Pay per placement lead generation: the models, the attribution questions, and the red flags
By Drippay, Inc.Published 9 min read
Lead vendors sell to staffing firms in five ways: a subscription, a price per lead, a price per meeting, a share of the placement fee, or a minimum plus a success fee. The label on the offer matters less than one question: how does the vendor prove that a placement came from its lead?
This guide lays out each model, the attribution questions to put in writing before you sign, and the red flags. Disclosure: we build dreach, a managed service for staffing firms that is priced with a monthly minimum credited against a fee on results. We describe that model at the end, with no numbers, and the rest of the page applies to any vendor.
The five models staffing firms are offered
Each model puts the risk in a different place. The cheaper a model looks at signing, the more it usually depends on how the vendor defines success.
| Model | You pay for | Who carries the risk | Ask about |
|---|---|---|---|
| Subscription or retainer | Access or activity, every month | You | What happens in a month with no orders, and how to exit |
| Pay per lead | Each lead the vendor delivers | You, until the lead proves good | What counts as a lead, and whether leads are shared |
| Pay per meeting | Each booked or held meeting | Shared, but the vendor controls the definition | Scheduled, held, or qualified and held |
| Pay per placement or fee share | A percentage of a placement fee or margin | The vendor | Which orders count and for how long |
| Minimum plus success fee | A fixed monthly amount, then a fee on results | Split between you and the vendor | How the minimum relates to the fee, and what the fee is measured on |
The models are generic; terms vary by vendor. Check every term in the contract, not the sales deck.
Pay per lead and pay per meeting
Pay per lead is a performance model where you pay a fixed fee for each qualified lead rather than for clicks or impressions. The word qualified carries all the weight. A vendor can set it as low as a form fill.
Pay per meeting has three common versions, per one vendor’s own description: pay for each scheduled appointment whether or not the prospect shows, pay for each appointment held, and pay for each qualified appointment held. Only the last one protects you from a meeting with the wrong person.
Two more terms decide whether pay per lead is worth it. Whether a lead is exclusive or shared with competitors, and whether a bad lead earns a credit. A review of nine pay-per-lead services in other industries used both as its main comparison points, and they carry over to staffing.
In staffing, a meeting is not revenue. One staffing funnel guide lists ending the funnel at booked meetings as a common mistake, and separates a signed agreement from active revenue. A meeting counts when it leads to a job order.
Related: staffing agency lead generation
What pay per placement can mean
You already know the shape. Contingency recruiting is paid only if the recruiter places a candidate, usually as a percentage of first-year salary. A pay-per-placement lead vendor borrows that shape, and it can mean three different things.
- A fee share. The vendor brings you a job order and takes a percentage of the placement fee you collect on it. It works like a split with another firm.
- A revenue share on clients the vendor opened. The vendor runs business development, and takes a percentage of fees from accounts it introduced, sometimes for a stated period and sometimes for as long as the account bills.
- A marketplace reward. An employer posts a role, pays the platform, and the platform pays the recruiter a reward on a hire, as Paraform’s recruiting agreement describes. The marketplace holds the employer.
Ask which one you are being sold. Then ask what the percentage is applied to. For direct hire it is usually the placement fee you collect. For temporary and contract work the sensible base is gross profit collected, not client billings, because billings include pay and taxes you pass through.
Related: Paraform alternatives for agencies
Attribution: how a vendor proves a placement came from its lead
This is the section to take to the contract. Any performance model is only as honest as its attribution rules, and vague rules favor the party that keeps the records. Put each answer in writing.
- What is a lead? The employer, the role or signal, the date, and the hiring manager, or just a company name.
- What proof comes with it? A dated source you can open yourself, not a score.
- What is the window? How many days after a lead can an order still count? An example only: 90 days from the lead date. Longer windows favor the vendor.
- What is excluded? Orders already in progress, clients you already had, and roles you were already working should not count. Ask for the list before launch.
- What is the chain of evidence? A lead, the employer’s reply, the accepted order, the placement, and the collection should each be recorded against the same lead.
- Who records it, and can you see it? You should be able to open the trail for any fee you are billed.
- What is the fee measured on? Placement fees collected, gross profit collected, or billings.
- What happens on refunds and guarantee replacements? A fee on a candidate who leaves in week three should adjust.
- What if both sides touched the account? Decide the rule before it happens.
- What is the tail after you cancel? How long can the vendor claim fees on accounts it introduced.
Red flags
None of these is proof of bad faith. Each is a reason to slow down and ask for the term in writing.
- No written definition of a lead, or a definition that counts any company with an open role.
- A fee on all revenue from an account, including clients you had before the vendor arrived.
- No exclusion for orders already in progress.
- Success defined as meetings booked, with no link to a job order.
- Leads that are resold or shared, with no credit for bad ones.
- Proof that is a score or a screenshot with no source and no date.
- A long tail after cancellation, or auto-renewal with a long notice period.
- Guaranteed volume. A promise of a number of leads or placements tells you the vendor is selling volume. Staffing demand moves with timing, not quota.
- No way to audit. If you cannot see the trail behind an invoice, you cannot dispute it.
The cost math, with an example
Price per lead hides the number that matters, which is cost per placed client. Here is an example with made-up figures, so run your own. Suppose a vendor sells 40 leads for 150 dollars each, 6,000 dollars in all. Four of them reply, two become clients, and one places. That is 6,000 dollars for one placed client, before your recruiters’ time.
Now suppose a vendor delivers the same single placement under a fee-on-results model. You pay on the placement, and the vendor carries the cost of the other 39 leads. Which is cheaper depends entirely on the percentage and the window, so compare the two offers on cost per placed client, not on price per unit.
How dreach prices, and where it differs
dreach uses a monthly minimum credited dollar for dollar against an agreed fee on results. It does not charge per lead. Only orders that started with a dreach lead are eligible. Direct-hire orders count on the placement fees you collect. Temporary and contract orders count on the gross profit you collect, not on client billings.
The percentage, the time window, what to leave out, and how refunds, rebates, or guarantee adjustments are handled are agreed before launch. This page states no percentage or amount, because they are set per firm.
To decide which orders count, dreach traces an order back through your client account, proof the employer is hiring with a date, the lead, the employer’s response, the accepted order, the placement, and the collection you report. Orders already in progress or introduced elsewhere do not count.
Two limits to know. The minimum is a fixed monthly cost, credited against fees on orders that started with a dreach lead. And in the current pilot dreach records what your firm reports as collected; it does not check invoices or payments. Your team works each lead from its own accounts.
See how dreach is priced and what has to be agreed before launch.
See how dreach works for staffing firmsRelated: dreach pricing and what countsstaffing business development
Whatever the label, a performance model comes down to its definitions: what a lead is, what counts, for how long, and who can see the record. Ask for those in writing, test the offer on cost per placed client, and walk away from any vendor that will not show the trail. dreach’s answer is a monthly minimum credited against a fee on orders that started with its leads, with the rules agreed before launch.