Cost Per Action Vs Cost Per Sale – Similarities & Differences
When it comes to both Cost Per Action (in short known as CPA) and Cost Per Sale (sometimes known as CPS), there are a few similarities (as well as differences) between the two of them.
Before I go on to differentiate the similarities and differences between the both of them, let me first give you a brief introduction on what both of them are:
Cost Per Action – In this model, you will be able to receive a certain amount of commission whenever someone completes a desired action (as required by the merchant) – It can range from filling up a short form, signing up as a member of particular sites, receiving free trial for particular products/services, etc.
Cost Per Sale – In this model, you will receive a certain amount of commission whenever someone purchases a product/service you recommend from under your affiliate link.
In the next few sections, I am going to compare these 2 models of monetization, and point out to you the similarities, as well as differences, between the 2 of them…
1. Existence Of An Affiliate Manager
For those of you who are already accept into some CPA networks, you notice that, in every network, you are assigned to an affiliate manager – The affiliate manager’s job is to ensure your success in the network. What they will do is that they will need to first find out from you how you intend to promote the CPA offers (using which traffic generation strategy), and from there, he/she will suggest offers that you can promote that will generate you the most income (from the traffic generation strategy that you are intending to use.
However, for Cost Per Sale networks such as ClickBank, you are basically on your own – You choose products that you think will convert well for you and promote them.
2. Ease Of Signing Up
When it comes to the signing up process, it is much easier for you to get approved in Cost Per Sale networks compared to CPA networks.
Take ClickBank, which is a Cost Per Sale network, for example, signing up as an affiliate is a breeze – You can sign up and start promoting products as an affiliate in less than 5 minutes.
For Cost Per Action networks, for example, in order for you to get accepted into the network, you first need to have a website that is built up with some content (as they will require you to state down your website in the application form). On top of that, they will also require you to state down the amount of traffic your website receives every single month (the higher the amount of traffic your website receives, the higher the chance your application will get accepted).
Also, approval for access into these CPA networks is not immediate – It can take up to 72-hours for your application to be approved (or disapproved), and you will either be notified by a phone call or email.
3. Level Of Commissions
Commission levels for both models vary.
When it comes to Cost Per Sale model, if you are promoting physical products, your commission levels can range from between 1% and 10% of each product sale. And if you are promoting digital products, you commission levels can range between 50% and 75% (or sometimes even 80%).
The reason why you get a much higher commission level promoting digital products is that, unlike physical products, where cost is involved in fulfilling the order (shipping it to the customer), for digital products, customers can download it immediately after payment. Hence, the savings from the shipping cost is transferred to you, as the affiliate (where you get more commissions).
For Cost Per Action model, the amount of commissions you receive will depend on the type of action required. In general, the more time that is required by the prospect to complete the action, the more money you will receive.
For example, for actions such as filling up only a zip code or email address, you can expect to be paid between $0.20 to about $3. For actions such as filling up a short form, or signing up as a free member to a particular site (that consists of 5 to 7 fields), you can receive about $3 to $8. For actions such as giving your credit card details to pay for shipping (to receive a free trial offer), you can expect to be paid between $20 to $50 per sign up.
4. Traffic Generation Methods
When it comes to driving traffic to these offers, in CPA marketing, before promoting any offer in the network, be sure to check out the terms and conditions very carefully to find out what is permitted, and what is not.
Many a times, you are only allowed to use a few select traffic generation strategies to promote a particular offer. Make sure you abide to the terms and conditions as, failing to do so, will result in your affiliate commissions being reversed or even getting banned from the network.
My advice is, when in doubt, always check with your affiliate manager.
However, when it comes to Cost Per Sale marketing, in most networks, you are not restricted to the types of traffic generation methods.
While there are no refunds in CPA networks, there can be commission reversals if the merchant realize that the leads that you bring to them are fraudulent ones, or if the credit card information your leads have submitted is a fraudulent one.
However, for Cost Per Sale networks, customers are normally given 60-days to try out a particular product/service that they have just purchased and, during this period, if they are not entirely satisfied with the product for any reason whatsoever, they can seek for a full refund for their purchase and it will be given. And if your customer requests for a refund, your commission (that you receive from that sale), will be reversed as well.
The above are some of the differences between Cost Per Action (also known as CPA) networks, as well as Cost Per Sale networks. Are there any other differences between the two that I did not mention above? If there are, please feel free to add in using the comments box below. Your contributions will greatly benefit the online community.
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