When you're ready to hire an outbound agency, one of your first decisions is how to structure payment. Should you pay for performance (only when you get results)? Or commit to a monthly retainer regardless of outcomes?
Both pricing models have advocates. Performance-based pricing promises accountability and "skin in the game." Monthly retainers offer stability and partnership. Each approach works in some situations and fails in others.
The right choice depends on your specific situation: your offering, market, budget, timeline, risk tolerance, and business goals. There's no universal "best" pricing model, only the best model for your circumstances.
This guide will help you understand:
By the end, you'll have a simple framework for making your pricing model decision. This post is comprehensive. Grab some coffee and a snack, and let's dive in.
Performance-based pricing means the agency gets paid based on specific, measurable outcomes (not hours worked or time invested). The most common structure is pay-per-meeting, where you pay $300-$500 per qualified meeting booked. Some agencies use revenue share (10-20% of closed deal value) or pure performance deals with zero upfront payment.
Monthly retainer pricing means the agency receives a fixed monthly payment regardless of short-term results. This payment covers their time, expertise, infrastructure, and ongoing optimization. Full-service outbound typically runs $5k-$15k per month, with proven agencies often charging at the higher end. Some agencies offer tiered packages, hourly billing with monthly caps, or annual contracts with quarterly payments.
Before diving into specific trade-offs, you need to understand the landscape: 90-95% of performance-based outbound partnerships fail. It's a dramatic failure rate that might catch you off guard, especially if you're drawn to the mitigated cash risk that comes with paying only for performance.
When you choose performance-based pricing, you're not just preserving cash. You're entering a model where the overwhelming majority of partnerships fizzle out with nothing to show for it (no meetings, no pipeline, and often no useful insights about what went wrong).
This guide will help you make two decisions: First, whether performance-based or monthly retainer pricing fits your specific situation. Second, if performance-based pricing is your better choice, how to maximize your odds of being in that rare 5-10% of partnerships that actually succeed.
With that context, let's examine the key trade-offs.
To make these trade-offs concrete, we'll use two examples throughout this section:
Performance-based example: You pay $400 per qualified meeting booked. Nothing upfront, no monthly commitment.
Monthly retainer example: You pay $6,000 per month for a 6-month commitment ($36,000 total).
Performance-based pricing ($400/meeting): You pay nothing until results arrive. Zero meetings means $0. Five meetings means $2,000. Fifty meetings means $20,000. Your financial risk in any given month is tied directly to performance.
Monthly retainer ($6k/month for 6 months): You're committing $36,000 regardless of outcomes. Whether the agency books 0 meetings or 50 meetings in month 1, you pay the same $6,000. Your financial risk is $36,000 regardless of performance.
Performance-based pricing ($400/meeting): Your costs scale linearly with success. Month 1 with 5 meetings costs $2,000. Month 6 with 50 meetings costs $20,000. As the agency gets better at booking meetings, you pay proportionally more. Your upside is capped.
Monthly retainer ($6k/month): Your cost per meeting drops dramatically as performance improves. One month with 10 meetings equals $600 per meeting. One month with 50 meetings equals $120 per meeting (same $6k payment). The performance improvement flows directly to your bottom line. Your upside is uncapped.
Performance-based pricing ($400/meeting): You're selecting from agencies that are new and unproven. Proven agencies won't offer performance-based pricing because they have surplus demand for their services, so performance-based pricing is most available with unproven agencies and freelancers.
Monthly retainer ($6k/month): Established agencies with case studies, refined processes, and successful clients require retainers. You pay a higher fixed cost for proven expertise.
Important note: This doesn't mean every agency or freelancer accepting performance pricing will fail you. Every proven agency started as a new agency. If history repeats itself, 5-10% of performance-based outbound partnerships will be successful. If you choose the right emerging agency or freelancer, you could capture the upside while mitigating downside risk.
