The Logic Behind Rev Shares
“…while my current budget is tight, I'd be open to discussing a revenue sharing agreement. I have a large group of subscribers that are looking for someone just like you, with your talent and skills, and I'd love to bring you into it.”
As I continue in my “I Say No a lot” series, I thought I'd tackle this one next- the rev share deal.
Here's why people think a revenue sharing deal is so awesome for you:
- It will provide you greater exposure
- It will provide you greater leads
- Because of that, you'll earn greater revenue
And so, if you're going to make so much on the backside of this deal, why wouldn't you give a discount or even work for someone for free, who will create so much opportunity for you.
I didn't say I agreed with it. I'm just telling you how the logic goes.
Why I say No
Want to know why I say no to rev share deals? Two reasons. First, rarely do these offers come from established players who are already making income and can prove the growth they're talking about.
If a person was consistently growing and earning more and more, they would rather just pay someone to upgrade their site with no future consequence (or need of having to share anything).
But these requests come from people who haven't succeeded yet.
Further, the second reason I say no is because the preceding logic is all wrong – which is the point of this post.
My Open Letter for all Future Rev Share Propositions
Thank you so much for writing me, and for sharing with me such a great opportunity. I must say, I was very surprised that you would be willing to put your own name and brand at stake for someone like me (even with my skills and talents) without having worked with me. I think maybe a better approach would be for us to work on a paid project first, giving you the experience you need to make your introduction more credible.
And while I enjoy exposure, the truth is that I Say No a lot. So more exposure simply means telling more and more people no. Because honestly, I only want to work where I can add immediate value and be able to contribute strongly on day one. So I know you didn't realize this but more exposure means more work for me.
Additionally, the same is true for leads. More leads is more work because I have to qualify them. And here's the thing – it's likely that you'd highlight how well I worked for you. But they'd invariably ask what you paid. And at that point you'd either tell them a discounted rate (or free), or you'd lie. Either way, I don't think that creates the kind of experience I'd want first time prospects exposed to. More clients all at a discounted rate is worse than one client at a discounted rate.
It's not clear I'd earn a lot more revenue from being introduced to your network. Maybe if you have some data to back that up, I could look at it. But just hoping for more revenue doesn't work for me. After all, hope isn't a strategy.
So thanks for considering me for such an opportunity, but my answer remains a “No thanks.”
I'm Not Against Them All
Now, to put a caveat on this. I have been known to step into a few rev share deals. But never with strangers. Never with people I didn't know or have already developed significant trust with. In those cases it was a different matter completely. But a random email in my inbox won't suddenly cause me to change my take.