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Payment and models

CPL (Cost Per Lead)

Also called Cost Per Lead, price per lead, lead commission, CPL model, pay per lead.

Short answer

CPL (Cost Per Lead) is a commission model in which the affiliate receives a fixed amount for each qualified lead – a completed form, a trial sign-up or a contact request – regardless of whether the lead later becomes a sale.

Definition of CPL (Cost Per Lead).

CPL pays for an action that comes before the purchase. The affiliate sends a visitor on, the visitor submits their details, and the advertiser pays an agreed amount for the contact. The sale may come weeks later, or not at all – that does not change the commission. CPL thus shifts risk onto the advertiser and places the strictest demands on what counts as a lead.

CPL is typically used in industries where the purchase is not completed online: insurance, mortgages, solar panels, car finance, B2B software and trade services. The sale is closed by a person in a follow-up conversation, and a single lead can be worth many thousands of kroner. When the value only arises offline, the commission cannot be tied to an order the network never sees.

The price per lead is worked out backwards from the advertiser’s own figures: expected contribution margin per customer, times the share of leads that become customers, times the share of that amount the advertiser is willing to give away. If the sales team closes 10 % of leads and a customer is worth DKK 5,000 in contribution margin, each lead is worth DKK 500 – and the rate is set below that figure, not above it.

How it is calculated

CPL = total lead budget ÷ number of approved leads

total lead budget
all commission paid out for leads in the period, excluding VAT
number of approved leads
leads the advertiser has accepted as qualified – rejected leads are not counted

Example

Lead budget
DKK 12,000
Approved leads
240
Actual CPL
DKK 50.00

The actual CPL only equals the agreed rate when every lead is approved. If payment is also made for leads that are later rejected, the actual CPL is above the rate – and the difference is the price of poor lead quality.

What counts as a lead

A lead is only worth paying for if the definition is written down before the traffic starts. The program terms must name the specific action (form submitted, trial account created, quote requested), the fields that must be filled in, and the conditions that make a lead invalid: wrong postcode, a phone number that does not exist, an age outside the target group, duplicates on email or phone.

Without that definition, every rejection becomes an argument. With it, the affiliate can adjust their traffic instead of guessing.

CPL from the affiliate’s side

The affiliate does not compare rates but earnings per click. A CPL program at DKK 50 with a 4 % conversion rate gives DKK 2.00 per click. A CPS program with DKK 400 in average commission and a 0.4 % conversion rate gives DKK 1.60 per click. The low rate wins, because the threshold for handing over an email address is lower than the threshold for paying. On the other hand, an approval rate of 70 % cuts almost a third of that EPC away again – and that is only discovered on the statement.

CPL vs. CPS

AspectCPLCPS
Triggered byan enquiry – form, sign-up, trial accounta completed order with a payment behind it
Rate typealmost always a fixed amount per leada percentage of the order value or a fixed amount per order
Riskthe advertiser also pays for leads that never buythe affiliate carries the risk until the order is placed
Reason for rejectionthe lead is invalid or outside the target groupthe order is returned, cancelled or not paid

Choose CPL when the value of a contact can be calculated but the order cannot be measured online – choose CPS when the order goes through your own checkout.

How it goes wrong

  • 01

    The lead is never defined

    If the terms only say “per lead”, the disagreement arises at the first statement. The advertiser rejects with reference to quality, the affiliate has no yardstick to adjust to, and the partnership ends there.

  • 02

    The same person is counted more than once

    A visitor who fills in the form twice is one lead. Without dedup on email or phone number, the same contact is paid for twice, and the actual CPL rises without anyone being able to see why.

  • 03

    Traffic with no intention to buy

    CPL has a lower threshold than any sales-based model and attracts traffic that hands over details to get on to something else. Leads from reward sites rarely convert and poison the approval rate for the entire program.

Frequently asked questions

What is the difference between CPL and CPA?

CPA is the umbrella term for all models that pay per action. CPL is the variant where the action is an enquiry – a form, a sign-up or a trial account. All CPL is therefore CPA, but CPA also covers CPS and CPI.

How much commission do you get per lead?

The rate depends on what a lead is worth to the advertiser, and there is no common price across industries. The calculation is always the same: expected contribution margin per customer times the share of leads that become customers. If a sales team closes 10 % of leads and a customer is worth DKK 5,000, the ceiling for the rate is DKK 500.

Can a lead be rejected after it has been recorded?

Yes. CPL programs have a period in which the advertiser can reject leads that do not meet the requirements in the program terms – incorrect contact details, duplicates or visitors outside the target group. The rejection should come with a reason the affiliate can adjust their traffic to.

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