Should I lease my local website or sell the local leads?

I just set one up yesterday for pest control in my area. I'm having the calls forwarded from the number on the site (I used phone.com) to the pest control service I personally use. They pay $25 per referral (not lead). I called them and explained what I was doing, so when they get a call from someone looking for (website name), they'll understand it's coming from my site.

I figure I'll track the calls (dates, times, numbers) for a month, see what the company "credits" me with, then decide from there what will be more profitable for me. There's no way, I can see, of knowing exactly how many of those calls end up being customers, so I'll have to make a judgement call at the end of the month whether to continue with that strategy, or move on to a different pest control company and offer to rent the site to them. I'd inform them of the traffic it generated the past month.

Hey, I don't know exactly what I'm doing, or if it will be effective, but I'm taking ACTION, and that's the important part to me. Tweaking can always be done,.....

So, I'd say just pick a strategy and try it out. You can always adjust later.

From the perspective of the small business owner:

I REALLY like @rlhurst's concept because I don't have to spend money until I know I'm going to make money.

Second to that, my preference would be paying per lead - especially if I can "turn it on and off" (and assuming the leads are quality) because I'm only paying when the phone rings/lead comes in/etc (and I'll pay more if I'm the only one your sending the lead to)>

My last choice (on the surface anyway) out of the options given would be leasing the site, because I'm going to be paying for it every month whether leads come or not - BUT - if I'm a smart biz owner, this could be my first choice if it's generating a lot of leads and the cost per month works out to be a lower cost per lead (most small biz owners don't think this way though).

From the perspective of the marketer (you):

If I rank and lease the site, I know I got a fixed amount of recurring income each and every month. If the first biz I lease the site to opts out...I just find his competition. It's low maintenance and pretty well "hands off" - all you have to do is make sure it stays ranked and check to make sure the payments are coming in.

If I'm going to sell the leads to a SINGLE biz, it adds a bit of work and customer service to the equation. I now have to track and invoice based on leads provided, handle disputes where the customer said "I never got that lead" or "I'm not paying for it because it wasn't any good," etc, etc. This option has greater monetization potential than the build/lease - but it requires a bit more planning, setup and ongoing maintenance (not terribly difficult to do though).

You could also offer "shared" leads. For example, sell shared leads for $10 to "not more than 4 competitors" OR sell it exclusively for $30. Again, adds more monetization potential and a bit more planning, setup and maintenance (again, not to difficult).

And the greatest monetization potential is definitely in @rlhurst's approach - sell "referrals" and not just leads. I don't know a single business owner out there who wouldn't say "YES - I'll pay you for bringing me a CUSTOMER." But again, it requires yet another level of "hands on" participation on your part - not to mention a certain degree of TRUST with your client or a bullet proof system in place that prevents them from being able to "steal" referrals and not pay you either intentionally by saying, "yeah, I talked to that one but they didn't buy" when they really did OR unintentionally in a situation where a customer doesn't buy now...but does in 3 months and is "overlooked."

And with the "referral" model you could - as @KenMichaels suggested - get a % of the deal and increase your revenue potential even further.

To take that one step further, you could become an "outside sales agent" for the business as an independent contractor (and could develop it into a full fledged outsourced marketing/sales agency). In this case, you would generate leads, deliver quotes, close deals and "manage" the customer relationship on an ongoing basis. The advantage to this model is you get higher percentages up front (b/c your client has 0 customer acquisition cost) PLUS recurring revenue off each client rather than the one time referral. I haven't really seen a B2C market this would work well in (not enough recurring)...but then I haven't really looked either.

As far as the client (end user) is concerned, you are their point of contact with the company (your customer). In a previous business I had several "outside" salespeople that worked 2-3 days a week that I was more than happy to pay 6 figures a year.


So really, they are all great models with the potential of making a nice income. It really comes down to you deciding which approach best fits your objectives.

If you want a more complex process that makes more money but has greater risk (the trust factor) - referrals (fee and/or %) are the way to go.

If that doesn't work for you, and if you can invest a little time/effort into setting up, managing, billing and dealing with the occasional disgruntled customer that doesn't want to pay - selling leads is the path to take (shared and/or exclusive).

And if you want to "set it and forget it" (as a marketer you've got to love Ron Popeil) and just collect recurring monthly payments - then leasing sites is what you want to do.

From a monetization standpoint, what you can charge your customers for each (monthly lease, lead, referral, %) is going to vary based on the niche, the market size; the average transaction value (theirs); the lifetime value of the customer (again, theirs) AND of course - what a ready, willing and able buyer (yours) will pay.

I've got folks I work with that use all of the above. It really comes down to you defining your objectives and picking the one that works best for you.

Sorry to ramble on so long.

Hope that helps!
Mark

If you are going to do per lead, you have to track and have the leads come to you as well. If you are doing a lot of sites like that, that's a lot of work. I would say better to sell but that's just my humble opinion. I thought about leasing sites but I prefer just to have the business owner hire me and drive traffic to their site.

I have seen a lot of people try it. I am sure it can work. It sounds like an easy sell to business owners. But I think people often find it isn't so easy. I would line up the people you will sell it to first before you do any work.

If I had a heap of sites ranked for a local market I would lease them to one client (who has the money to spend) as part of a bigger marketing package.