Your Marketer Wasn't in the Room When They Signed

A software founder asked on Reddit whether anyone had ever made a profit-share deal work with a marketing agency, where the agency takes a slice of the money instead of charging a fee. His wording was plain: "instead of paying them upfront, they take a cut of whatever revenue comes in?"

One of the answers didn't bother being gentle.

"Marketers don't work on commission. No one worth working with will entertain this."

If you've ever thought about asking your marketing company to take a percentage of the memberships it brings you instead of a fee, that's the same idea, and you'll hit the same wall. The reason they give is also the reason to be careful what you wish for.

Why a cut of tuition sounds like the fairest deal

Look at the alternative. Retail Insider, a Canadian retail trade publication, opens its guide to commission pricing with the line every owner recognises: "Most marketing agencies get paid whether your revenue goes up or down."

That's what owners are really reacting to. So the question to put to anyone charging that way is simple enough. Do they charge monthly fees, and if so, are they afraid to put their money where their mouth is? A company that's happy to be paid for results doesn't need asking twice.

The other half of the complaint is quieter. Agencies are good at producing activity. Clicks, views, forms, a dashboard with a line going up. Activity that never turns into students makes an owner twitchy, and the tell is when the only answer to "how's it going" is "give it more time". Neil's line for it: owners don't get burned by bad marketing, they get burned by not being able to depend on it.

So the instinct behind "take a percentage of what you bring me" is right. The only question is where the invoice sits.

Why won't a marketer work on commission?

The reason is the same one we give for charging per show rather than per enrolment: they don't control the part you want to pay for.

Elise Oras, a marketing strategist who has worked with dozens of tech companies, turned down an outcome-only proposal and wrote up the reasons on the Wheels Up Collective blog. The first was ownership. "Agencies Don't Own the Entire Funnel." They don't control your software, your follow-up or your sales team. "Even when they build beautiful campaigns and deliver highly-qualified leads, there's a massive gap if your sales team isn't enabled, resourced, or aligned." The second reason was attribution, which is just the job of working out which ad produced which customer: it's never exact, so "the full story of 'what worked' often gets lost".

A commenter in an r/advertising thread on the same question was blunter. "I've tried working on a commission basis as an independent before, and trust me, it sucks. Sometimes things don't work out for reasons that aren't your own, and then you've done a TON of work for nothing. Attribution alone can be a killer."

Then he gave the example, and it's the one to hold on to:

"I was supposed to take a fixed share for every appointment scheduled where they'd heard of the business through social. Come to find out, reception wasn't even handing out the paperwork that asked that."

He did the early mornings, the late nights and the weekends. His pay rested on a receptionist remembering to hand somebody a piece of paper, and she didn't.

Now put your school in that story. The receptionist is your front desk on a Tuesday evening, with a full mat, two parents waiting and the phone going. The paperwork is whatever note decides which new white belt gets credited to the ads. Nobody's lying to anybody. The information just never reaches the person whose income depends on it.

Who actually decides an enrolment at your school?

Walk the steps from the ad to the signature and put a name against each one.

Picking who sees the ad, writing it, answering the enquiry fast, getting a class time chosen, confirming it, reminding the family the day before, chasing the ones who went quiet. That's all the marketer's work, and every bit of it happens before anybody arrives. Then the family walks in. From that moment it's your instructor, your mat, your front desk, your timetable and the way your offer gets put. The line we use is deliberately short. We find the families, get them booked and remind them to come. You welcome them, run a great first class, and enrol them.

That second half isn't a formality. Enrolling is a process you run, the same sort of process as getting an enquiry to book and show up, one step further down. You try to enrol on the first day, whatever trial they walked in on, because the first class is peak excitement and it fades within days. You add to the offer they came in with instead of swapping it for a different one, so the decision takes no thinking about. Owners who do that enrol more of the same families than owners who say "try your free weeks and see how you go". The day-one enrolment offer and what happens between the trial and the signature are both yours, start to finish.

Which is the trouble with a cut of tuition. Two schools can run the same ads to the same sort of families in towns the same size and finish the month with different numbers of new students, because of what happened on the mat and at the desk. A percentage of tuition prices your marketer's work using your enrolment rate. Tighten up your first class and their cheque goes up, and they did nothing. Lose your best instructor and their cheque goes down, and they did nothing then either.

What is the cut calculated on, and when does it stop?

The small print matters more than the percentage here. Retail Insider is blunt about it: "the headline commission rate tells you very little on its own. How performance is measured, attributed, and calculated can matter just as much as the percentage itself."

Three things need pinning down before a percentage means anything.

