Find the exact moment your marketing company gets paid. Whatever happens at that moment is the thing they are being paid to produce. Everything after it is goodwill.
That sounds cynical. It isn't meant to be. Good people work at agencies billed every way there is, and plenty of them do more than they're paid for. But if you want to predict what an agency will spend its Tuesday on, look at what triggers the invoice, not at what's written in the proposal. The proposal describes intentions. The billing trigger describes the business.
There are four common triggers in this industry and they sit at different points along the same chain:
Somebody clicks → somebody fills in a form → somebody books a class → somebody walks in → somebody enrols.
A retainer gets paid at the start of the chain. Pay-per-lead gets paid at the form. Pay-per-booking gets paid at the calendar. Pay-per-show gets paid at your front door. Nobody in this industry gets paid at the last link. More on why that matters below.
The retainer
You pay a fixed amount monthly. The agency is paid the same whether you enrol thirty students or none.
The honest case for it is that it funds real work. Someone can spend a month rebuilding your creative, or sit out a bad January without panicking, because their rent doesn't depend on this month's numbers. Retainers are how serious strategic work gets paid for in most industries.
The problem is specific: a retainer converts your growth into someone else's fixed income, and fixed income has no upside in trying harder. The agency's best month and worst month pay the same. What a retainer does reward is keeping you subscribed, which is a different skill from filling your mat, and it is usually practised through reporting rather than results.
One owner described the pattern from the inside, writing to another owner who'd asked him for a recommendation:
"A lot of other companies we have used made us sign a 6 month contract. Unfortunately, we never saw results and wasted so much money. They would always say we need to give it time but that is just to lock you in financially (personal oppinion)."
A school owner, in an email to another owner. Source:
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Note that he flags it as his own opinion, and that's the right way to read it. Sometimes an agency genuinely does need time. The trouble with "give it time" is that nothing can disprove it. It's exactly what you'd say if you needed another three months, and exactly what you'd say if you had nothing. A six-month contract is a bet, and the reason to notice it is that you're the only one placing it.
Pay per lead
You pay per form fill, per opt-in, per name and number. Now growth is in the agency's interest, which is a real improvement.
It just moves the incentive to volume of forms. And a form is cheap to produce badly. You can get the cost per lead down by widening the audience, by promising something the lead doesn't need to mean, or by putting the form in front of people who were half-watching a video. Every one of those makes the invoice look better and your week worse, because you're the one ringing the numbers.
That's the practical cost of per-lead billing, and it's rarely counted: your staff absorb the quality problem. Somebody at your desk spends their evening calling people who don't remember filling anything in. The agency's number is fine. Your front desk is doing unpaid quality control on it.
A school owner posted publicly about a lead-generation supplier he'd used before, comparing it to what he was getting elsewhere:
"Spent a ton of money for little to no results. They made me use an exel spreadsheet and there was no way to follow up with leads unless I checked my emails 24-7. Who has time for that?"
A school owner, in a public post. Source:
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The spreadsheet is the giveaway. Handing you raw leads in a file is the logical end point of being paid at the form: delivery is complete, and everything past it is your problem. The measurement stops exactly where the payment does.
To be fair to the model, per-lead billing works fine in industries where a lead is genuinely close to a sale and the buyer has a sales team built to work it. A martial arts school usually has neither. Your closer is often you, between classes.
Pay per booked appointment
One link further down. Payment triggers when someone is actually on your calendar for a trial class, which is a much higher bar than a name on a list. A booking means a real person picked a real time.
It's also where the gap most owners complain about opens up. Booked is not the same as present. Every school knows this and one owner said it plainly in the middle of recommending us, without being asked to:
"Please keep in mind that not every booked appointment will show. They dont with any of our other marketing as well so that is normal."
A school owner. Source:
t42.png
He's right, and his sentence stays here exactly as he wrote it, including "with any of our other marketing as well", because that's the part that stops it being a complaint about one supplier. Some people book with sincere intentions on Sunday and their week falls apart by Wednesday. No billing model abolishes that.
What per-booking billing does is put the consequence of it entirely on you. The invoice is settled the moment the slot is taken. Whether a body arrives is, commercially, none of the agency's business. In practice that shows up as reminders that stop after one text, and follow-up that ends when the appointment is made rather than when it's kept. We've written separately about what actually moves a show rate, and almost all of it happens in the days after the booking. That is exactly the window per-booking billing doesn't pay anyone to care about.
