Commission-Only Lead Generation: How It Works and What to Check

Commission-only lead generation flips the usual arrangement. Instead of paying for leads or appointments up front and hoping they turn into jobs, you pay the lead provider a share of the revenue — or a set fee — only when a job closes. The provider carries most of the risk, so incentives line up: they only get paid when you do.

That alignment is real, but so are the details. Here's how these arrangements work and what to settle before you start.

How it works

1. The provider generates homeowners for you — leads, booked appointments, or both.
2. Your team runs the appointment and sells the job.
3. When a job closes, you pay the agreed commission or fee.
4. No close, no payment for that opportunity.

Because the provider is paid only on results, expect them to be selective about which trades, territories, and contractors they work with, and to want visibility into outcomes.

The terms that matter

What counts as "closed"

This is the most important definition in the agreement. Common options:

• Signed contract — simplest, but what if the homeowner cancels during a legal cancellation window?
• Contract past the cancellation period — fairer for both sides. See the Cooling-Off Rule guide.
• Deposit received or job completed — ties payment to cash, but delays it.

Also settle what happens if financing is declined or an insurance claim is denied after signing.

The commission base

Is the commission calculated on the full contract value, the value excluding taxes and permits, or collected revenue? What about change orders and upsells after the first sale? Write it down with an example calculation.

Attribution window

If a homeowner from the provider signs four months after the first appointment, does it count? Most agreements set a window. Too short and the provider loses deals they created; too long and you pay for sales your own follow-up won.

Verification

The provider needs a way to confirm outcomes: CRM access for their leads, copies of signed contracts, or periodic reconciliation. Agree on the method up front so it never becomes a question of trust.

Payment timing

When is commission due — at signing, at deposit, at completion? Line it up with your cash flow.

Benefits for contractors

• Low up-front risk. You're not paying for appointments that never sit or never close.
• Aligned incentives. The provider is motivated to send homeowners who buy, not just homeowners who answer.
• Easier testing. Trying a new channel or territory costs less when payment depends on results. Compare with other pricing models.

Trade-offs

• Higher cost per win. Because the provider absorbs failed opportunities, the commission on each sale is usually more than you'd pay per sale under other models with good conversion.
• Administrative work. Reporting outcomes accurately takes discipline.
• Disputes if definitions are vague.
• Selectivity. Providers may decline low-ticket work or markets where they can't make the economics work.

When commission-only fits best

• High-ticket projects with healthy margins — roofing, solar, HVAC replacement, windows, remodels
• Contractors with a consistent sales process and good CRM records
• Testing a new territory or service without a large commitment
• Teams that want to pay only for results while they learn a channel

To see whether the commission fits your margins, compare it with your break-even cost per lead and your current customer acquisition cost.

A short checklist before signing

• Definition of a close, including cancellations and financing fall-throughs
• Commission base with a worked example
• Attribution window
• How outcomes are reported and verified
• Payment timing
• What happens with leads that are invalid (wrong number, renter, outside the area)
• Contract length and how to end it

RunsForYou works on commission: if you don't close, we don't get paid. Our pricing page explains the model, and our terms cover the details.