How it is used in a coaching business
Coaching businesses are used to performance pricing on the front end. Closers work on commission, appointment setters are paid per booked call, and some lead vendors are paid per result. On the back end the norm is still hourly help or a monthly retainer, which means the people running delivery get paid the same whether clients stay or leave. Performance-based pricing moves the back end onto the same footing as sales.
| Model | How the provider is paid | Who carries the risk |
|---|---|---|
| Hourly | Per hour worked | The coaching business |
| Flat retainer | Fixed monthly fee | The coaching business |
| Build fee plus retainer | Setup fee, then a fixed monthly fee | Mostly the coaching business |
| Guarantee-backed retainer | Fixed fee, refunded if a target is missed | Shared |
| Revenue share on retention and resells | A percentage of what stays and what is sold again | The provider |
The obvious question is what stops a provider on revenue share from pushing clients into offers they do not need. The answer is that resells only happen when clients get results, and a refund reverses the revenue. Fees tied to results on the back end is only sustainable when the client success rate is real.
