The performance guarantee.

It sounds like the perfect solution, right? A risk-free way to get the results you need. But is it too good to be true?

We were recently working with a potential customer who was hesitant to pull the trigger on a new website and digital marketing campaign.

Her request seemed fair: a 100% guarantee that her traffic would double within 90 days. After all, business is a formula—money in, results out. The pressure to deliver is a privilege, and we love the opportunity to make a real impact.

But there’s a hidden problem with this kind of guarantee that I want to unwrap today, and explain why your agency's promise might actually be dangerous for your business.

Don't Ask a Barber If You Need a Haircut

My dad always taught me that you should never ask a barber if you need a haircut. The same is often true for companies in the digital marketing space.

They’ll say, "Of course, we can fix your website! Just pay the deposit here, and we'll get started."

When you make that switch, you take on most of the risk. The agency knows whether their program is likely to work, but you don't. If things go wrong, it’s your business that feels the impact. While there’s inherent risk in any partnership, the goal should always be to build a mutually beneficial, long-term relationship, not just a short-term transaction.

To reduce this risk for the client, agencies often introduce a performance guarantee, like "we'll double your online leads, or it's free!" But this can introduce misaligned incentives that create more problems than they solve. If you're considering an agency with a guarantee, here are three things you need to get right to ensure it’s set up for long-term success.

3 Ways to Make Guarantees Work for You

A guarantee can be a powerful tool, but only if it's structured correctly. Here’s what to look out for.

1. Ensure the Timeline Matches the Goal

They say if you show me the incentives, I'll show you the outcome. If your agency is laser-focused on a short-term performance metric while you’re building for the long term, you have a serious misalignment.

In our customer's example, the tactics and strategies required to double traffic in 90 days might not be the best ones to sustain and grow that traffic over 12 months or five years. Sure, you might hit that initial milestone, but what about the bigger picture? A short-term traffic boost from a giveaway or a viral stunt might look great on a report, but it doesn't build a sustainable foundation. Having traffic that is 10x higher in five years is far more valuable than a temporary 2x spike in 90 days.

2. Get Crystal Clear on the Variables

Businesses are complex systems. As they grow, so does the complexity. Countless variables influence outcomes, including the industry, timing, product/ service, ads, sales skills, deliver... the list is almost endless.

An agency can run the best Google Ads campaign in the world, but if the product doesn't deliver on its promises, the business won't succeed.

That's why a guarantee should be focused only on things the agency can directly control.

This could include metrics like website page speed, on-page conversion rates, or project delivery timelines. These are things you can truly hold their feet to the fire on, ensuring they can deliver on their promise without pointing fingers at variables outside their control.

3. Align on the Magic Formula (LTV:CAC)

It still amazes me how many businesses invest in digital marketing without truly understanding their unit economics—specifically, the ratio of Customer Lifetime Value (LTV) to Customer Acquisition Cost (CAC).

If you know a customer is worth $2,000 over their lifetime and it currently costs you $500 to acquire them through existing channels, you have a clear benchmark for success. You can go to an agency and say, "If we invest $5,000 into this new strategy, you need to bring back at least 10 customers for it to be worthwhile. Otherwise, we’re better off sticking with what already works."

This "magic formula" removes ambiguity and gives both you and the agency a precise, shared definition of what a win looks like. It transforms the conversation from vague promises to a clear, data-driven objective.

The point is that a performance guarantee can be very powerful for setting clear expectations and sharing some of the initial risk.

It can be a great way to start a relationship. But never forget the bigger goal: building a mutually successful, long-term partnership that drives sustainable growth for your business.