Should Marketing Agencies Charge Based on Sales Performance?

If you're a client looking for a marketing agency who charges based on sales performance, or a fellow agency owner who isn't sure if they should offer this type of service, keep reading.

As the owner of The Digital Perch, a digital marketing agency, I occasionally get asked by prospective clients if I’d be willing to charge based on performance — specifically, a percentage of the sales I help generate.

On paper, it sounds appealing: the client pays only if results come in.

But in practice? It’s rarely that simple. And that’s why I always say no.

Why Marketing Agencies Should Charge Hourly

I charge clients based on the estimated time it takes to complete monthly marketing tasks. Why? Because marketing success is influenced by a wide range of variables — many of which are out of my control.

If I drive traffic to your site but your website is outdated, confusing, or slow, conversions are going to tank — and I’m not responsible for that. I wasn’t hired to fix the site. So if the sales aren’t there, does that mean I didn’t perform? Not at all.

This is the biggest issue with performance-based pricing: it assumes I have full control over the outcome, when in reality, marketing only works if all the parts — from lead generation to sales process — are aligned and functioning well.

Some marketers I've chatted with on Reddit argue that performance-based pricing is more viable with PPC (pay per click) or digital ads, and to an extent, they’re right. Those campaigns come with built-in tracking and clearer attribution.

But even then, it’s not foolproof. Leads can come in, but if the client’s team drops the ball on follow-up, those leads go cold — and again, that’s not on me.

Other efforts like SEO, Google Business Profile management, email newsletters, and organic social media are even harder to tie directly to sales. There’s no clean, linear attribution model that tells you, “This Instagram Reel closed the deal.” Success here is long-term, cumulative, and often indirect.

Performance-based pricing also adds a layer of complexity when it comes to tracking and accountability. I’ve seen agencies try to solve this by building and controlling every aspect of the sales funnel — from ads to forms to email automation — just so they can confidently claim credit for the revenue. But at that point, you’re practically running the client’s business, and unless you’re getting a hefty cut, the workload isn’t worth it.

A few agency owners on Reddit shared their own struggles with this model. Some tried hybrid approaches with small retainers and performance bonuses based on KPIs like traffic or leads, but even that got messy. Others noted that unless you have full access to the sales process and clear data attribution tools like WhatConverts, it’s hard to avoid disputes. At the end of the day, clients want results — but they don’t always see or value the behind-the-scenes work it takes to get there.

So no, I don’t work on commission, and I’m not planning to.

I prefer a retainer model built on transparency, consistency, and mutual respect. I bring the strategy, execution, and expertise; the client brings the product, process, and follow-through.

That’s the real partnership — and in my experience, it works a whole lot better than chasing percentages.