Why is there reluctance for new business agencies to work on a commission-only basis?

A frequent question we hear when doing our own new business prospecting (as well as on some inbound enquiries) is “Do you offer a per meeting rate? We would only work on a payment by results basis.”

I totally understand the request – I’d be over the moon to only ever pay for something that is a guaranteed dead cert!

However, when you are trying to arrange high level meetings with senior decision makers at companies you are hoping will give your agency tens (or quite often hundreds) of thousands of pounds each year for whatever marketing service you offer, the reality quickly sets in…

Agency new business is hard, hard work and probably the hardest part is the research, the stone turning and heavy lifting of the initial outbound prospecting and lead generation. It’s why we have existed for 40 years.

It’s different to bulk-selling a cheap product or service. There are multiple layers involved and you’d be very lucky to have somebody make a quick impulse buy for something like this without careful consideration first.

This article looks at the limitations and practicalities involved in trying to de-risk new business investment, with a few analogies thrown in for good measure!

Imagine the following scenario:

You publish a job advert for a salesperson, highlighting they would only be paid if they brought in business… Oh, and they must pay for their own CRM, data, tools, computer and desk. It may attract a certain type of applicant (a character from Glengarry Glenross or The Wolf of Wall Street maybe?), but for agency new business looking to develop long-term, ethical client relationships and growth, it’s very unlikely to be the right type of applicant.

It’s akin to hiring a gardener with all the kit, equipment, expertise and knowledge, and then refusing to pay them when there’s a hard frost and the tulips don’t bloom in spring! As is the case for a new business partner, not everything is in their control.

For years we have heard agency disgruntlement at unpaid pitching. Businesses and marketing departments literally asking for free thinking, ideas and work. Quite rightly, the agency community kicked-back on this and often now, clients tell us, “We will not pitch”. Asking a new business agency to work on a pure results basis is the equivalent.

Understanding the real value of outsourced business development is critical here. Only paying for meetings or wins fundamentally misunderstands the scale of what is being purchased from a supplier.

Why buying meetings is a misconception

When a creative, communications or marketing agency engages a specialist new business partner, it is easy to assume they are simply purchasing a number of meetings, demonstrations or, ultimately, new clients.

This is a fundamental misunderstanding of the service.

A specialist new business agency is not simply a meeting-booking service. It is an outsourced business development function, providing the people, expertise, intelligence, infrastructure, technology, framework and processes required to consistently identify, engage and develop commercial opportunities.

The meetings are one important outcome. But they are not the entirety of the value.

Asking to pay only when a meeting or client win occurs is effectively asking the new business partner to provide its entire operation, expertise and investment at its own financial risk, while the client retains the majority of the potential commercial upside.

What clients are actually buying

A credible new business agency provides a sophisticated combination of resources that would be very expensive, time-consuming and challenging for most agencies to replicate internally.

Data, intelligence, technology and a lot of time
Access to prospecting and intelligence platforms such as ZoomInfo and Lusha, CRM systems, campaign management software, contact verification, reporting tools and established prospect databases. These represent ongoing investment, irrespective of how many meetings are secured in a particular month.

Experienced people and collective knowledge
Skilled business development professionals who understand how to approach senior decision-makers, navigate gatekeepers, qualify genuine opportunities, handle objections and build relationships. Their accumulated experience across thousands of conversations is a valuable commercial asset.

Proven processes and campaign management
Proposition development, targeting strategy, campaign planning, outreach, follow-up, pipeline development, nurturing, performance analysis and continuous optimisation. This is a managed, ongoing business development programme, not a series of isolated transactions.

Track record, learning and market intelligence
Years of practical experience, tested methodologies and insight into what works, what doesn’t and why. Every meaningful prospect conversation can generate intelligence about buying cycles, competitors, budgets, future projects and market sentiment, even when an immediate meeting does not result.

None of these resources suddenly becomes free because a prospect declines a meeting or a client decides not to proceed.

Indeed, in challenging markets, more expertise, persistence, analysis and work may be required to deliver the same results.

Costs do not disappear when results fluctuate

A professional new business agency must pay salaries, employer National Insurance contributions, pensions, software subscriptions, data licences, training, management, office costs and other overheads.

These costs exist whether a campaign delivers two meetings or ten.

Consider a simple illustration:

A specialist new business agency allocates a team and resources costing £3,500 per month to service a client. In one month, the campaign delivers four qualified meetings. In another, due to slower decision-making, market conditions or prospect availability, it delivers one.

The agency’s cost base has not necessarily reduced. Its people have still worked, its systems have still operated, and valuable prospect intelligence and future pipeline will still have been created.

