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CPA (Cost Per Action) advertising is performance based and is common in the affiliate marketing sector of the business.
In this payment scheme, the publisher takes all the risk of running the ad, and the advertiser pays for the media on the basis of only the number of users who complete a transaction, such as a purchase or sign-up. This is the best type of rate to pay for banner advertisements and the worst type of rate to charge.
With CPA, you pay not for an impression, and sometimes not even for a
clickthrough, but for a visitor who has taken some kind of action, such as purchasing a product, subscribing to a mailing list, joining a membership, contacting you for an inquiry, or even clicking though to another web site. CPA is less risky than
CPM, as you only pay when the desired action is taken.
CPA advertising includes advertising options like pay-per-click
(PPC) or pay-per-inclusion ads or listings. Pay-per-click advertising begins at between one cent and 10 cents per click. If you can find ways of capturing the name and e-mail address of your visitors and customers, you can make back-end offers to your mailing list and add easier revenue to your bottom-line easier, meaning higher conversion ratios with little to no costs.
Back-end sales should be very lucrative for any business. If you have a good lead-in product, selling anywhere up to $600, then with a good back-end you should easily be able to double your profits.
For example, if your customer buys a $300 front-end product from you, then you should be able to sell them another $300 in back-end sales, but not necessarily right away, but over the span of your relationship with that customer. Often you can sell even more.
The beauty of this process is that it costs you less time, energy, and money to sell a back-end product to the same customer than it does to produce the inital front-end sale. Generating a first-time customer is far more expensive and time-consuming than selling your existing customer base back-end products and services. Once your lead-in product reaches the $1,000 price point, it is harder to generate double the sales on the back-end.
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