The Social Pay-off in Profit-Sharing Deals

My upcoming article in Visibility Magazine, “Revenue Share Deals in Search Marketing,” explains the pros and cons of such deals, but here I want to focus on a less numerical and more social facet of the mutual win.

The Social Pay-Off

Revenue share deals span at least a year, and where a lot of work is involved, can span 3 years or more. So this is a long-term relationship (at least by Hollywood standards), if not a marriage. Because the SEM firm or free-lancer has incentives completely in line with the client, who is now really a partner, the talks and emails tend to be more enjoyable for both parties.

In revenue share deals both parties share the joy of success more than in typical pay-for-services contracts. Sure, I’m happy when a typical pay-for-service client wins (OK, I confess to being a little miffed when, back at the turn of the century, a whole family retired early and wealthy because of a mere 20G of my firm’s work). But I don’t know, maybe it has to do with some hunting instinct: if the partner and I are both strutting back to the camp with a big carcass on our shoulders, it just feels like, “Yeah!, that’s good business. Let’s do it again soon, like tomorrow.” And sure enough we do it again tomorrow because that’s the deal.

The same is true with commiserating on disappointments about one or another tactic employed. The client isn’t dismayed that the firm made their money, and, well, sorry the results fell short. Nor is the SEM firm left feeling a little guilty. Of course, I’m only imaging this – my firm has never done anything in a revenue share that did not succeed marvelously. Bosh! But seriously, failure is very rare when a good SEM firm has incentive and the client’s offering meets a market demand. Instead, both parties learn from the failure and move on in amity together.

Like any business deal, revenue sharing contracts are fundamentally about profit, but at the end of the day, it’s nice to feel the mutual, social experience of walking – and running and jumping — with a fellow traveler down the paths of profit together.

I would be grateful to hear about your experiences with a revenue share deal, and how you felt about it along the way.

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