The report came in and everything on it was pointing the right way: reach up, clicks up, cost per lead down a bit on last month. Then you walk onto the floor at twenty past five on Tuesday and your beginners class has the same nine kids in it that it had in September.
Nothing on that report was a lie. It measured the part of the job that happens before your front door and then stopped.
What is performance based marketing?
Being paid for a result rather than for the month. An ad platform will do it at the level of a single click: Google Ads Help describes cost-per-click bidding as meaning that "you pay for each click on your ads", while on Display campaigns it says you can "choose to pay for conversions, rather than clicks or interactions", and that "paying for conversions means you only pay when customers convert on your website or app". Same idea, two very different things to be charged for. So the question to put to anybody selling you performance is: performance at what?
A conversion is not a fixed thing either. In Google Ads it is whatever the person who set up the account identified as valuable, and Google's help page on conversion measurement says so to the advertiser directly: "You choose what you identify as valuable, like a purchase, sign-up, or phone call." Their glossary says the same, defining a key event as "an action that's counted when someone interacts with your ad or free product listing (for example, clicks a text ad or views a video ad) and then takes an action that you've defined as valuable to your business", and adding that a conversion "covers clicks, purchases and every type of conversion which has been already defined as a conversion".
So when a report hands you a column of conversions, ask which action is sitting in that column.
The other rows are honest about themselves once you look up the definitions. An impression "is counted each time your ad is shown on a search result page or other site on the Google Network". Clickthrough rate, which gets shortened to CTR, is "the number of clicks that your ad receives divided by the number of times your ad is shown".
What does a performance marketing agency report on?
The reports owners show us are mostly activity: impressions, clicks, clickthrough rate, cost per lead, and a conversion count resting on whichever action was ticked when the account was built. When the numbers look fine and the mat looks the same, the sentence you get back is usually some version of "give it more time".
Owners who come to us after an agency describe one of two experiences. The first is activity without outcomes, which creates anxiety. You check everything, you question every lead, you wonder whether the ads are working at all, and you feel like you need a call every few days to stay sane. The second is harder to spot because it arrives dressed as success: one month works, the next doesn't, results look good and then fall off. A lot of martial arts school owners don't get burned by bad marketing. They get burned by inconsistency.
What number should I judge my marketing company on?
We tell owners to count one thing: how many prospective students physically walked into the school this month, class by class.
Keep it by class rather than as a total. A school can take a decent number of new kids in a month and still have an empty Saturday morning, and a single figure hides it.
Lead cost is where we would push back. A low lead cost with no students behind it is a reason to cut that ad rather than celebrate it, and the figure worth deciding on is the overall cost of getting a student to show up and enrol. The other side of it is what a student is worth to you over the time they stay. For that, read what a martial arts student is actually worth.
Send this to your marketing company this week
Hi [name]. Can I get three things in the next report, alongside what you already send?
1. How many families booked a trial last month, and how many of them actually walked in.
2. The same two numbers for the two months before that, so I can see whether it is steady.
3. Which ad or audience the ones who walked in came from, so we keep that one running.
I will send you back who enrolled and who was not a fit, so you can act on it.
We keep those rows whether a school asks for them or not, because we're paid when a student walks in and nothing else would tell us the ads are doing their job.
How do I know if my marketing agency is working?
We'd look at three months rather than one. A strong month can happen to anybody, and three in a row is something you can hire a second instructor on the back of. The way Neil puts it to owners: you stop asking whether that campaign worked and start asking whether you can depend on it to grow your school.
What can't a marketing company be judged on?
The part of this that happens inside your building.
Online, everything can be tracked. Offline, nobody can see who really walked in. We can't see that the family who arrived on Wednesday had no intention of paying your tuition, or that the dad who loved the class has a son already doing two other sports. You can. If the wrong families are coming through the door and nobody tells us, we see arrivals and assume it's going well. That is why what you send back matters as much as the ads do. For what to send, read booked, showed, enrolled.
The first class is yours as well, along with the desk, the offer and the enrolment conversation. We find the families, get them booked and remind them to come. You welcome them, run a great first class, and enrol them.
Where we sit in this
Madscope is performance-based in the narrow sense of the word. No retainer, no contract, and we're paid when a student walks in. We also bring you a booking rather than a lead, which means the family has chosen a class time before you hear their name.
Being paid that way changes what we watch. There's no month in hand for us if a campaign is producing nothing, so ads and audiences that don't get students get switched off and the ones that do get copied into other accounts. For the mechanics of how it is billed, read pay per show martial arts marketing, and then pay per lead vs pay per show.
Two more questions are worth asking anybody, and neither is about reports. Do they charge you monthly regardless of results, and if they do, why? Ask how many of the schools they signed up last year are still with them, because a company whose schools stay is a company whose schools were happy with the results. How to judge a martial arts marketing agency before you sign has the rest of them.
The thing to do Monday
Start with the number itself: students who walked through your door last month, class by class, counted off your own diary rather than anybody's dashboard. Then send your marketer the message above and see how fast it comes back.
If you'd rather have that number reported to you every month without asking, book fifteen minutes with us and bring your timetable and the spaces you could genuinely fill. If we do not think we can fill them, we will say so on the call.
Questions owners ask
What is performance based marketing?
It is any arrangement where the marketing company is paid for a result rather than for the month. The result can be a click, a form fill, a booked appointment or a customer through your door, and the differences between those are enormous. Before you compare prices, get the company to name the exact event it charges for.
What does a performance marketing agency report on?
Usually impressions, clicks, clickthrough rate, cost per lead, and a count of whatever action was set up as a conversion in the ad account. All of that is real, and all of it happens before your front door. Ask for bookings, shows and enrolments beside it, because those are the only rows that describe your business.
How do I know if my marketing agency is working?
Count the families who physically walked into your school for a trial this month, class by class, and compare it with the month before and the month before that. One good month is luck. Three in a row is a system you can plan around. If your marketer cannot tell you that number, ask why not.
Is performance based marketing worth it for a small business?
It is worth it when the result being paid for is the result you actually want, and when you can handle what arrives. A school with room in its beginners classes and someone to welcome a new family gets far more out of it than a school with a full timetable. Sort the second thing first.