Cost-Per-Action Formula Pleases Advertisers, Media Alike

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Higher Power Marketing's Unique Process 'Bridges' Gap Between Payment Preferences. Higher Power Marketing has found a way to resolve the built-in paradox that has limited the effective use of cost-per-sale advertising programs.

Higher Power Marketing

Clients think it’s the coolest thing since sliced bread to pay a media outlet on a per-sale basis. What they don’t understand is that they’re actually jeopardizing the vitality of their business by pitting themselves against the media.

Higher Power Marketing (HPM) has found a way to resolve the built-in paradox that has limited the effective use of cost-per-sale advertising programs.

According to HPM President and Chief Executive Officer Peter Feinstein: "Clients think it's the coolest thing since sliced bread to pay a media outlet on a per-sale basis. … they think it's a no-risk way to generate sales. What they don't understand is that they're actually jeopardizing the vitality of their business by pitting themselves against the media."

Media partners, he says, "always prefer to be paid on a per-call basis," because they don't like being held hostage to a call center's ability (or lack thereof) to close a sale.

"We don't get to choose the call center; we don't get to write the telemarketing script; and we don't hire or train the operators," Feinstein recalls a radio executive grumbling. "There's no way I'm going to let my network be on the hook for them closing sales. Just pay me per call and let it go at that. If you can do that, I'll run their offer whenever I have time."

So Feinstein and the team at HPM crafted the "Bridge" - a formula designed to satisfy clients and media partners, bringing them together instead of pitting them against each other, as they are in the traditional pay-per-sale model. The HPM Bridge pays media partners for every call they send to the client, but correlates that payment to the client's revenue per call (RPC) - thereby maintaining the cost-per-order relationship.

How It Works

HPM's system looks at the client's inbound call volume and sales revenue to establish a revenue-per-call benchmark. Feinstein explains: "The Bridge is the amount we charge the client. It's always a flat fee per-call, based upon their revenue per call. We keep a small margin for ourselves and pass the vast majority of the money onto our media partners."

He says clients doing this love it because they receive as much as 25 percent to 60 percent more inbound calls than they would from a traditional cost-per-sale program, so their call-center sellers get a lot more practice with real, live potential customers, and consequently close more sales. Since the HPM Bridge fills the client's sales funnel with more prospects, the call center and the client benefit too.

At the same time, Feinstein points out, media partners are finally getting what they want: solidly performing client offers that pay them on a per-call basis. HPM has media partners across the country willing to plug its clients' ads into their unsold inventories of ad space or time.

"They love it! And they support it with lots of media," he says. "They run the spot with much more frequency than their traditional pay-per-order programs. We're able to secure bigger media outlets, and we receive more time and/or space, simply by agreeing to pay them for every answered call they send to our client," Feinstein adds.

"They know we keep meticulous track of all call activity; they trust our reporting; and they know, from working with us for more than a decade, that they can rely on getting paid every month."

Traditional cost-per-sale programs don't receive nearly as much media interest, Feinstein says. The outlets accepting those programs are smaller and typically don't run the ads frequently enough to make the program really work effectively.

"Whenever we're approached about entering into a cost-per-order or cost-per-sale program, we move the offer to a pay-per-call, based upon the client's RPC," Feinstein says. "That accomplishes everyone's goals. Trite as it sounds, it's a win-win-win."

Feinstein says product marketers "owe it to themselves to at least investigate this methodology with a quick call to me at 1-888-501-5544. Or, they can drop me an email at peterf(at)hpowermarketing(dot)com."

Media outlets looking to be paid per call instead of per order can reach out to George Eldredge, HPM's vice president of media, at 1-888-501-5544 or george(at)hpowermarketing(dot)com.

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