Performance pricing model
Performance pricing model is a type of pricing strategy where the price of a product or service is determined based on its performance or results. This model is commonly used in industries such as digital marketing, where pricing is based on the success of a campaign or advertisement.
One example of a performance pricing model is the cost-per-click (CPC) model used in online advertising. In this model, advertisers only pay when a user clicks on their ad, ensuring that they are only paying for actual results.
Another example is the cost-per-action (CPA) model, where advertisers only pay when a specific action is taken, such as a purchase or a sign-up. This model is often used in affiliate marketing programs.
Performance pricing models can be beneficial for both the seller and the buyer, as it aligns the interests of both parties towards achieving a common goal. Sellers are incentivized to deliver results, while buyers only pay for actual outcomes.
Overall, performance pricing models are a flexible and effective way to price products and services based on their actual performance, rather than on arbitrary factors.
For more information on performance pricing models, you can visit Wikipedia.