Performance bonus

What it means

An additional payment triggered by hitting an agreed outcome. Leads over a threshold, revenue attributed to the channel, sometimes a ranking position. It sits on top of a reduced base, or on top of a full one where the agency has the stronger hand.

The mechanism is only as good as the measurement underneath it. A bonus on attributed leads pays out on whatever the attribution model counts, and the agency usually owns the attribution model.

Why it matters in HVAC

The trade has a specific distortion here. A bonus on lead volume rewards quantity, and HVAC lead quality varies enormously: a price-shopper for a capacitor and a homeowner pricing a full system replacement both count as one lead and differ by four figures in value.

Tie the bonus to booked revenue and the distortion reverses. Now the agency is exposed to your close rate and your dispatch, which it does not control, and it will price that risk into the base.

How to check it

Ask three things: what the trigger is, which system measures it, and who can change the definition mid-term. If the agency owns the tracking, the reporting and the definition, the bonus is being marked by the people sitting the exam.

Why quality has to be in the definition

Plumbing & HVAC SEO publishes a worked model on its pricing page using a contractor at roughly $4,000 in fees with $3,000 of media, and a $50 blended cost per lead, which is around 140 leads a month. At a sixty percent close rate on a $600 average ticket that is near $50,000 in revenue.

A volume-triggered bonus on that account pays on the 140. A revenue-triggered one pays on the $50,000, and the gap between them is your close rate and your average ticket, neither of which the agency touches.

They also name where the model breaks: the leads do not arrive, or nobody answers the phone. Being explicit that the second failure is yours is the right way to write a bonus, because it decides in advance whose fault a bad month is.