Performance-based pricing ($400/meeting): Agencies prioritize paying clients. When you're paying $0/month unless meetings convert, you become lower priority. As one agency owner admitted: "If they're paying me only when I perform, I don't really have an incentive to get back to you quickly. I can wait three weeks and get you this information because, you know, you'll still be there in three weeks."
Monthly retainer ($6k/month): You're buying immediate prioritization. Questions get answered sooner, and campaigns get launched sooner. You can even yell at your agency if you're frustrated with them, and they're more likely to rush to make you happy.
Performance-based pricing ($400/meeting): Agencies or freelancers can't afford significant upfront investment in your outbound infrastructure on a performance-based pricing model. They use free or cheap data sources, minimal email infrastructure, no testing budget, and basic tools. One agency with performance-based pricing said: "I'm not willing to use email waterfalls and better available tools because my clients aren't paying for them upfront," resulting in poor deliverability and campaign failure.
Monthly retainer ($6k/month): Guaranteed monthly revenue allows agencies to invest in premium deliverability, multiple data sources, A/B testing systems, and backup redundancies. As one agency put it: "I'm coming in with the firepower of several SDRs, and data science, and growth engineering, because my clients pay a flat monthly retainer."
Outbound is never perfectly smooth. Every motion hits inevitable rough patches:
The way your outbound partner handles these periods of adversity varies by pricing model.
Performance-based pricing ($400/meeting): When adversity hits your outbound motion, they don't push through the adversity. Most performance-based partnerships dissolve at the first stretch of adversity.
Monthly retainer ($6k/month): The agency continues earning regardless of short-term fluctuations, so they're motivated to diagnose problems, adjust strategy, and optimize through adversity. Guaranteed payment creates space for experimentation, testing, and the patience required to work through challenging periods.
Performance-based pricing ($400/meeting): When campaigns fail under performance-based arrangements, the poor execution quality makes it difficult to extract actionable insights. With minimal infrastructure, low prioritization, and inadequate testing, you can't tell if your offer was wrong, your ICP was off, or the agency simply didn't execute properly.
As one practitioner described it: "You've wasted 3-6 months with zero knowledge gained. You're back to square one with no data to inform your next move. The agency can blame your product; you can blame their execution; nobody learns anything."
You didn't spend much money on the failed experiment, but you also learned nothing.
Monthly retainer ($6k/month, $36k total): Proper execution creates useful data regardless of outcomes. When well-structured campaigns with good infrastructure fail, you learn concrete things: "Our ICP was too broad," "Our offer messaging needs work," "Our follow-up process is broken," or "This vertical doesn't respond to outbound." The higher execution floor means failures provide actionable feedback.
You invested $36,000 to learn those lessons.
Performance-based pricing ($400/meeting): "We only pay for results" sounds inherently lower-risk to cofounders, CEOs, finance leaders, and conservative stakeholders. When you need sign-off from people who don't fully understand outbound, performance-based pricing is an easier sell.
The actual value delivered is lower due to all the trade-offs above (worse agencies, slower execution, poor infrastructure, transactional relationships).
Monthly retainer ($6k/month, $36k commitment): "We're committing $36,000 for 6 months" requires more internal selling and stakeholder buy-in. But the actual value delivered is higher: better agencies, faster execution, proper infrastructure, and strategic partnerships.
The choice is simpler than it appears.
Choose performance-based pricing if cost savings is your absolute top priority.
Given that 90-95% of performance-based outbound partnerships fail, you should only choose this model when:
The trade-off you're accepting: You're trading your time for cost savings. You'll move slower, get less prioritization, work with less experienced partners, and likely fail with no useful feedback. But you'll preserve cash, and that alone is often worth performance-based pricing.
Choose monthly retainer pricing in virtually every other situation.
Specifically, choose monthly retainers when:
The trade-off you're accepting: You're trading higher upfront financial risk for faster execution, better agencies, proper infrastructure, strategic partnership, and useful learning even if campaigns fail. You're buying speed and quality while reducing execution risk.
.png){kind=small}