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.

Lead-vendor pricing models for staffing firms
ModelYou pay forWho carries the riskAsk about
Subscription or retainerAccess or activity, every monthYouWhat happens in a month with no orders, and how to exit
Pay per leadEach lead the vendor deliversYou, until the lead proves goodWhat counts as a lead, and whether leads are shared
Pay per meetingEach booked or held meetingShared, but the vendor controls the definitionScheduled, held, or qualified and held
Pay per placement or fee shareA percentage of a placement fee or marginThe vendorWhich orders count and for how long
Minimum plus success feeA fixed monthly amount, then a fee on resultsSplit between you and the vendorHow 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 firms

Related: 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.

ask away

Questions

What is pay per placement lead generation?

A pricing model where a lead vendor is paid when a placement happens, usually as a percentage of the placement fee or margin on an order the vendor’s lead produced. It resembles contingency recruiting, and it depends on attribution rules that say which orders count.

Is pay per lead worth it for a staffing agency?

Only if you know what a lead is, whether it is exclusive, and what your cost per placed client works out to. A cheap lead that never becomes a job order is the most expensive one. Check the lead definition and credit terms before you compare prices.

What is performance-based lead generation for recruiters?

Any arrangement where the vendor’s pay depends on a result rather than on time spent: a lead, a meeting, a job order, or a placement. The further the result sits toward revenue, the more risk the vendor carries and the more careful the attribution rules need to be.

How should a vendor prove a placement came from its lead?

With a record that links one lead to the employer’s reply, the accepted job order, the placement, and the collection, inside an agreed window, and that you can open yourself. Orders already in progress and clients you already had should be excluded by name before launch.

What are the red flags in a lead-gen contract?

No written lead definition, fees on all account revenue, no carve-out for orders in progress, success measured as meetings, resold leads with no credit, proof with no source or date, a long tail after cancellation, and no way to audit an invoice.

How does dreach charge?

dreach credits a monthly minimum dollar for dollar against an agreed fee on results, only on orders that started with a dreach lead. It does not charge per lead. The percentage and the window are agreed before launch and are not published on the site.