One of the things that impressed me the most since I founded GamePlan is the amount of executives and companies that ask us to provide services versus a payment based on revenue share.
GamePlan is a consultancy that provides Business Intelligence, Diagnostics and Strategies, and has a business unit focused on PR and Branded Content for the game industry. None of these services are traditionally bound to the revenue share business model.
Revenue share is an interesting way to get revenue, of course, given that you have a standard, steady service gateway (like an e-commerce, or a billing system) where you simply provide your client with a solution that is commoditized, and require minimum to non maintenance, since probably most of it is algorithm based.
GamePlan provides the exact opposite of that. Our services are fully customized, each report, spreadsheet, planning, execution, everything. More, a big chunk of what we provide is access to decision-making networking, and how to be prepared to close business in a fast, more effective, ROI oriented mode.
Interesting enough, in this last four years sending out literally hundreds of proposals, a vast majority of our prospects answer to them by either saying we are “too expensive”, which I strongly disagree, given the current pricing average of consultant hours both in Brazil and abroad, summed to the level of quality of what we deliver – but that can be discussed, negotiated, it’s part of the process. But what bugs me the most is the also high percentage of executives that request proposals (where whenever I can I try to be very clear about the “no revenue share” policy) and later reply saying that they want to enter into a revenue share agreement anyway. This, for me, is truly mind-boggling.
“If I win, we all win”
“If you trust your services so much, you shouldn’t be afraid to assume the risk of this operation”
“We don’t have the budget” (for a financial proposal we just asked you to prepare)
“I hear you saying it was OK to work with revenue share” (where we obviously didn’t)
These are some of the things we hear on an everyday basis. The one that really gets the prize if when we get a very detailed briefing, we deliver a proposal delivering on that very specific briefing, and then we hear that “this is not what we were looking for”.
So, why we are so resistant to this business model? Well, here are some of the reasons:
– we do have a fixed operational cost (OMG really, you DO have a company then);
– we have bills to pay (yep, crazy stuff, right?);
– intelligence, planning and networking are among the most expensive assets one institution can share with another (specially if customized to the other party’s needs);
– we don’t have an investor, or are an accelerator (who would be willing to assume risk in exchange of a long tail chance of making big bucks);
– the entrepreneurship ecosystem in Brazil is very expensive;
– we sum decades of acquired knowledge about how things work, and we expect to be compensated to share it in detail with you;
There are more reasons, I could spend a long time listing them, but I want to get to the bottom of this rationale.
When you request us, as consultants and media experts, to work on a revenue share model with your company, you are actually asking us to deliver our most expensive assets in exchange for actually internalizing YOUR business risk (that you already signed for when opened your company or became an accountable employee), with no guarantee that we will get anything in return (that’s why we are consulting for you and doing your communications, right)?
My best guess is that you want to hire us because you want US to use our accumulated experience and resources to actually improve your results in the first place (since I assume you had some challenges to achieve those yourself – no problem here – hiring an external view to your business is probably the best investment there are).
So this is my logic blockage: if your business need external help to improve, why should we become “investors” of it by working in advance for free to see results later? Our mission is pretty clear: be an amazing resource to improve your business and communication results. We solve things faster, with a highly skilled and seasoned team, and you invest a fair share of resources to get “that” fixed and collect the improved results.
So, before asking GamePlan to work for revenue share, I just ask this of you: ask why GamePlan should invest in something you already declared as a challenge when asking a proposal from us in the first place.
Think about it. I already have. We will always deliver amazing intelligence, analytics, strategy, branded content and press relations, for a fair retainer (or, if you are really promising, we may think a bit about engaging a mixed model).
Oh, and by the way, just to reinforce, we don’t work for revenue share.