# Selling Outcomes

## Outcome / Performance-Based (Success / Contingency / Gainshare)

**Definition (short).** You only get paid (or get most of your pay) if a predefined outcome is achieved—e.g., a hire is made, a lawsuit is won, a deal closes, a KPI target is hit. You trade certainty for upside: lower or zero base fees, larger “success fees” when you deliver.

**Recent example.** Contingent recruiters typically charge [15 – 25 % of first-year salary](https://www.recruiterslineup.com/contingency-recruiting-fee-structure/?utm_source=chatgpt.com) only if the candidate is hired (e.g., $20 k on a $100 k role). Personal-injury lawyers in the U.S. commonly take [30 – 40 % of the award](https://www.americanbar.org/groups/legal_services/milvets/aba_home_front/information_center/working_with_lawyer/fees_and_expenses/?utm_source=chatgpt.com) on a “no win, no fee” basis. Investment banks collect “success fees” of [\~ 1 % on mid-market M\&A deals](https://firstpagesage.com/business/ma-advisory-fee-structure/?utm_source=chatgpt.com), falling as deal size rises. Performance marketing/affiliate programs pay only on conversion or sale.

**Historical example.** Real-estate brokers since the late 19th century have been paid a [5 – 6 % commission on sale price](https://www.investopedia.com/articles/active-trading/031215/how-real-estate-agent-and-broker-fees-work.asp?utm_source=chatgpt.com) (split between buyer and seller agents). Maritime “no cure, no pay” salvage contracts go back centuries: salvors only get paid if they save the ship or cargo ([Lloyd’s Open Form](https://en.wikipedia.org/wiki/Lloyd's_Open_Form?utm_source=chatgpt.com)).

<figure><img src="https://3709841693-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FCeRlmJf2y704TpjpubE1%2Fuploads%2FUouU7zkMwPAF7fKJjNMp%2Fimage.png?alt=media&#x26;token=3f0a7308-70ff-422d-900d-77d85bbc9231" alt=""><figcaption></figcaption></figure>

#### KPI Definitions

**Expected Value per Engagement (EVPE).**\
\&#xNAN;*Pseudo:* `EVPE = (Success_Rate * Fee_per_Success) − Cost_per_Opportunity`.\
\&#xNAN;*Why it matters:* A CEO needs to know if the portfolio of bets is positive EV; high EVPE means your pricing and screening compensate for failures.\
\&#xNAN;*Benchmark:* A healthy contingency recruiter might target [EVPE ≥ 2× direct delivery cost per search](https://www.recruiterslineup.com/contingency-recruiting-fee-structure/?utm_source=chatgpt.com), given \~25 % fill rates and 20 % fees.

**Success Rate % (SR).**\
\&#xNAN;*Pseudo:* `SR = Successful_Engagements / Total_Engagements * 100`.\
\&#xNAN;*Why it matters:* Low SR means wasted effort; high SR indicates strong screening or execution.\
\&#xNAN;*Benchmark:* Contingent recruiters report [20 – 30 % fill rates](https://www.recruiterslineup.com/contingency-recruiting-fee-structure/?utm_source=chatgpt.com); plaintiff lawyers often claim [60 – 90 % win/settle rates](https://www.americanbar.org/groups/legal_services/milvets/aba_home_front/information_center/working_with_lawyer/fees_and_expenses/?utm_source=chatgpt.com).

**Average Fee per Success (FPS).**\
\&#xNAN;*Pseudo:* `FPS = Total_Success_Fees / Successful_Engagements`.\
\&#xNAN;*Why it matters:* Together with SR it defines revenue potential; larger FPS can offset lower SR.\
\&#xNAN;*Benchmark:* Recruiting: [15 – 25 % of first-year salary](https://www.recruiterslineup.com/contingency-recruiting-fee-structure/?utm_source=chatgpt.com). M\&A advisory: [\~ 1 % on mid-sized deals](https://firstpagesage.com/business/ma-advisory-fee-structure/?utm_source=chatgpt.com). Legal contingency: [30 – 40 % of settlement](https://www.americanbar.org/groups/legal_services/milvets/aba_home_front/information_center/working_with_lawyer/fees_and_expenses/?utm_source=chatgpt.com).

**Cost per Opportunity Closed (COC).**\
\&#xNAN;*Pseudo:* `COC = (Sales + Delivery Costs for that Engagement)`.\
\&#xNAN;*Why it matters:* If COC creeps up, your EV per engagement shrinks; it’s the denominator for pricing.\
\&#xNAN;*Benchmark:* Top recruiters keep delivery cost [< 25 % of expected fee](https://www.recruiterslineup.com/contingency-recruiting-fee-structure/?utm_source=chatgpt.com).

**Total Opportunities Undertaken (OPP).**\
\&#xNAN;*Pseudo:* `COUNT(engagements_started)`.\
\&#xNAN;*Why it matters:* Volume drives total revenue potential but can dilute focus and SR if you take weak deals.\
\&#xNAN;*Benchmark:* A single recruiter handling [5 – 10 searches at once](https://www.recruiterslineup.com/contingency-recruiting-fee-structure/?utm_source=chatgpt.com) is typical.

