Performance vs Retainer: Which Agency Model Actually Works?
Most healthcare practices get burned by retainer agencies. Here's an honest breakdown of both models. The incentives, the risks, and which one is actually designed to make you money.
Retainer agencies charge $2,000–$5,000/month whether they deliver results or not. Performance-based agencies earn only when you close consultations. That aligns incentives perfectly. For healthcare practices with unproven campaigns, performance-based is lower financial risk. Retainer can make sense only if you have verified ROI data.
- ✓Retainer model: $2,000–$5,000/month fixed cost regardless of results. Agency is incentivized to retain you, not deliver ROI.
- ✓Performance model: No hidden fees for surgical, $1,500 setup for non-surgical. Agency earns only on results.
- ✓Incentive alignment: performance agencies have financial motivation to optimize aggressively, retainer agencies don't
- ✓Risk: retainer = guaranteed cost. Performance = guaranteed accountability
- ✓Retainer makes sense when: you have verified ROI history and want predictable costs at scale
- ✓Performance makes sense when: starting new campaigns, trying a new vertical, or burned by previous agencies
The Retainer Model
The traditional agency model: you pay $2,000–$5,000/month regardless of results. The agency's incentive is to retain you as a client. Not necessarily to generate the best results. Their growth comes from signing more clients, not from improving yours.
This creates a misalignment. The agency has already captured revenue before opening Google Ads. Whether they put in 10 hours or 2 hours this month, the invoice is the same.
The Performance Model
Under a performance model, the agency's income is tied directly to your revenue. If you don't get consultations, they don't get paid. This creates perfect alignment: we're obsessively optimizing because our revenue depends on yours.
At VortiHQ, this means we optimize daily. We run more tests. We respond faster to performance drops. Because a slow month for you is a slow month for us.
The Hidden Costs of Retainers
- You pay during onboarding months with zero results
- Poor performers are rarely fired. They just send monthly reports.
- Junior account managers handle your $5K/month campaign
- Agencies lock you in 6-12 month contracts to protect retainer income
- No guarantee of any minimum results
When Performance Models Work Best
Performance models work when the average case value is high enough to make the math work for both sides. For a plastic surgeon where each consultation could lead to a $10,000 procedure, the performance fee on that consultation is a fraction of the value. For a $50 massage booking, the economics don't work the same way.
Healthcare and aesthetics are perfectly suited to performance models because of high case values, clear conversion events (consultation booked), and the ability to attribute leads directly to ad campaigns.
Work on a Performance Basis
We specialize in healthcare Google Ads. Custom pricing discussed when you close more deals. Book a strategy call to learn more.
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