What are pay for performance and AI agency ideas?

TL;DR

Pay for performance agencies are highlighted as scalable, low capex models where payment is tied to results, such as per customer or per lead. AI customer service and AI agent platforms are projected to cut costs and increase throughput, while smart contracts could formalize performance-based payments. The conversation also notes industry focus and branding strategies for high CPA opportunities.

Transcript

have you seen retail AI for sure you have when I did the demo last week like they were setting up like a dental appointment I would try to you know throw it off like it was perfect I was like imagine if you can build this at scale now they can take the call with the lead they can then set up the next call and then also the lead might say oh I need ... Read More

Key Insights

• Pay for performance agencies can scale by focusing on one industry, testing multiple brands, and charging only on proven conversions, which reduces client risk and increases potential margins. The model can extend to telecoms, crypto, hotels, and other high CPA sectors, with underwritten opportunities and strategic branding.
• AI agents for retail and customer service can handle calls, rescheduling, and lead qualification at scale, enabling faster response and higher conversion rates, which creates a strong ROI for clients willing to share profits or savings.
• A value-based approach may outperform mere cost savings, suggesting charging for additional customers or revenue increases rather than just reducing expenses, and using upfront fees to ensure client commitment and cash flow stability.
• Smart contracts could formalize performance payments, with funds held in escrow and released upon hitting predefined metrics, creating transparency and reducing disputes in agency-client relationships.
• Branding and landing pages tailored to specific industries help capture higher CPA buyers, enabling rapid testing of new markets without long-term commitments.
• Pay for performance CRO agencies exist and can take a percentage of improved revenue or conversions, operating as contingency-based transformations that align incentives with client success.
• The future of AI in agencies includes built-out AI transformation teams and service offerings that combine performance marketing with automation and data-driven decision making, expanding potential service lines at scale
• More videos from this channel:
  • How to generate high traffic startup ideas that sell
  • How to Master Claude Code for Beginners Quickly
  • How to build an AI voice character app quickly
• More from this channel: Greg Isenberg

Questions & Answers

Q: A real search query question about the video (e.g. 'How to...', 'What is...', 'Why does...', 'When should...'). Question 1

Pay for performance agencies are presented as scalable with low upfront costs because the client only pays when results are achieved, such as generating a lead or customer. The model works by testing multiple brands and industry targets, then refining the offering to maximize conversion rates and return on ad spend. This approach reduces risk for clients while expanding the service provider’s upside through performance-based fees and potential profit sharing.

Q: What is a pay for performance agency according to the video

A pay for performance agency focuses on delivering measurable outcomes for clients and being compensated based on results rather than services rendered. Examples include finance, telecom, and hospitality sectors with high customer acquisition costs. The model often centers on testing traffic, optimizing copy and strategy, and sometimes using a portfolio of brands to protect against client churn while scaling performance across industries.

Q: How could AI agents transform customer service according to the discussion

AI agents can handle initial interactions, schedule calls, reschedule appointments, and even assist in closing the deal by guiding conversations. The potential comes from scaling these agents to manage millions of chats with increased speed and accuracy, which reduces human labor costs and allows agents to focus on higher-value tasks. Companies with large customer service teams could see meaningful cost savings.

Q: What role do smart contracts play in these agency ideas

Smart contracts are described as a way to automate payments based on performance, with escrow holding funds until predefined metrics are met. This reduces the need for trust between parties and provides transparency, ensuring both sides adhere to agreed targets. Adoption could start with savings-based arrangements and mature into value-based performance agreements as confidence grows.

Q: What industries are named as promising targets for pay for performance

Industries with high customer acquisition costs and willingness to pay for performance are highlighted, including finance, crypto, hotels, and telecoms. The idea is to create branded landing pages for each industry, drive traffic to those pages, and run tests to identify high-ROI opportunities. Focusing on specific verticals improves targeting and increases the chance of profitable engagements.

Q: What branding strategy is suggested for launching multiple brands

The speakers suggest creating several brands or landing pages to test different markets, such as California or Florida hotel groups, so that if one partner fails, others can continue to operate with minimal disruption. This approach allows rapid iteration across multiple verticals and reduces dependency on any single client while expanding the potential addressable market.

Q: What is the potential advantage of charging a percentage of savings vs revenue

Charging a percentage of savings aligns incentives with the client because the agency’s earnings rise as the client reduces costs. However, the discussion also notes the value of capturing more significant upside by targeting additional revenue or customers and suggests mixing upfront fees with performance-based components to secure early engagement while maintaining long-term upside.

Q: What is the suggested progression for integrating performance-based models

Start with a base fees approach to establish commitment and mitigate non-payment risk, then add performance-based elements contingent on clear metrics. Over time, move toward value-based arrangements that charge for additional customers or revenue, and consider escalating to smart contracts for automated, transparent payments. This staged approach reduces risk while expanding potential earnings for both sides.

Summary & Key Takeaways

• The discussion presents pay for performance agencies as scalable with potential profit shared models and minimal upfront costs, especially when focusing on high CPA industries and niche branding to outperform traditional advertising. The idea emphasizes performance-based contracts and the value of underwritten opportunities in data-rich markets.

• AI enabled customer service is explored as a way to reduce cost per interaction and speed up response times. The conversation suggests targeting large firms with sizable support teams, and charging based on performance or upfront value, while considering smart contracts for transparent, automatic payments.

• Smart contracts are identified as a future mechanism to automate, verify, and enforce performance payments, reducing reliance on third parties and increasing trust between agency and client. The speakers suggest a staged adoption starting with savings-based models, then moving to value-based performance.