What is pay per sale?
Pay per sale, sometimes addressed as cost per sale, marketing is a process that pays the owner or publisher of a Website based on the number of sales that are generated from an advertisement on the site. Under this agreement, the advertiser only has to pay for sales generated by the site based upon a prior agreed-upon commission rate. This process is the most favorable among advertisers, however it’s often the least favorable option among publishers.
Though it may seem ideal, PPS is way more challenging than sending referrals or clicks to a partner, since you need to be able to actually convert prospects into tangible sales. Therefore, PPS should be approached differently than traditional tactics of generating traffic and making sales.
How pay per sale works
- 1. Online advertising
Many independent publishers or Website owners include pay per sale advertising on their sites. When a user clicks on an advertisement and makes a purchase, the Website owner receives either a flat fee or a percentage of the overall sale.
- 2. URL tracking
PPS uses URL tracking to identify the publisher or owner of a site. When an ad is clicked a unique URL is used that indicates to the advertiser the source of the traffic.
- 3. Advertiser, publisher alignment
Differing from other advertising models, PPS aligns the interests of both advertiser and publisher in seeking to reach larger audiences and sell more product. While traditional advertising pricing is not tied to sales, PPS motivates all parties to participate in marketing.
- 4. Setting a budget
Before jumping into PPS, from a business perspective, it is important to set a budget for how much you’re willing to spend daily.
- 5. Optimization and sign ups
Through Google Adwords, analytics, merchant center accounts for projects, and testing of e-commerce, you’re able to fully understand the level of optimization utilized and needed.
- 6. Expected profit
When taking into account various factors such as the amount of product that is for sale, product type, profit margins, as well as the median price of products, you’re able to form an educated guess on what may be expected in profit.
Why PPS matters
- 1. It’s easy
The PPS advertising model is simple and easy to execute. Once agreements are made, Website publishers simply publish ads to their sites and receive income from each sale. Advertiser provide the creative for the ads and handle the underlying technology to tabulate fees that go to publishers.
- 2. Let’s in the little guy
Even Websites that focus on specialized topics can play the PPS game. For example, being an Amazon.com affiliate for knitting products on a knitting blog can help bring in revenue for its publisher.
- 3. Boosts ROI
PPS requires little up front effort or costs but can bring in revenue for publishers, providing the possibility of a high return on investment. For publishers that understand their audiences and their audiences’ purchasing habit, PPS can be an excellent advertising option.
- 4. Improves productivity
Calculating PPS supplies various numbers that can be used to point out areas where sales productivity can be benefit from strategic improvements. However, this is an ongoing process, meaning PPS should be constantly calculated in order to properly assist companies in finding different ways to increase revenue and lower costs.
- 5. Capitalize off reach
The larger your platform’s reach, the larger your ROI. Efforts made to increase online engagement directly translates into revenue, creating a profitable avenue to funnel high performance.
- 6. Real-time offline tracking
Continue to track offline purchases from online ads with real time analytics. Since you only pay when your customer pays, you’re able to continue to track each sale both on and offline.
Pay Per Sale Best Practices
- 1. Consider lead generation
If your lead generation program is completely or just partially automated, determine how much you’ll need to spend versus the number of leads you currently capture. Consider the time your sales staff has to spend generating leads and determine the median time investment per sale.
- 2. Calculate prospective conversion
When thinking about the average amount of time it takes to turn a prospect into a loyal customer, think about the activities required to achieve the conversion. Apply how much it’ll cost by way of man-hours and attendant cost.
- 3. Leverage search traffic
Leveraging mobile search traffic on Google, Yahoo, and Bing generates tactics that help to increase sales and profit. PPS helps to save money while gaining traffic to make money.
- 4. Increase performance
In order to increase profit made off of pay per sale marketing, performance has to be increased as well. In fact, PPS is strictly performance based, so while you save money since you only pay once you make a sale, you need to generate sales in order to track performance and increase revenue.
- 5. Focus on evergreen product
Putting an emphasis on evergreen products that have a continual demand and market of guaranteed potential buyers that always make for good impulse purchases is one of the most rewarding ways to profit off of PPS. Consider getting involved with industries that have a ready stream of awaiting buyers like chat portals and dating platforms.