From time to time, we receive requests from both domestic and international clients asking if we can structure our web marketing contracts on a performance-based (success fee) model. At first glance, this kind of setup sounds appealing because it allows for larger rewards when things go extremely well. However, we generally decline such arrangements for several reasons.
First, performance-based contracts often make the responsibility boundaries unclear. Our main work is SEO, web advertising, and digital marketing—activities focused on attracting and engaging potential customers. What we don’t handle directly are sales activities or the actual selling of products.
On the other hand, clients sometimes assume that by outsourcing marketing to us, they’ve also outsourced their entire sales process. So when sales results don’t meet expectations, it’s easy for the responsibility to fall entirely on our side.
Marketing can bring customers to the door, but it cannot close the deal. Marketing and sales are fundamentally different roles, and combining them under one responsibility is extremely difficult. Even if we were to take on sales, it would require full-time dedication—something that can’t be done just a few days a week, since sales involves direct, ongoing interaction with customers.
Moreover, even if marketing and sales are both executed flawlessly, if the product or service itself doesn’t fit the Japanese market, success will still be limited. In some cases, the product itself needs improvement or localization. However, for an outside marketing partner like us, asking a client to make such changes is rarely simple or quick.
For these reasons, we believe that performance-based contracts in marketing require extreme caution. While they sound attractive in theory, in practice, the blurred lines of responsibility and uncontrollable factors make them a risky choice for both sides.
