I’m sure that there are many different types of affiliate program models.  However, today, we’re just going to focus on the three most common types of affiliate programs.

Pay-Per-Sale is when you pay your affiliates a commission based on any sales you refer to you.

Pay-Per-Lead has you paying your affiliates a set fee when someone signs up for your mailing list, completes a form to get more information, etc.

Pay-Per-Click gives your affiliates a certain amount each time someone clicks their affiliate link.

Read on find out more about each and figure out which one would be best for your affiliate program.

Pay-Per-Sale:

With pay-per-sale you are only paying affiliates when action is taken.  Basically, when your affiliate sells something, they get paid.  Pretty simple, really.

This is perfect for most product-based businesses but can be used for service businesses as well, IF you have specific services that your customers can buy at a set price.

If you have a service-based business that requires estimates or you charge by the hour, it’s probably won’t be as easy for you to use an automated pay-per-sale affiliate program, so let’s talk about using pay-per-lea.

Pay-Per-Lead:

Pay-per-lead programs are typically seen in highly-competitive, high-pressure industries like mortgages, life insurance, business opportunities and so forth.

In these cases, the follow-up with the lead is often done of the phone, etc. – so paying per sale isn’t always possible. In addition, you can bet the big players with these types of programs can afford to pay out $5, $20 or even $40 per lead because overall, they will earn even more per lead. These guys have done their math.

But don’t let that intimidate you.

You don’t have to be a big shot or pay out huge bucks per lead to get in on the game. You just have to do your math to see how much you can afford to pay per lead and we’ll talk about this in the chapter on how much to pay your affiliates.

If you have a service-based business that requires you to give estimates, charge per hour, etc. this is a possible way for you to implement an affiliate program. You simply pay the affiliate for sending a prospect to you and then what you do afterward is up to you.

HOT TIP! You can also implement a pay-per-lead program into a product-based business. In my years of dealing with affiliates, I’ve come to learn there are the “quiet” affiliates and the go-getters. The quiet ones are a little bit would rather “sell” without “selling”, while the go-getters will promote the heck out of your products. A pay-per-lead program allows you to get the most out of your quiet affiliates.

Let me explain…

I’ve seen pay-per-lead programs that pay you for giving away a list-building freebie simple because the affiliate is giving them a lead they wouldn’t have otherwise be able to reach and the “quiet” affiliate loves selling this way.  A quiet affiliate will often promote things that are free.

For example, if you offer a special report, teleseminar or an ecourse, they might be happy to send traffic to that and they’ll promote it whole hog. That way they don’t feel like they’re pressuring their readers, their readers get AWESOME content and you get a bunch of leads you can continue to sell to as long as they are on you list.

The nice thing about quiet affiliates is that they tend to have a nice following of faithful readers that take recommendations seriously. So, where previously, you might have had a well-meaning, but inactive affiliate, you now have a great producer and they’re getting paid too!

ANOTHER HOT TIP! Even if you don’t have your own product or service, and you’re strictly an affiliate marketer, you can still set up a pay-per-lead affiliate program. Your affiliates refer people to your newsletter, reports, free ebooks, etc. and they get paid for the leads. Then you use our list to continue to promote products through other people’s affiliate programs.

You can choose to do only pay-per-lead or a combination of pay-per-lead and pay-per-sale.

Pay-Per-Click:

Pay-per-clicks were more common years ago, but due to the growing instances of click fraud, there aren’t too many programs like that around anymore. One obvious example of a program in existence today is Google Adsense. If you’re not familiar with Adsense, it’s a program where you can display ads from Google’s advertisers and you get paid every time someone clicks an ad. Google is operating on a huge scale and spends plenty of cash on fraud-detection. This isn’t likely in the grasp of a small operation, so you won’t see too many small businesses doing it.

However, you might use a variation of pay-per-click, by creating a referral contest that involved a few prizes, rather than a payout per click.

For example, you’d offer a first, second and third prize of pre-determined value (you could even have other companies donate the prizes) and give your referrers a specified amount of time to send the most visitors. That way, you’re protected against having to pay out large amounts on potentially fraudulent clicks and your budget is already set out before you begin. You will still likely want to have some system of checking and filtering out clicks from the same IP address, but this is much easier than going full-scale with a pay-per-click affiliate program.

Whatever type of program you decide to run, there will be some number crunching to do.  Tomorrow we’ll talk about how much you should be paying your affiliates.