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It's All About Results

Is pay-for-performance online marketing right for your business?

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This story appears in the October 2004 issue of Entrepreneur. Subscribe »

Wish you could pay for results instead of high hopes when it comes to online marketing? Well, you can. Although finding programs that allow you to pay on a per-lead or per-order basis requires research, they are out there. But the pay-for-performance model doesn't work for all companies, however, so follow these steps before engaging in a program:

1. Determine your cost-per-acquisition (CPA) goal. With performance-based advertising, you know the rate you'll pay to acquire leads or sales before you spend any money. Do your homework before you negotiate CPA deals with vendors. By identifying your current customer acquisition costs from your offline and online marketing programs, you'll see the range of profitable possibilities. Push for the lowest payout. If you need to increase your per-lead or per-sale amount to seal the deal, refer to your analysis to choose a rate that will work for you.

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