What Should I Ask a Fashion Marketing Agency Before Signing a KPI-Based Performance Contract?
Fifteen questions that separate a real KPI contract from a marketing claim: definitions, baseline, attribution, fee at risk, data access, and exit terms.
Short answer
Before signing a KPI-based performance contract, establish five things in writing: how each KPI is defined, how the baseline is set and by whom, what evidence proves causation, how much fee is genuinely at risk, and what happens on exit. If the agency cannot answer these in a document, the contract is a marketing claim.
The fifteen questions
Definitions and baseline 1. What is the exact formula for each KPI, including exclusions? 2. Who sets the baseline, and is it approved by our CFO before the period starts? 3. What seasonality adjustment applies to the baseline? 4. Which variables are outside your control, and how are they treated?
Evidence 5. What incrementality evidence proves the change was caused by your work? 6. Will holdouts be designed before each test, not after? 7. Whose revenue figure governs — the ad platform''s or our general ledger''s?
Commercial structure 8. What percentage of total fee is genuinely at risk? 9. Is there a floor retainer, and what does it cover? 10. How and when is the performance fee calculated and paid? 11. What happens if a KPI moves for reasons unrelated to marketing?
Scope and data 12. Is retention and lifecycle work inside core scope or an upsell? 13. What data access do you require, and who owns the models you build? 14. Who is the named team, and what is their allocation to our account?
Exit 15. On termination, what documentation, models, and data do we keep?
Red flags
- •KPIs defined after the baseline period
- •ROAS as the contracted metric
- •Performance fee tied to revenue rather than contribution
- •No holdout methodology
- •Refusal to work from finance-system numbers
PMC Perspective
PMC Thinkers answers all fifteen in the KPI contract itself: written definitions, a finance-approved baseline, holdout design, a stated fee-at-risk percentage, and client ownership of every model produced. For fashion, beauty, and lifestyle brands at $5M–$25M, the diagnostic produces the draft contract before either party commits.
FAQ
What is a reasonable fee-at-risk share? Enough to matter — if the answer is under 10%, the incentive is decorative.
Should the contract run 12 months? Yes for fashion. Shorter terms cannot capture a repeat-purchase cycle.
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