ENGAGE BI THROUGH SIMPLE COMPENSATION OPTIONS

Put Our Experience To Work For Your Business

Potential clients are often curious about how we are compensated for our services. We created this page to cover some of the more popular ways we structure this part of our services agreement. In general, the most common arrangements are flat project fees or retainers for ongoing services with or without "pay-for-performance" incentive elements.

Flat fee analogies would be hiring a contractor to build an addition onto your home, a mechanic to restore a classic car or a Doctor for a specific surgery, etc. You pay these professionals a certain amount of money to do a well-defined task and they deliver on the contracted service for a flat fee. The big advantage to this form of compensation is that you know the total cost of their services right up front.

Retainer analogies would be hiring a lawyer, CPA or similar to work with you over an unknown period of time. Retainer arrangements are very similar to the salary relationship you have with your employees. In these scenarios, you are looking for ongoing professional services and thus you retain professional services by paying a regular (salary-like) fee. Again, the big advantage in this form of compensation is that you know the total monthly cost of services up front.

A typical pay-for-performance incentive variable for either structure would be a residual, which is just another term for commission. Some of our services that can directly impact revenues or profits are good candidates to optionally link performance of those services to the results they yield for your company. More simply, if you engage BI to help you grow sales you might reduce the fixed fee or retainer cost by adding a residual variable hooked to the resulting (BI-driven new) sales growth. In exchange for letting us share in the variable upside potential of our contributions, BI shares in more of the risk with you.

The big advantage to using an incentive variable is that you get the same quality of work for less fixed cost by letting us share in the potential rewards. If the project doesn't deliver in terms of whatever the residual is based upon (often revenues), then your total cost ends up lower than it would have been had you engaged BI for a fixed fee or fixed retainer arrangement. On the other hand, if the project does deliver, the downside(?) is that the total cost of BI compensation can be much greater than a flat fee or retainer arrangement.

Not all entrepreneurs consider the latter much of a downside because the only way we earn that potentially large commission is by putting a much larger amount of revenue in his or her company's coffers. Still, if you've been exposed to a scenario in which- say- a commissioned salesperson manages to make greater total comp than fixed salary executives, you understand the dynamics of pay-for-performance scenarios. As former presidents & VPs, we've been on your end of this equation many times before and were happy to write residual checks even into the millions when consultant contributions added tens of millions to our revenues. Whether you can be as content about that kind of scenario is a matter of personal choice.

Here's some general detail on the typical ways we are compensated...

1. Flat Project Fee
Some projects can be packaged as a self-contained task with a clearly defined beginning and end. For example, if you hired BI to help you:

• build a website: the end point would typically be when the website goes live online
• craft a strategic plan: the end point might be defined as the point at which the plan is completed
• review your sales or marketing model and provide actionable recommendations to improve it: delivery of those recommendations might mark the end of that project
• develop a website infomercial, radio or TV commercial or other forms of media-based promotional or educational content: a finished deliverable could conclude that project
• Etc. (this is not a comprehensive list- just some examples to illustrate the concept)

When the working relationship can be constructed with a clearly-defined end point, a flat project fee is a popular way to structure the engagement.

2. (Smaller) Flat Project Fee + Residual
In this variation of #1, BI does the same kind of work on the same kind of deliverable for a lower fixed fee. In exchange, BI shares in the upside on the deliverable for some mutually-beneficial period of time. Obviously, this kind of arrangement would only apply when the project is aimed at a deliverable(s) that can yield (typically) short-term revenues (on which the residual can be based). A few examples of this kind of project might include:

• a promotional piece, advertisement, direct response package, marketing or Emarketing campaign
• sales team training or sales model enhancements
• inside or outsourced telesales solution install
• new product development & launch, or an existing product evolution & relaunch
• Etc. (again, this is not a comprehensive list- just examples)

The key to this arrangement involves options where the outcome is objectively measurable (gross revenues, Ecommerce transactions, new customer acquisitions, subscription renewal revenues, sales of a new product, etc). The size of the flat project fee we seek is directly influenced by the challenge involved in accomplishing the objective to earn the residual, the variable to which the residual fee is tied and the objectivity with which that variable can be calculated. We welcome win:win structures.

3. Flat Fee Retainer
When the conclusion of an engagement is not as clearly defined (or open-ended by design), the most common way that consultants and contractors are paid is via flat fee retainer. This is often set up as a fixed fee to be paid biweekly or monthly (very much like paying valued employees their salary). Good examples of this would be outsourcing a function to BI such as marketing, Emarketing or telesales services, maintaining an ongoing, on-demand consultation-oriented or business-advisory relationship and so on. Odds are that you already have this kind of compensation relationship with other professionals with which you work (your CPA, legal firm, IT services, HR benefits vendor, etc).

