising money. For example, if you're like a startup pitch deck consultant and the goal for a startup is to raise money and, and it's fairly easy for you to do and you're happy. Well, yeah, I statistically like 99 out of a hundred, like don't raise money. So if you're happy just making money off of the one out of 100 that do, and you can get paid off of that, then great. Because that's like a very,
Nick Loudon (31:57)
How's it going? ⁓
Corey Haines (32:20)
one-time guaranteed outcome that you are paying for that they're probably going to be more than willing to pay for once. But yeah, think the, yeah, actually the ongoing versus one-time is actually a really interesting distinction about performance based.
Zach Stevens (32:35)
Yeah, it's fascinating. Cause especially cause I see a lot around guarantees. Like guarantees are the, that's the term de jour right now, as far as agencies or whatever. And it's complex because I don't think that either side is going to be very happy with that kind of, with that kind of work, you know, in its truest form. Client is not going to be happy to part with.
part of their pie, a large part of it, significantly larger than they would have paid if they had just taken the work at face value instead. And the agencies are, might be up for it, but like I said, the most competent ones that are sure, because they're not gonna make a stupid bet. They are going to make sure that they recoup two, three, five X, what they typically would on a project like that.
to make sure that it's worthwhile. So, on the subject of guarantees and performance-based, I don't think that it is as promising as it is in theory, particularly in practice.
Corey Haines (33:48)
Yeah.
Yeah. I mean, just look at my Twitter DMS. I could pull them up right now and there's like 20 Gen Z broccoli head looking dudes per day. Dming me being like, if I could bring you 10 new clients per month and you don't pay until that happens, would you be interested in having a call together? I'm like, no, because I know that you're not going to be able to do that.
Zach Stevens (34:14)
Yeah, it's fascinating. There is one last one, if you guys are up for it, that I thought of, which is bartering. I think this might be the coolest it is, because I've thought of this where the trade is something like, actually the person who I think of is my grandfather. So my grandfather,
Nick Loudon (34:16)
Yeah.
Go for it.
Is that a pricing model?
Zach Stevens (34:40)
who told me about one of my favorite Mexican food places, Maritzas.
And he lives right by there. He is a master plumber. so when at some point they were telling him about some issues they were having at their house and he went and did a quick fix. was like an hour and a half ⁓ worth of stuff, maybe two hours. And the homeowner in the restaurant asked him, how much? said, let me tell you the next time I come in for, for Mexican food. So we went and picked up food for our family one day. And he said, this is fair trade.
absolutely and then he leaves this big huge gaggle of Mexican food for us so I do think that in
very rare circumstances that there might be an alignment there. For example, I've always thought of be the dream to brand something like a taco shop or a sandwich place and get free tacos once a month for the rest of my life. That would be like one of the ultimate hacks. But I think that you could do that with tech or software too, where maybe it's something like if it is a tool that we know we are going to use in perpetuity, if you were an enterprise level software
Nick Loudon (35:43)
Awesome. ⁓
Zach Stevens (35:56)
for a brand that charged enterprise fees for a thing that you did and it was beneficial to an agency, maybe there's something there where there is a half off, but then an exchange in use for your tool, which I think is a, it seems archaic, but I think that it's not valuable. Or I think that it is valuable despite its antiquity.
Corey Haines (36:23)
It's valuable, just inefficient.
Nick Loudon (36:23)
Yeah.
Yeah.
Zach Stevens (36:26)
It's
definitely inefficient. I trade you four sheep for six ore. Is that fair? I don't know.
Corey Haines (36:31)
Yeah. Yeah, right. Exactly.
Nick Loudon (36:32)
Who
knows?
Corey Haines (36:35)
Just think of the last time you played Settlers of Cotan
Nick Loudon (36:38)
Yeah, I will say that like if we rebranded Southwest Airlines to get free flights for life would be awesome.
Zach Stevens (36:45)
Exactly,
know see so there there's opportunities like that that I think should be considered because I believe that there is just as much creativity in the way you price things as there is with the work itself so Never be afraid to
Nick Loudon (36:57)
Hmm.
Zach Stevens (37:02)
anybody who is looking to become a client of an agency, you might have something that's worth offering. And I'm putting this out there because if there is somebody who's like, I'm gonna open up that taco shop, come see me. And if we can work out a deal and your tacos are worthwhile, I will be all over that.
Nick Loudon (37:18)
Fair
warning to anyone listening Zach drives a hard bargain. Okay, the same guy ain't no pushover, ⁓ Awesome you guys this is a great episode super interesting talking through the different models ⁓ Yeah, super fun loved that ⁓ And I think that's it any last final words before we say our goodbyes No, say your piece good awesome, thanks for listening. See you guys next time
Zach Stevens (37:23)
You
No, I'm good.
Corey Haines (37:40)
covered at all.