Jesse Pujji explains when to use performance-based pricing: only for large deals where you're confident you'll win. He turned down a $250k audit but would take a $2 million deal. His rule comes from Red Ventures: be like Floyd Mayweather, never take a fight you can't win.
A lot of our projects to date have been fixed fee, but we've toyed with the idea of a percentage of the value that we're delivering. Is it a fixed fee that you've found more success in?
Have you toyed with percent of value? The short answer is yes, I have. And I've done every version of this you could possibly imagine. I do think in my experience, oftentimes there's a ton of brain damage that comes alongside it. Would I do a performance-based deal for Aux today? Sure. If there was $2 million on the line, I would do it in a second. If there's a $250,000 audit, no thanks. One of the lessons learned from Red Ventures, like they would always say, be like Floyd Mayweather. You never take on a fight you can't win. And so the business basically changes where not only do you have to build even more pipeline because you're going to start saying no to people, but if you don't know exactly how you can be successful before you say yet, you don't take it. You say, no, you guys are too good at this. We actually can't add value here. We're not going to work with you.
