Revenue share vs retainer: how should you pay a marketing agency?

What is the difference between a retainer and a revenue share?

A retainer is a fixed monthly fee for an agreed amount of work, paid whether or not that work brings in customers, while a revenue share ties some or all of the fee to the revenue the marketing actually brings in. With a retainer you are buying time and output. With a revenue share you are buying an outcome, and the agency only earns its share when you do.

Many agreements mix the two: a smaller fixed base that covers the cost of doing the work, plus a share of the revenue on top.

When does a monthly retainer make sense?

A retainer makes sense when the work cannot be traced to a sale, or when you want a cost that never moves. Brand awareness, a product launch or keeping a busy social feed running are all useful, but none of them lead neatly to one invoice you can point at.

The trade-off is that a retainer pays for effort, not results. If the work does not bring in customers, you have still paid the full fee, so it is worth asking how progress will be reported before you sign.

When does a revenue share make sense?

A revenue share makes sense when enquiries and sales can be tracked back to the marketing that produced them. Online bookings, enquiry forms, calls from a tracked number and online orders are all easy to count, so both sides can see what the work earned.

It also changes what the agency cares about. A share of revenue rewards more paying customers, not more posts or more clicks, so the incentive is the same as yours.

What should a revenue share agreement spell out?

A revenue share agreement should put the base, the share and the definition of attributed revenue in writing before any work starts. Vague terms are where these deals go wrong, so check that yours answers each of these:

• The monthly base, if there is one, and what it covers
• The share, and whether it changes as you grow
• Exactly what counts as revenue the marketing generated
• How that revenue is tracked, and whether you can see the same numbers
• How much notice either side has to give, and whether there is an exit fee

How does Brands Made Known charge?

We charge a small monthly base plus a share of the revenue we can trace back to the work, and one plan has no base at all. Foundations and Growth carry a small base that covers the work. Everything has a $0 base and is paid purely from results.

The base, the share and what counts as revenue we generated are agreed in writing before we start. There is no minimum term and no exit fee, just 30 days notice to stop. The full plans are on our pricing section.

Which one should you choose?

Choose a revenue share if your sales can be tracked and you want your agency to carry some of the risk, and choose a retainer if the work is about awareness or you need a fixed cost. If you are not sure, tell us what you sell and what a customer is worth, and we will say which plan we would put you on and why, including if the answer is none of them. Start the conversation.

Still deciding whether to hire help at all? Read marketing agency vs in-house.