Ask yourself what is most valuable:
• 3 meetings
• 3 meetings PLUS a further 10 prospects, due to be contacted in the next few months, PLUS a further 15-20 qualified, but longer-term prospects now in the pipeline for nurture

Under a pure payment-on-results model, the supplier absorbs almost all the short-term financial volatility, including risks outside its control. At the same time the client expects experienced, properly trained and motivated people to represent their brands professionally.

Asking for a premium, fully resourced service while only agreeing to pay for isolated outcomes would not be a viable business model for suppliers in any industry.

Would creative and marketing agencies accept the same arrangement?

Perhaps the most compelling argument is to turn the proposition around.

Would the agencies requesting pure payment on results accept an equivalent arrangement from their own clients?

A creative agency would not ordinarily expect to employ its strategists, designers, copywriters and account directors for months, then receive nothing because the client’s sales did not increase.

A film production company would not reasonably be expected to fund directors, camera operators, editors, equipment and production costs, only to be paid if the finished film generated a particular commercial return.

And a PR agency would rightly argue that securing coverage is influenced by editorial decisions, news agendas and market circumstances beyond its complete control.

Like other professional services, business development requires investment in the work, not merely payment for the final outcome.

What results are influenced by factors outside the new business agency’s control?

New business agencies can control the quality of their targeting, messaging, outreach, persistence, qualification and campaign management.

They cannot entirely control:

• Whether a prospect has an immediate requirement, available budget or an appropriate buying window.
• Whether the client’s proposition is sufficiently differentiated, competitive or attractive.
• Whether the client’s credentials, pricing or reputation resonate with prospective buyers.
• How effectively the client conducts meetings, follows up, produces proposals or converts opportunities.
• Whether external economic conditions, procurement restrictions or internal decision-making delay opportunities.

This becomes particularly important when remuneration is linked to client wins rather than qualified meetings.

A new business agency might identify the right prospect, reach the correct decision-maker, uncover a live opportunity and arrange an excellent meeting. If the client subsequently delivers a weak pitch, takes three weeks to follow up or prices itself out of contention, does it seem reasonable the new business agency receives nothing for their work?

Equally, a campaign may develop a substantial pipeline of opportunities that convert six or twelve months later.

Pure results-based remuneration can fail to recognise the value created during that development period.

The hidden danger

There is another important consideration.

If an agency is paid exclusively per meeting, the commercial incentive can shift towards generating meeting volume rather than building a high-quality, sustainable new business pipeline.

That risks encouraging poorly qualified appointments, premature meetings and overly aggressive approaches that could damage the client’s reputation.

Similarly, payment exclusively on client wins can incentivise a focus on easier, smaller, short-term opportunities at the expense of strategically important prospects with longer buying cycles.

A properly structured retained relationship allows the new business partner to prioritise the right prospects, nurture longer-term opportunities, challenge the client’s proposition and protect the client’s brand.

The objective should be commercially valuable new business, not simply the cheapest possible meeting.

Accountability is critical, but that is not the same as accepting all the risk

None of this suggests that new business agencies should be paid regardless of their performance.

Clients are absolutely entitled to expect transparency, agreed objectives, measurable activity, qualified opportunities, regular reporting and continuous improvement.

Indeed, a specialist agency should welcome this scrutiny.

However, there is an important distinction between being accountable for delivering a professional, effective service and guaranteeing commercial outcomes that neither party can fully control.

There may be circumstances where pure performance-based arrangements work, particularly with highly standardised, high-volume lead generation. But they are rarely an appropriate default for complex, consultative, relationship-led business development.

Appreciate the Value

When an agency engages a specialist new business partner, it is investing in much more than the next meeting.

It is buying an established business development engine, experienced people, specialist knowledge, sophisticated technology, proven processes, commercial intelligence, structured campaign management and the ability to build relationships with future customers.

It is also purchasing something that is often overlooked. The time, cost and risk avoided by not having to build, recruit, train and manage that capability internally.

A new business agency should be expected to demonstrate value, improve performance and deliver meaningful commercial opportunities.

And from a client perspective, you should always carry out your own due diligence before appointing one. Ask for references, look at case studies to show how they have worked on similar propositions before, meet the team, etc. This should provide some level of reassurance, as you will be investing a significant amount of your own time and money into the process to ensure success.

You pay for the professional expertise, resources and work required to create the opportunity. You measure success through the outcomes that follow. The two are connected, but they are not the same thing.

This is why the new business journey should be valued as much as the destination!