What counts as theirs. Siblings of students you already teach, the family who heard about you at the school gate, the parent who drove past your sign for a year and finally came in. Do they trigger a commission? If every new enrolment counts, you're paying a share of your own referrals and your own good name.

What the baseline is. Working out what you'd have enrolled anyway, across your quiet months and your busy ones, is nobody's idea of a nice evening, and it has to be settled before the deal starts rather than argued over afterwards.

When the cut stops. We tell owners to judge marketing on what a student is worth over the whole time they stay, which is usually a good deal longer than a month. A percentage of that, for as long as it runs, is a very different animal from a one-off fee. Retail Insider puts the exit terms last on its checklist and doesn't soften them: the notice period, the termination process "and what could happen with outstanding commissions or results that are produced very near the end or beginning of the partnership should be discussed on both sides".

One marketer in that Reddit thread had a dry note on how these conversations tend to finish. "I have pitched a commission structure to a few prospects before. Turns out when they figure out how much commission checks would be they decided the retainers aren't as expensive as they'd originally thought."

What a commission deal makes you hand over

The part owners rarely picture is the plumbing. Retail Insider's conclusion names it: the agency "needs enough control over the areas affecting the measured outcome, while both sides need access to the data used to calculate performance."

Take that sentence as a school owner. A marketer in the profit-share thread spelled out what a careful version of the deal needs: pay "only on paid recurring revenue they sourced that survives 2+ billing cycles", track every sale by channel, cap the percentage, and take the commission back off the agency if a family refunds or quits.

Picture that in your school. We would need to see what every family paid you and whether they kept paying, month after month, and we would be having a conversation with you about which of them was ours. You wanted a cleaner deal and you've bought yourself an accounts meeting.

There is feedback your marketer genuinely needs from inside the building, and it's nothing like that. Online, everything can be tracked. Offline, nobody can see who really walked in. If the wrong families keep arriving and nobody says so, the ads look like they're working beautifully from the outside, so the targeting never gets fixed. Telling us who showed up, who enrolled and who was never going to be a fit is what sharpens the next round of ads. It costs you nothing, and it isn't an invoice. If you want the format, there's a short list of the numbers worth sending your marketing company.

Where we sit

No retainer, no contract, and we're paid when a student walks in. Not for a click, not for a form, not for a booking that never turned up. Nobody is charged for a pause either.

That's the last step we control, which is why the invoice sits there. Everything up to your front door is ours: the targeting, the ad, contacting every enquiry, getting a class time chosen, the reminders and the chasing of the ones who don't book. We also bring you a booking rather than a lead, which means the family has chosen a class time before you hear their name. There's no month in hand for us if nothing's happening, so we watch the numbers and keep testing. What happens after the door is yours, so we don't bill for it. Pay per show martial arts marketing is the version of your instinct that survives a Tuesday evening, and the difference between paying per lead and paying per show is the same argument one step earlier.

While you're asking anyone about pricing, ask the other question Neil puts to every agency, ours included: what's your client retention? A company whose schools stay another year is a company whose schools got what they came for.

What to do Monday

Open a blank page. Write the steps from ad to signed membership down the left, and who controls each one down the right. By the end of it you'll know exactly where somebody else's invoice should stop.

Then, if you want the version where the result is a family standing in your lobby in their socks, bring your timetable to a call and tell us how many spaces you could genuinely take this month. If we don't think we can fill them, we'll say so on the call.

Questions owners ask

Will a marketing agency work on commission?

Most won't, and the reason they give is worth hearing. They don't control the part of the job that produces the sale. One freelance marketer was promised a share of every appointment where the patient said they'd heard of the practice through social media, then found the receptionist wasn't handing out the form that asked the question. Pay at the last step your supplier controls and that whole problem disappears.

Is commission-based marketing a good idea for a small business?

It depends on whether the result being paid for is one your supplier can actually produce and you can both see. A click, an enquiry, a booked appointment or somebody turning up are all things a marketer moves. A signature at the end of a conversation in your building isn't. The closer the paid result sits to their own work, the less there is to argue about later.

Why don't marketing agencies charge per sale?

Because the sale usually depends on people they've never met. Retail Insider, a Canadian retail trade publication, lands on the same point in its guide to commission pricing: the agency needs enough control over whatever is being measured, and both sides need to see the data behind the figure. In a martial arts school that data is your billing system, which is a lot to hand over for a pricing structure.

What is pay per enrolment marketing?

An arrangement where your marketing company bills you only when a new student signs up, either as a set amount or a share of what they pay you. It sounds tighter than paying per enquiry, and it is, but it moves the invoice past your front door into a conversation your marketer can't see. That's where the arguments start.