There are a lot of terms in the world of digital marketing that have many different phrasings, but at the end of the day refer to the same concept. Cost per acquisition is one such example. Though CPA is also known as "cost per action," "pay per acquisition," or "cost per conversion," the meaning behind each of these terms is the same. When digital marketers use Cost per acquisition, payment is made for a specific action. In terms of Pay Per Call, that specific action is a phone call to a business.
Now, Pay Per Call itself brings with it many different ideas of what a conversion is. For some businesses, a conversion could be an actual transaction that takes place over the phone. For others, scheduling an appointment is a conversion in terms of determining the success of Pay Per Call in generating client actions. How can Cost per acquisition pricing models work with Pay Per Call?
What is a Cost Per Acquisition Pricing Model?
In all digital marketing efforts, brands are paying to put a product or service in front of consumer eyes. That space comes at a price, and businesses must determine how much they are willing to pay to generate a certain outcome. For example, a start-up brand using advertising to drive awareness of its recent launch has a different goal in its advertising than others. Its desire is to generate interest in the business more than promote something particular in its product or service lineup.
As such, this company is willing to pay more for advertising efforts that generate clicks, likes, shares, or other non-monetary actions. In Pay Per Call, Cost per acquisition pricing models are based upon an outcome involving a consumer making the decision to phone the business. Within this pricing model though, there are varying wrinkles.
How to Use Cost Per Acquisition Pricing Models
Cost per acquisition pricing models are based upon the action brands are looking to generate from consumers. That action, along with other factors, will determine the cost of these pricing models. In a post on pricing models, Marketing Land points out that all pricing models in digital marketing come down to three factors; effort, efficiency, and scalability.
Let's look at these factors a bit more in-depth and think of Pay Per Call:
- Effort: This is the time required to optimize the performance of the ad campaign. Does a medical clinic need to focus on pricing models that will have to evolve over time, or do simple ads that generate calls to set appointments require little enhancing with time? After all, little has changed in the realm of calling a doctor to schedule an appointment.
- Efficiency: Is the brand getting return on investment from the pricing model? In this case, companies should be more focused on ad campaigns with specific objectives. If efficiency is the goal, brands need pricing models that deliver ROI on campaign objectives.
- Scalability: Plainly put, this is a focus on pricing models that drive a larger volume of calls to meet a campaign objective.
Beyond these factors in Cost per acquisition pricing models, Pay Per Call clients should focus on the types of calls (long or short) that matter to the business and what specific action (making a purchase or simply gathering information) is desired from the consumer. These will help set a budget for pricing models that deliver the greatest benefit.
Watch More: Traditional CPA and Pay Per Call