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December 11th, 2008, 01:32 PM #1An idea...
We were discussing CPL programs around the water cooler the other day, and one on-going issue that comes up is that each lead source (i.e. affiliate) is inherently unique, and thus the value of their leads will be different (assuming that lead value is based on conversion rate of lead to sale, or to get a little more technical, lead value = profit from sales / price of leads + cost of chasing leads).
The sledgehammer approach with CPL programs has always been to set CPL in such a way that the total program remains profitable, weeding out publishers with very low conversions and handing out carrots to publishers with high conversions. However, it occurred to me that if the process could become more exact in terms of setting price per lead in direct proportion to conversion, then it would be better for everyone involved.
The form this would take would be basically a conversion rate stat in addition to your normal reports, (impressions, clicks, leads), with a clearly outlined tiered commission based on conversion. For example, if your conversion rate is 1%, your CPL is $10, if 2%, $20. This would give incentive for affiliates to put better quality into their sales, giving merchants better leads and more room to reward good leads. The caveat to this is that a publisher would have to send at least a certain number of leads through before this kicked in, otherwise their lead price would fluctuate dramatically.
My question is, do you think this would work?
Does this eliminate the whole point of a lead based program from the publishers perspective (since in essence this pushes you closer to a cost-per-sale system)?
Thoughts appreciated...Louis Deering | Affiliate Manager / Network Rep.
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December 11th, 2008, 03:24 PM #2
I like it, but a concern would be how to determine a valid sample size. 100 leads, 1000 leads?
I can see affiliates who might be negatively effected by this saying "I got you the lead, it's your job to close the sale." But affiliates that do a good job of pre-qualifying the leads would be rewarded, and ultimately those are the affiliates you want to spend your time and money on right?
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