Pay per show
Payment triggers when a person is physically in your building. That's the model we run, so read this section knowing whose side it's written from.
What it changes is straightforward: the chase after the booking becomes the supplier's problem, because the supplier hasn't earned anything until it works. Reminders, reschedules, the person who goes quiet on Thursday. That work now sits with whoever is paid at the door. And the incentive to pad volume disappears, because a form fill from someone who was never going to drive over is worth nothing to us.
Here's what it does not do. Better you read it now than find out in month two.
It doesn't enrol anybody. We're paid when they walk in. What happens in the next twenty minutes is entirely your building, your instructor, your desk. If your trial class is average, pay-per-show delivers people to watch an average trial class and you'll have paid for the privilege. The same owner above was clear about that too: "everyone who shows may not enroll in your school for one reason or another (cant afford it, or the schedule may not work, etc)."
It doesn't fix capacity. It sometimes makes capacity worse, quickly, which is a whole separate problem.
And it has its own bad incentive. If you're paid per show, you're rewarded for getting bodies through a door, not for getting the right bodies through it. The failure mode is people arriving who were never going to train: wrong age, wrong side of town, wrong price bracket. Test for it rather than take our word for it. The test is simple. Ask any pay-per-show supplier what proportion of shows enrol, and if they don't know, ask why not. We watch enrolment because a school that doesn't enrol anybody stops paying us within two months, but that's an alignment of interest rather than a promise, and alignment is the weaker of the two.
Nobody in this industry bills at enrolment, incidentally. You'll occasionally see it offered and it tends not to survive contact with reality, because the agency would be betting its revenue on your close rate, your pricing and whether your instructor was having a bad night. That's not a bet a supplier can price, which is why the chain of payment stops one link short of where you'd most like it to stop. Worth knowing so that "we get paid when you enrol" sets off the right alarm.
What to ask before you sign anything
Five questions. They take ten minutes and they're more informative than any case study, including ours.
- What exact event triggers your invoice? Make them name the moment. Click, form, booking, arrival. If the answer takes more than one sentence, that's the answer.
- What happens to my money if nobody walks through the door this month? Not "what's the guarantee". Guarantees are clauses, and clauses have conditions. Ask what the invoice says.
- Who does the follow-up between the enquiry and the class, and are they paid whether or not it works?
- What am I locked into, and what does the lock protect? Contracts aren't automatically bad. A supplier fronting real setup cost has a fair reason to want a term. But ask whose risk it moves. It moves yours to you.
- Whose ad budget is it, and whose account does it sit in? If the ads run in an account you can't see, you can't audit the cost of anything, and you can't take the data with you when you leave.
A last thing about the contract question, from the same owner:
"The great thing about Madscope is there is no contract and you can leave whenever you want. To me that spoke volumes because we had nothing to lose when we signed up."
A school owner. Source:
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That one flatters us and it's here anyway. The general point stands regardless of who you buy from: the supplier who most needs you locked in is the one telling you the most about their model.
Where we sit in this
Madscope is paid when a student walks into your school, and not before. You run your own ad budget in your own account. There's no contract, so if this month is bad you leave and we've earned nothing, which is the correct outcome for a bad month.
That structure doesn't make us good. It makes our bad months and your bad months the same months, which is the most you can honestly ask of a billing model. Everything else, whether the ads are any good and whether the follow-up is any good, you still have to judge on evidence.
Before you talk to anyone, including us, work out what one student is actually worth to you over their whole stay, because that number is what turns any of these prices into a yes or a no.
If you want ours against that number, book a 15-minute call.
Client quotes on this page are reproduced as written, from messages and posts sent by the owners concerned, and re-checked against the original screenshots. Source images: t41.png, t42.png. Nothing has been rounded, projected forward or tidied up, and no owner's caveat has been removed. The qualification about booked appointments not always showing is the owner's own, made unprompted, and it stays. Both quoted owners are anonymised here; the source material carries identifying details we have not reproduced. No industry statistic appears on this page. The descriptions of retainer, per-lead and per-booking billing are a general characterisation of how those models pay, not a claim about any named company.