Lately, I’ve been getting more questions about exactly how to measure value in a Pay-on-Performance model. This begs the question - is there a growing interest in my new type of PR services or am I not explaining it right? Well, it’s probably a bit of both. My firm, Stalwart Communications, now boasts a client base in the double digits after a little more than a year in operation, and its customers have certainly become partners by offering unsolicited testimonials and providing references. However, when I speak to new prospects, I see blank stares in some cases about how this can be done and what exactly will be measured. So in an attempt to better explain the value of Pay-on-Performance, I will create a series of blog entries to discuss the model in general and how it is applied to client engagements. I would also welcome feedback and - if warranted - critique at any time by commenting on this blog. Before we begin, let’s review in general my definition of Pay-on-Performance. In essence, it is the alignment of no less than 50 percent of agency revenues to actually delivering marketing and PR results for a client. Agencies that use this fee structure also do not track hours, but rather the success of actually producing results, such as securing positive press coverage and acquiring qualified customer, partner and/or investor leads. Fees are aligned accordingly. The general benefits of such an agency-client relationship include: * Performance metrics/expectations are outlined and agreed upon in full between the agency and the client before an agreement is executed, since it will determine how and for what an agency gets paid. * The business risk is shared between both parties. The agency doesn’t make its money unless it can produce. * The ROI is embedded in the fee structure. * Client satisfaction and understanding increases. * Client retention increases. * Client turnover/churn decreases. * Client referral rate increases. Coming in Part II - How Pay-on-Performance works for Media Relations efforts.