**Average Cycle Time to Outcome (CT).**\
\&#xNAN;*Pseudo:* `mean(end_date − start_date)`.\
\&#xNAN;*Why it matters:* Long cycles tie up resources and delay cash. Faster cycles improve annualized EV.\
\&#xNAN;*Benchmark:* Recruiters aim [30 – 60 days to fill](https://www.recruiterslineup.com/contingency-recruiting-fee-structure/?utm_source=chatgpt.com).

**Client Value Delivered $ (VAL).**\
\&#xNAN;*Pseudo:* `Σ client_value_metric`.\
\&#xNAN;*Why it matters:* Validates fee size and proves ROI; helps negotiate better splits.\
\&#xNAN;*Benchmark:* Gainshare consulting commonly takes [10 – 30 % of measured savings](https://firstpagesage.com/business/ma-advisory-fee-structure/?utm_source=chatgpt.com).

**Provider % of Value (Split %) (SPLIT).**\
\&#xNAN;*Pseudo:* `Fee_per_Success / Client_Value * 100`.\
\&#xNAN;*Why it matters:* Ensures pricing aligns with delivered value; too low = leaving money on table; too high = client pushback.\
\&#xNAN;*Benchmark:* Typical splits: [10 – 30 % for gainshare consulting](https://firstpagesage.com/business/ma-advisory-fee-structure/?utm_source=chatgpt.com), [\~ 5 – 6 % realtor commission](https://www.investopedia.com/articles/active-trading/031215/how-real-estate-agent-and-broker-fees-work.asp?utm_source=chatgpt.com).

**Acquisition & Delivery Cost / Opportunity (ACQCost).**\
\&#xNAN;*Pseudo:* `Total_S&M + Delivery_Pre-fee / Opportunities`.\
\&#xNAN;*Why it matters:* This feeds the EVPE equation; if ACQCost rises faster than FPS or SR, your economics deteriorate.\
\&#xNAN;*Benchmark:* Growth-stage firms watch that ACQCost stays [< 50 % of EVPE](https://www.sage.com/en-us/-/media/files/sagedotcom/master/gated-assets/intacct/whitepapers/2023-professional-services-maturity-benchmark.pdf?utm_source=chatgpt.com).

**Risk Screening Score (RISK).**\
\&#xNAN;*Pseudo:* `score = f(evidence_strength, client_commitment, precedent, achievable_value)`\
\&#xNAN;*Why it matters:* Good screening improves SR and EVPE; bad screening floods pipeline with losers.\
\&#xNAN;*Benchmark:* Top contingency firms accept only [< 10 % of inbound PI cases](https://www.americanbar.org/groups/legal_services/milvets/aba_home_front/information_center/working_with_lawyer/fees_and_expenses/?utm_source=chatgpt.com).

**Qualified Pipeline % (PIPE).**\
\&#xNAN;*Pseudo:* `Qualified_Opps / Total_Opps * 100`.\
\&#xNAN;*Why it matters:* Focused pipelines save cost and maintain SR.\
\&#xNAN;*Benchmark:* Many high-end firms keep [\~ 30 – 50 % of inbound leads](https://www.recruiterslineup.com/contingency-recruiting-fee-structure/?utm_source=chatgpt.com).

**Work-in-Progress Load (WIP).**\
\&#xNAN;*Pseudo:* `COUNT(active_engagements)` or `Σ hours_in_progress`.\
\&#xNAN;*Why it matters:* WIP must match team capacity; overload reduces SR and elongates CT.\
\&#xNAN;*Benchmark:* Recruiters handle [5 – 10 live searches](https://www.recruiterslineup.com/contingency-recruiting-fee-structure/?utm_source=chatgpt.com).

**Client ROI Multiple (ROIc).**\
\&#xNAN;*Pseudo:* `Client_Value / Fee_Paid`.\
\&#xNAN;*Why it matters:* A solid ROI story justifies your fee structure and helps renewals/referrals.\
\&#xNAN;*Benchmark:* Gainshare deals often promise [3 – 10× client ROI](https://firstpagesage.com/business/ma-advisory-fee-structure/?utm_source=chatgpt.com).

**Cap / Floor Clauses % (CAP).**\
\&#xNAN;*Pseudo:* `Deals_with_cap_or_floor / Total_Deals * 100`.\
\&#xNAN;*Why it matters:* Caps can limit upside; floors protect downside—balance both.\
\&#xNAN;*Benchmark:* Recruiters often have [minimum flat fees (\~$10 k)](https://www.recruiterslineup.com/contingency-recruiting-fee-structure/?utm_source=chatgpt.com).

**Top-5 Clients Revenue Concentration % (CONC) (aux).**\
\&#xNAN;*Pseudo:* `Rev_top5 / Total_Rev * 100`.\
\&#xNAN;*Why it matters:* A whale leaving can crush EVPE and SR.\
\&#xNAN;*Benchmark:* Aim for [< 50 %](https://www.sage.com/en-us/-/media/files/sagedotcom/master/gated-assets/intacct/whitepapers/2023-professional-services-maturity-benchmark.pdf?utm_source=chatgpt.com).