Recently we did a piece on the Link Connector affiliate network and mentioned an interesting alternative affiliate payout type that they offer, Pay Per Call. In case you missed the post, you can find it here.

The article was a more general look at the two Advanced Events on the Link Connector site; today we are going to look more closely at the application of the Pay Per Call affiliate payout type. First of all, a quick rehash, what is it?

A Pay Per Call event enables merchants to reward their affiliates on a per call basis each time a user, which arrived from an affiliate site, places a call to a merchant. By driving leads from the web to the phone, merchants are better able to close sales and assist customers.

It sounds simple, but there is a bit more involved in order for affiliates to be paid, which is sure to make it less popular than other types of promotion. For now, the web and phone don’t really mix, but don’t underestimate the power of technology to change things. Skype is becoming more popular and a large number of people are now making Net to Phone calls. When such technology is more widespread, it will be possible to automate the Pay per Call affiliate payout type and that could see it really take off.

There are some industries where phone calls are the be all and end all and Link Connector has recognized this fact. A conventional affiliate payout type does not really work with things like hotel reservations, airline bookings and the like. If your prices vary widely depending on dates and times as well as the desires of your customers, it can be hard to apply a straight percentage. Things are further complicated by the fact that your profit margins might change wildly from day to day or month to month. This is where pay per call really comes into its own. There are some people that need an alternative affiliate payout type and this really is a very good one for some people.

Link Connector is an affiliate network that is well worth joining for many reasons, but one of the things that I like most about their program is that they are committed to providing options that other affiliate networks just do not have. The Advanced Events on Link Connector are not for everyone, but they do have a place. Today we are going to take a brief look at the two additional payout types on the LinkConnector network.

Link Connector: Advanced Events
The two additional payout types on LinkConnector are Pay Per Go and Pay Per Call. These are not offered at the other major affiliate networks, mainly for the reason that their interest groups are a fairly narrow focus. We are including them here today because they are of use for some affiliate networks and are therefore worth discussing.

Pay Per Call on LinkConnector
Pay Per Call is based around phone calls rather than the Internet. If you ask me, it is a little tedious, as customers must fill out a form to confirm a phone call has taken place. Assuming the customer fills out the form, the affiliate will be paid. This has a place in any sort of business where a large number of sales are made by phone.

A Pay Per Call event enables merchants to reward their affiliates on a per call basis each time a user, which arrived from an affiliate site, places a call to a merchant. By driving leads from the web to the phone, merchants are better able to close sales and assist customers.

Pay Per Go on LinkConnector
Pay Per Go is sort of like Pay Per Click in reverse. Instead of paying your affiliates for clicks that take traffic to your website, you pay them for clicks that your traffic makes from your website. This is great if you are marketing other people’s products and actually earning commissions yourself. You give up a percentage of earnings to your affiliates and in turn get a bit of help in marketing. Pay Per Go is an interesting concept that LinkConnector.

A Pay Per Go event is similar to a traditional Pay Per Click event; however, instead of rewarding affiliates for each inbound click to the merchant’s site, merchants set an amount to pay for each click outbound from their site. The Go event allows merchants to reward their affiliates for outbound traffic from their site to a partner’s site, or to other pages within their own website.

Advanced Events on LinkConnector do have a place. While it is a fairly narrow niche that they are aiming for, the niche does exist. That they have found it is to me, one of the most impressive things about the LinkConnector affiliate network.

The Shareasale affiliate network http://shareasale.com is a great place to look for information about how the different affiliate payout types. It is worth noting that some merchants run multiple affiliate payout types and do not exclusively rely upon one the less popular options.

Pay-Per-Sale: 2152 Merchants
No surprises here, this is the most popular of all affiliate payout types wherever you go for quite obvious reasons. Pay-per-sale is easy to calculate and easy to price for, especially if you are using it to pay for low cost items. Pay-per-lead and pay-per-click don’t really work when you are selling $30 software programs or $10 e-books, a percentage can be applied to any size of sale quickly and effectively. Pay-per-sale dominates all affiliate networks, not just Shareasale.

Pay-Per-Lead: 243 Merchants
I have to admit that this figure was a little higher than I had anticipated. It could be that more of these merchants are drawn to Shareasale than elsewhere. Of all affiliate payout types, this is most suited to high cost transactions. There is no surprise that the top merchants offer financial services where a percentage can not be so easily applied. Some of the merchants on the list for pay-per-lead also made use of pay-per-sale.

Pay-Per-Click: 8 Merchants
While seeing a figure as low as eight was surprising to some, one could be equally surprised that Shareasale had any pay-per-click merchants at all. When it comes to PPC, most merchants opt for advertising networks these days. Using an affiliate network for PPC does not give you the same coverage as any of the major advertising networks do. This is the least popular of the three affiliate payout types for obvious reasons.

