No matter what your skill level is right now when it comes to Internet marketing, or selling over the internet, CPA is one way you can earn money without actually having to sell a single thing. Yes, you did read that correctly – you can make money online without having to make a single sale.
How is this possible? Simple: CPA or Cost Per Action is an advertising platform that allows companies to pay a commission when certain actions are carried out which do not always have to be sales. While CPA is a great way for advertisers to make sales it is also a brilliant method to generate leads. You may ask yourself why anyone would pay to generate a lead and this is a valid question.
What you need to understand is that it costs a company 6 times more to find a new customer than it does to retain a customer. Likewise, a repeat customer is apt to spend at least 30% more than a new customer. Taking these factors into consideration, a list of highly targeted leads will be much more profitable for a company than if they were to simply try and sell their product as a one off.
By building a list of targeted leads, the advertiser can market to the same people on a regular basis, already knowing that they are responsive therefore, even if they make an initial investment in building their list, they will generate a much greater revenue over the lifetime of a customer from a list of laser targeted prospects than they would by simply paying a sales commission and making a one off sale.
The advantage CPA has over other advertising models is that it allows companies to pay only if a customer has actually bought something or signed up for their list. This subscription can come under the guise of giving away free products or information, contests, surveys and much more. The fact that they pay only per action means that advertisers can pay a much higher commission per unit than is possible with other advertising platforms like pay per click.
For example, where you can only expect to earn anywhere from a few cents per click to possibly a few dollars, if you are extremely lucky with Adwords for example, CPA commissions can easily net you anywhere from $1 to even $150 per action, depending on the action and the promotion. Therefore, if a single person signs up per day for an offer you are promoting and the offer pays out $40 per action, you can make over $1,000 per month. Compare that to trying to make the same amount of money with PPC. You would need, in most cases, more than 100 clicks per day to even come close to the same figures.
Even if you consider a meager 1% conversion rate, with CPA you would need approximately 100 visitors per day whereas PPC would need 10,000 and you still wouldn’t come close to the same earning potential. It takes a lot more work to drive 10,000 visitors to your site on a daily basis than it does to drive 100.