Pay-per-lead affiliate programs offer revenue each time you refer a potential customer to a merchant, while pay-per-sale affiliate programs only offer a payout when a sale is made. Each type of programs has its own benefits and these may be more suited to certain monetization strategies than others.
Many major affiliate networks, such as ShareASale or Commission Junction, offer pay-per-lead affiliate programs in addition to the more common pay-per-sale programs. At the time of this writing, ShareASale offers more than ten times as many pay-per-sale programs as they do pay-per-lead programs. However, with almost three hundred programs on ShareASale alone, there are still many options.
Which is Better?
Each type of program has its own pros and cons. Which one you should use is often determined by the type of sales vehicle you have (for example, website, email newsletter, or mobile app), how much traffic you get, your income goals, and so forth.
Where to Find Pay-Per-Lead Affiliate Programs
Pay-per-sale affiliate programs can offer leads for as little as $0.01 or upwards of twenty dollars. Higher commissions are possible, but extremely rare – at least in the case of network-managed affiliate programs.
Affiliate networks and affiliate tracking software that run pay-per-lead programs include ShareASale, Medley Affiliate Network, ClickBank, and others. Some merchants manage their own affiliate programs, using proprietary affiliate tracking software or licensed software such as Post Affiliate Pro.
Another option that hasn’t been fully tapped in the affiliate space is local lead generation. Most of the major affiliate marketers tend to focus on highly competitive niches, which means that local areas have yet to be fully saturated.
Like large national or international companies, local companies will also pay for leads. Local lead generation can often earn more per lead and is often less competitive.
Where to Find Pay-Per-Sale Programs
Pay-per-sale programs dominate the affiliate marketing industry. Some affiliate networks operate exclusively on a pay-per-sale model, while those that offer both always offer more pay-per-sale options than pay-per-lead options.
Also, pay-per-sale programs are less risky for merchants. With an increasing amount of online fraud, false online traffic, and false leads, merchants have ended up paying for leads that don’t convert. This is one reason that pay-per-click affiliate programs have become so unpopular.
Since virtually all affiliate programs offer predominantly pay-per-sale compensation models, a simple Google search will reveal the top affiliate programs and merchants relevant to your niche. And that’s one of the best ways to determine which type of compensation model is best for you.
Focus on Your Niche to Find the Right Compensation Model
It’s always best to start with your niche before finding a compensation model that’s right for you. Start with your content or sales vehicle and then find affiliate programs and merchants that have relevant offers. If some of them offer pay-per-lead programs, then it’s worth experimenting with those to see if they work with your sales vehicle.
This means that if a customer returns too late to complete a purchase, the affiliate doesn’t always get credit or compensation for that sale.
If you feel that this is the case for your merchant, or if your audience is less likely to complete a purchase soon after click-through, then you may want to test out a pay-per-lead affiliate program.
Though leads can pay less than a commission for a purchase, for the reasons mentioned above this type of compensation model may end up generating more revenue.
If, for example, your content tends to cater to an earlier part of the sales funnel, then a pay-per-lead monetization strategy may work more effectively for your audience.
This type of crowd may be less likely to immediately convert, but they may still become a follower or customer of your merchant. If you focus on a pay-per-lead model, you could end up generating more revenue and higher quality traffic for your merchant.
To find the model that works best for your situation, it may be prudent to split-test both compensation models. Since so many factors go into the conversion numbers and revenue output it’s often impossible to find the most effective monetization method without testing.
Though pay-per-lead affiliate programs are less common than pay-per-sale programs, they are still a viable option for certain niches and audiences. Explore options by finding relevant merchants, affiliate programs, and affiliate networks, and then narrow down your options with analytics and testing.