- Every pricing model rewards the agency for something. Make sure it’s something you want.
- Percent of spend rewards bigger budgets. Pay per lead rewards volume.
- Per-appointment and revenue-share deals live or die on their definitions.
- Ask who owns the ad account, the pages, and the videos before you sign.
The five common models
Many agencies mix these, like a setup fee plus a retainer, or a smaller retainer plus a bonus per appointment. Break any proposal into its parts and look at what each part rewards.
- Monthly retainer: a set fee for an agreed scope of work
- Percent of ad spend: the fee rises and falls with your budget
- Pay per lead: a set price for each inquiry delivered
- Pay per appointment: a set price for each booked estimate
- Revenue share: a cut of the jobs that sign
Monthly retainer
A retainer pays for work: campaigns, creative, pages, follow-up, reporting. The cost is predictable, and the agency earns nothing extra by spending more of your money.
The risk runs the other way. A retainer pays the same whether results improve or stall, so the scope has to be specific. Ask what’s included each month, how often the ads get new creative, and which numbers you’ll see so you can tell whether the work is moving booked estimates.
Percent of ad spend
This model is common with agencies that mainly buy media. It’s simple, and it scales with the account: a bigger budget does take more managing.
The incentive is the problem. When the fee grows with your budget, raising spend is always good for the agency, even when your crew is booked out or the extra leads cost more than they’re worth. If you take this model, set a spend cap tied to the jobs you can handle and keep budget increases your call.
Pay per lead and pay per appointment
These feel safe because you only pay for results. The catch is what counts as a result. A lead might be any form fill, including wrong numbers and homes outside your area. An appointment might be any time slot, including homeowners who never show or were never a fit.
Pay per lead pushes toward volume, and cheap volume is easy to buy. Pay per appointment sits closer to what you want, but only if the definition covers your service area, the job types you do, and a homeowner who confirmed. Also ask whether the leads are yours alone or sold to other contractors too.
What to ask before you sign
The model matters less than the answers to these. A fair retainer with clear ownership beats a per-appointment deal where you can’t see the ads.
- What exactly does the fee cover each month?
- Is there a setup fee, and what does it build?
- How is ad spend billed, and can I log in to the ad account?
- Who owns the ad account, pages, videos, and lead data if we part ways?
- How long is the agreement, and how do I end it?
- Which numbers will you report, and how often?