When it comes to affiliate payout types, percentage of sale is favored by the vast majority of affiliates and no small number of businesses. Why is percentage of sale so popular? I have a few theories, read on if you are interested and feel free to give your own ideas in the comments.

It works because it is simple. What could be easier than calculating a commission that is based on a flat percentage? Affiliates can figure out how much they are going to get paid and affiliate managers can figure out how much extra they need to charge for their products to maintain profitability. There are some enormous advantages to flat percentages and that is a big part of why percentage of sale is the most popular of all affiliate payout types.

Big sales, small sales, they are all the same. A percentage can be applied equally to sales of any size. If your affiliate rate is 5%, it does not matter if it is 5% of $1 or 5% of $1,000,000; the formula can easily be applied. It is worth noting, however, that there are more appropriate affiliate payout types for more expensive items.

Of the affiliate payout types, cost per sale is probably the most underused. Cost per sale is a great way to cap the earnings of an affiliate for any particular sale. Affiliates might not like the CPS affiliate payout type as much as a percentage of sale, but there are times that it really makes sense. The best reason for using an affiliate payout type that limits the amount an affiliate can earn is if you are selling a high cost item.

With high cost items, the rate of profit can be quite low. Consider a piece of platinum or gold jewelry:

With precious metals the profit margin can be quite low compared to general consumer goods. With general low value consumer goods, the profit margin can be very high, but the amount of profit per item is relatively low. A ballpoint pen might have a markup of several hundred percent on the wholesale value, that amount, however, is for the most part insignificant. It might be as low as one or two dollars. A piece of jewelry, however, might sell for several hundred or even several thousand dollars more than the wholesale value. As the cost of the item is much higher, lower percentages of profit are required to make a sale worthwhile.

If you are selling something that costs a great deal of money, it makes sense to use the CPS affiliate payout type. Low percentages do not look that attractive to most potential affiliates and percentages can make it difficult to such delicate profit margins. Having a flat cost per sale allows the business owner a little bit more flexibility when it comes to pricing their inventory and it is a more attractive option than the cost per lead affiliate payout type because it does allow for repeat business.

If you are looking to build your affiliate network, then the choice of affiliate payout type is paramount. You will need to pick an affiliate payout type that your affiliates are happy to work with and that leaves them eager to promote. As a businessperson you have to accept and even respect the fact that your affiliates may be more concerned about their bottom line as they are about yours. It boils down to the time vs. money equation. The amount of time that they spend promoting your business will be a reflection of the money that they receive. If it is not in their interests to promote your site, they won’t. They will invest their time in other sites that pay more. You need to choose the affiliate payout type that they are going to be interested in.

In general, the best affiliate payout type is Percentage of Sale or POS. POS is attractive as there is no cap on the amount that an affiliate can earn from a sale. They can be earning 5% of $5.00 or 5% of $50,000. Many people feel that other affiliate payout types rob them of this potential. If you are to choose POS as your affiliate payout type, then you will need to factor in the additional expense in order to preserve profitability. With a little cost analysis, you should be able to find a price that you can afford. Once you have the logistics taken care of you will be able to build and start earning from your affiliate network.

Paying affiliates a percentage of every sale can get sales moving but it does get expensive, especially when you are dealing with high cost items. Of all of the different affiliate payout types, percentage of sale racks up the most affiliates, but that does not mean that there are no alternatives. If I were selling a high cost item, be it a car, a house, a luxury watch or anything else with a price tag of over a thousand dollars, I would be hard pressed to cough up a percentage of the sale to an affiliate. I believe that it makes more sense to pay for the lead.

Paying per lead has the distinct advantage of paying out a fixed amount per sale. Sometimes this can work in the affiliates favor, but on high cost sales it will pay for itself many times over. Deciding your price for lead might take a little testing, finding the right price may need to be done through trial and error. Take a look at what your competitors are paying, if they are using the pay per lead affiliate payout type. Start from there and fine tune until you find a price that you can afford.

Pay per lead is an affiliate payout type that is constantly overlooked. If you are thinking about implementing an affiliate system to market more expensive products, consider using pay per lead; it just might pay off.

As far as affiliate payout types go, pay per lead type deals are rather rare. The fact is that percentage of sale is what entices most people. Depending on the program that you are offering, however, it might make sense. I have seen several online poker rooms that offer the pay per lead affiliate payout type as an option. They pay quite well on the pay per lead, so it might make sense for affiliates to use the pay per lead code instead of the percentage option. The drawback for the affiliate is that in this case it will be a one time only payment.

Paying per leads can also work for more costly items. I can envision it being a good way to go for car sales or real estate sales, if an affiliate program were to be incorporated for such businesses. There are times when as a manager it is undesirable to pay a percentage. A flat rate can be useful in such cases.