Pay per lead, sometimes misconstrued as cost per acquisition, and sometimes also referred to as cost per action, is a cost-based online marketing measurement and pricing methodology, referring to a specific action – such as purchasing a certain kind of lead – that determines the monetary value of that action. The action can be any one of several different actions. Some marketers purchase leads at their own cost; some conduct direct mail campaigns that cost them money; and others rely on other methods, such as sales letters and telemarketing calls, or sales of affiliate products. When a marketer purchases a “lead” the marketer pays the person who provided that lead a fee for their information. This act of “leading” someone to take a certain action is referred to as Pay Per Lead.
The concept of pay per lead is simple enough. Marketers acquire leads by any of the methods mentioned above and then pay the person who provided the lead a fee for their information. In doing so, marketers are presenting a way to generate new business for them, while providing direct access to those interested in the specific business opportunity. But how do they do this, and what are the factors that go into determining the price per lead?
There are many factors that go into determining the price of a Pay Per Lead product. Most importantly, however, are two things that are not always considered. First, it depends upon what type of action the marketer takes once they get a lead. Second, it also depends upon how well the marketer plans on keeping those leads. If you don’t keep the leads and make no efforts to convert them into sales, you won’t get paid for your leads.
Some agencies set their prices based on the number of leads an agency has accumulated. Others base their fees on the amount of effort they plan to put into each campaign. Still, others allow anyone who wants to be inbound marketing a pay per lead service the option of working independently or with an inbound marketing agency. Whatever the case, though, most agencies agree that the best way to provide a service is through a combination of cost for each lead and effort to generate new leads.
A good way to determine whether or not you will be paid for each lead is to determine whether or not you will be getting the best service from your PPL service. Does your PPL agency have an established reputation? Is the agency known for staying ahead of the game in terms of new strategies and methods? Are they constantly bringing up new strategies to attract qualified leads? If your answer to these questions is “No”, you may want to look elsewhere. There are plenty of companies that offer the same types of services as your agency, but are less expensive and not known for staying abreast of new developments.
You should also consider whether or not your potential PPL provider offers a pay per lead basis. Most agencies do, but many will only pay a fee for a qualified lead only. This means that if you sign up with your inbound agency but the lead doesn’t convert, you’ll only get a payment for the initial contact. Many agencies that offer pay per lead basis, however, will compensate their clients for any attempts they make to convert. By using these tips, you can easily determine if your potential pay per lead provider has the qualities you need to help you grow your business.