4. (Smaller) Flat Fee Retainer + Residual
In this variation of #3, the flat fee retainer is reduced in exchange for BI getting to share in the upside potential of our deliverables or service. Like #2, the biggest key to forging this kind of arrangement is an objectively-measurable variable to which the residual portion of the fee can be linked. Often this would objective, quantitative variables like gross revenues, quantity of new customer acquisitions, etc. This kind of arrangement is similar to how you might pay a sales team with a salary + commission. The flat fee retainer is analogous to the salaries you pay those salespeople and the residual is analogous to the open-ended commissions they can earn.

5. Other "Creative" Options
Some prospective clients occasionally pitch other options. Popular ones are stock, stock options or various forms of a purely commission-based arrangements. In other words, these clients are asking BI to take on 100% of the risk of fully delivering on our part of a relationship in exchange for only a portion of the potential upside reward- or some future reward- should stock or stock options eventually be worthwhile to convert to cash. Yes, it would be terrific to get expertise in disciplines outside of sales to work solely for a share of some future upside but that's just not how capable, proven professionals outside of the sales profession tend to work.

Sometimes a prospective client pitches joint venture, "sweat equity" and similar arrangements as another way of asking non-sales professionals to deliver their expertise for only future potential. We are generally unable to consider such arrangements as co-ownership leads to obligations as owners that should take priority over the work we do for other clients (with which no such ownership arrangement exists). Such an arrangement could turn BI into a competitor of other clients which would likely alienate those relationships. We choose to run a kind of business that allows us to offer our talents & experience to many clients wanting to grow. We don't covet any such relationship alienation potential. If we wanted to co-own a business in some industry we serve, we would simply fold BI and start a dedicated enterprise as a full competitor... so that we could own 100% of the risk AND 100% of the reward that comes with ownership (rather than owning upwards of 100% of the risk but only a portion of the rewards in joint ventures and similar).

While we never completely rule out creative compensation arrangements we are generally NOT interested in those kinds of scenarios. Clients too quick to want to give away stock are generally exhibiting a lack of confidence in the future upside value potential of their enterprise; besides, grants of stock or stock options as sole compensation come with a present year tax liability (and the IRS wants to be paid in cash- not a smaller slice of a slice of future upside). Every business would like skilled talent outside of the sales profession to work hard for them solely on commission (we're also interested if YOU want to work that way for BI).

Bottom line: while we're open to considering alternative win:win compensation options, those that stray too far from #1 to #4 are generally unlikely to result in an engagement. If you would like to engage BI services but are somewhat pinched for cash, consider the option entitled "Engage BI for FREE" described in the left margin of this page.

How Big Innovations Works With You To Rapidly Grow Your Business

In all scenarios, BI generally operates like a master contractor with our fees paying for expertise, execution and valuable knowledge transfers involved in capitalizing on big growth-oriented innovations for your business. To deliver on your project best-in-class, we manage very talented subcontractor specialists as needed. This is analogous to hiring a master contractor to build you a home and him or her managing the expert subcontractors (plumber, electrician, carpenter, etc.) to get the job done for you. When- and only when- they need a plumber, they pull in a quality plumber to do that part of the task. When- and only when- they need the electrician, they pull them in to do that part. These dynamic engagements of quality specialists keep the overall cost low as you are not paying for such talent to be idle on staff awaiting their turn to do their parts. Instead, their costs are realized only when their deliverables are executed. When they complete their part of the whole job, their billings to you end. This is a very efficient way to accomplish any business tasks as opposed to the sometimes idle full-time staff model.

BI works like that. For example, if we are engaged to help with a marketing campaign, one of our core team members (one of the 4 people pictured at the top of the page) will be your master contractor equivalent. We may then pull in specialized "best of" talent such as copywriters, layout artists, list specialists, landing page programmers, videographers, etc to do the specific parts involved in a great marketing campaign. If we are engaged to build up to a whole website the master contractor will plan out the website with you then tap expert programmers to code the speced-out website. If you need a strategic plan we may pull in expert accounting talent for the financials, research talent to conduct market research and so on. Etc. Such as-needed engagements keep our costs low while delivering very high quality specialists to work on your projects or campaigns. This maximizes (your) bang for the bucks.

Clients desiring to directly interact with the subcontractors can do so- even pay for their services directly- or they can keep it simple and work through the dedicated point person at BI who manages all such variables for them. The latter should be very similar to working with the manager of one of your departments and having them handle the nitty-gritty with their reports to get the team jobs done. Either way, we would welcome the opportunity to help your business grow and construct a win:win compensation arrangement that best fits your goals and unique situation. We are extraordinarily cost competitive for the quality, experience, attention to detail and comprehensive solutions we bring to each opportunity. FREE consultation