Affiliate Marketing: Pay per Lead vs Pay per Sale
Pay per sale (PPS) Or Cost per sale (CPS) is a sect of affiliate marketing . It is simply a means through which online advertisements are priced in order to determine the rate at which a publisher should be paid according to sales made.
The advertiser only pays the affiliate once a purchase has been completed.
Pay per lead (PPL) is a program designed to pay the affiliate based on the conversion of leads such as a file download, trial offer sign-up or any other predetermined action.
Pay per Lead vs Pay per Sale: Which Is Better?
In this day and age, there are numerous kinds of affiliate marketing programs to promote your businesses.
The vastness of the internet literally broadens your horizons as far as marketing is concerned; exposing your products and services to a wider more diversified audience.
Due to this increase in potential customers within the internet superhighways, there is a wide variety of these affiliate marketing programs for your particular marketing wants and needs.
However, only two affiliate marketing programs stand out, the pay per sale and the pay per lead affiliate marketing programs.
Below we will discuss the differences between these two and how they compare to each other.
Difference between Pay per Lead and Pay per Sale
Now that you know what PPL and PPS are, how do you make the right choice? They are both means of marketing products /services online for the intention of familiarizing products to the public.
Pay per sale is a model that pays an affiliate exclusively for the sales qualified; for instance when a customer follows an affiliate link which leads to an advertiser and buys a product, the events leading up to the purchase will identify the affiliate who will then be paid an agreed amount of commission.
What is important to note here is that the affiliate will receive a high payment due to the low rate of conversion. Simply put, it takes a lot of convincing on the affiliates part in order to secure a sale.
Not all the visitors on a particular site follow through to the buying stage when they view an advertisement.
Alternatively, the pay per lead makes payments to the affiliate once a specified action has been fulfilled. It can be anything from signing up to a newsletter, a subscription, filling out an online form to downloading a file/program.
Here the customer also follows an affiliate link that directs them to the advertiser’s site. Once the action has been completed the affiliate earns a specified commission.
Pay per lead programs can only offer a small percentage of commission because they have a higher conversion rate.
Most of the customers who visit a site are more willing to fill in their details for a free download on a site than to pay cash for the same download.
Customers do not require any convincing to fill out a form or register for a free trial of given software. They will do it because it’s free.
This means that affiliates will receive a large amount of revenue in the long run. In the case of pay per lead programs, the commission is smaller compared to pay per sale programs.
Meanwhile, with good promotion methods, pay per lead affiliate programs can result in very high conversions. In turn, this will translate into big affiliate revenues.
To sum things up, the affiliate marketing that offers the largest marginal profit and pays the affiliate the most revenue is the (PPL) Pay per Lead affiliate program.
However, it is advisable to try both of them to determine what will suit all your particular needs.