The Reason You Are Not Making Enough Money Is Because Your Traffic & Strategy Sucks

I was just talking to a friend online, who said something that made my ears perk up.

He was talking about how much money some businesses really pay for leads.

Yes, some lead companies are jumping up and down in their chairs right now, screaming at their monitors telling me to STFU!!

If your traffic was better quality and much higher volume, you could be making more money in lead generation, by going directly to the buyers of those leads.

Lead generation is good money for those who really know what is going on behind the scenes, and I am going to give you a peak.

Some CPA companies make a commission when you generate a lead for the companies buying leads.

Some CPA companies make the full-rate by handling all of the lead generation process, including scrubbing the lists, and selling those premium leads directly to the merchants.

The Lead Gen business is a numbers game of course, but you have no idea the size of the numbers involved in the game.

There are two Lead Generation business models, and that will be important to this discussion:

1. CPA Leads;
2. Bird-Dog Leads.

CPA Leads (Cost Per Action) are leads where the buyer pays $0.10 to $30 dollars for a name, number, address, email, etc., or any combination thereof.

Bird-Dog Leads are leads where the buyer pays the big dollars for people who actually convert to buyers.

With CPA Leads, we get paid less per lead, because the vendor or the middle man has to clean the list (scrub the list). In essence, what they are talking about here is eliminating the false positives. There are people who got on the list, but are not actually in the vendors target audience.

For example, if you are collecting mortgage leads, the person whose name you have must actually be looking to buy a house and qualified to receive a loan.

If they are not looking to buy a house, and they are not qualified to get a loan, then the mortgage broker cannot sell them a loan, right?

Do you see how this works? There must be a good chance of converting that name, phone number, address or email to an actual sale at the end of the process, in order for the lead to be worth the money the advertiser wants to pay for it.

If an insurance agent is buying the lead, they have to look at how much they can afford to spend to get one paying customer, then they have to look at their conversion rate to know how many people they must talk to to find one new customer.

Everyone in this process in looking to make a profit for the money they spend on lead generation.

At one time, Amazon said it was spending $18 to get one new customer, and it did not make its investment back until after the customer bought its fourth book!! So the ability to generate repeat sales is important to its advertising model.

I spoke one time to an insurance agent who was willing to spend as much on advertising as he would get in return for one person buying one policy.

In other words, if he spent $700 on advertising, he would want to earn back on that promotion $700+ in new policies written.

Of course, I don't know what the markup is on insurance, so I am guessing that one customer would need to stay with the agency for 18 months, before the agency started profiting from the new customer, OR the agency would need to pick up 3 new customers, and it would have earned its investment back after 6 months.

These examples show you how the Lead Generation business works.

Some CPA companies are working as Bird Dogs, letting their affiliates generate the leads, then they must scrub the list, before handing the list to its client.

Other CPA companies just make a commission equal to that of the affiliate, but the buyer has to scrub the list.

Either way, the buyer is generally paying big money to generate one valid lead.

I was talking to my buddy today on the phone.

He told me about a fellow who buys leads that he knows. The guy works for a major corporation near where my buddy lives, and the guy told him that if he could generate good quality traffic in volume, that the guy's company would pay a lot of money for those leads -- $900 per qualified lead!!

The guy said his company pays Google Adwords $20 million per month for advertising to generate those leads it needs to keep the cash registers ringing!!

The guy also mentioned a company that is a competitor, that I am certain everyone in the United States has heard about, who pays $1000 per qualified lead.

You Can Make More Money IF you increase the quality and volume of the leads you generate!!

My point is that if you can generate better quality traffic in volume, then you can make more money from the leads that you generate for others!!

If you can increase the quality of leads you generate, you might be able to bypass a level or two of scrubbing, which in turn will increase what people are willing to pay you for leads.

If you can replicate that lead generation on volume, then you might be able to talk directly to the end-buyer of your leads.

It is not important that I share what industry my buddy's friend represents; it is the story that is important.

After all, I know off the top of my head maybe a dozen industries where companies pay several hundred dollars for scrubbed leads. BECAUSE in those industries, one transaction is worth several thousand or tens of thousands of dollars!!

My advice to all of you who truly want access to the big bucks available online....

Stop thinking about how you can make $20 or $100 this week, and start treating your online activities like it was a real business!! Because for a lot of people, this online marketing stuff is a real business, with the potential of driving hundreds of thousands to millions of dollars in yearly revenues.

If you are busy chasing $20 bills, you are missing the big picture!!


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