How to decide what to charge for leads?

33 replies
Are any of you using the model of selling leads? Basically create a website and sell the leads to local businesses. If so, what's the best way of determine how much to sell each lead for?

I know it depends on the life value of a customer. But do you simply ask the business owner what that value is? Are they usually honest with you? If so, is there a formula for determining how much to charge for a lead?

And what do you do if a business owner says they'll only pay for leads that actually buy something?

Thanks.

Mike
#charge #decide #leads
  • Profile picture of the author ADukes81
    I look at the CPC and multiply it by 100. I then divide it by 8-10 (8-10% call - generous). I typically think 1 out of 4 calls convert.

    Let's say $5 CPC

    $5 *100 = $500
    $500/9% = $45/lead

    Basically they are paying $180 for a new customer.

    No, you are providing leads (calls) to their business, if they can't close, it's not your fault. Do NOT do it this way, it doesn't work.
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    • Profile picture of the author TheShark
      If you are selling real leads and they are not closing - then teach them to close and they'll buy the leads from you forever...first hand experience.

      TheShark
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    • Profile picture of the author Amsterdam81
      agree with you! but again, some leads "that actually" buy something, that depends on how targeted/ how good your telemarketers closed the sales eventually.

      cheers


      Originally Posted by ADukes81 View Post

      I look at the CPC and multiply it by 100. I then divide it by 8-10 (8-10% call - generous). I typically think 1 out of 4 calls convert.

      Let's say $5 CPC

      $5 *100 = $500
      $500/9% = $45/lead

      Basically they are paying $180 for a new customer.

      No, you are providing leads (calls) to their business, if they can't close, it's not your fault. Do NOT do it this way, it doesn't work.
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      • Profile picture of the author 512 Designs
        Originally Posted by ADukes81 View Post

        I look at the CPC and multiply it by 100. I then divide it by 8-10 (8-10% call - generous). I typically think 1 out of 4 calls convert.

        Let's say $5 CPC

        $5 *100 = $500
        $500/9% = $45/lead

        Basically they are paying $180 for a new customer.

        No, you are providing leads (calls) to their business, if they can't close, it's not your fault. Do NOT do it this way, it doesn't work.
        That's an interesting way to figure it out. But don't you have to also determine what the price of the product or service is as well? What if (in your example) the new customer is only worth $100 (let's say it's a carpet cleaning business or something that's not all that expensive to have done)?

        Originally Posted by JMB Marketing Group View Post

        Mike, if this doesn't make sense to you, then let me know by PM; I'll explain it better.
        Sending you a PM. Thanks.

        Originally Posted by huwagkukurap View Post

        what are leads?
        Really?
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  • Originally Posted by 512 Designs View Post

    Are any of you using the model of selling leads? Basically create a website and sell the leads to local businesses. If so, what's the best way of determine how much to sell each lead for?

    I know it depends on the life value of a customer. But do you simply ask the business owner what that value is? Are they usually honest with you? If so, is there a formula for determining how much to charge for a lead?

    And what do you do if a business owner says they'll only pay for leads that actually buy something?

    Thanks.

    Mike
    Hi Mike,

    Those are SIMPLE questions to answer (they're simple TO ME as I've spent many, many years in the trenches -- learning and implementing these things)!

    Yes, absolutely there's a formula to KNOW what the life time value of a customer is. THAT IS YOUR LEVERAGE, your selling leverage in order to have a business INVEST IN YOU! If you can "teach them this", then you will be considered "THEIR GO-TO MARKETING EXPERT"!

    Therefore, once YOU know how much a company pays for advertising divided by the the number of customers they receive, then they'll know how much money it costs them to ACQUIRE 1 CUSTOMER! Which is certainly more than the cost of a lead that you're suggesting!

    Mike, if this doesn't make sense to you, then let me know by PM; I'll explain it better.

    Cheers,

    JMB
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  • Profile picture of the author huwagkukurap
    Banned
    [DELETED]
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    • Originally Posted by huwagkukurap View Post

      what are leads?

      With all due respect, spend some time reading up here, instead of posting useless posts about "what is"?!

      I'm saying that as that ain't gonna get you any where here!

      JMB
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  • Profile picture of the author ADukes81
    Hi Mike,

    That is why I use the Google Keyword Tool to get an estimate on the CPC. I use this formula to show the client the cost of going with Google Adwords vs. Me. 8-10% is too generous. I have a spreadsheet that does the numbers for me and I was on a different computer (lst night when I wrte the above reply) and was going off memory. I'll outline it a little better below;

    A customer to a carpet cleaner is worth a lot of money! It's about $17 per click in Vegas, so...

    Using Google Adwords


    $17*100 clicks = $1,700
    $1,700/4 = $425 per new customer (4% is pretty high, it's more like 2%)

    I typically divide the above number by 4 and let them know I'll do it for 1/4 of what Google will charge.

    I did this for a personal attorney (not per lead, but broke it down this way). It was about $70 PER CLICK. SO I said....

    $70 * 100 clicks = $7,000
    $7,000/4 = $1,750 per new client (avg PI case is $4k - $8k taking an avg of 9 months) They are willing to pay that amount, obviously.

    He pays me monthly, not per lead, but last month with the calls we generated for him, he paid about $50 per call.

    Close 1 in 4 and that is $200 per client.

    Much cheaper than the $1,750 above.

    And now that I laid all that out, I realized something...I need to up my prices.
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    • Profile picture of the author mrtrance
      Originally Posted by ADukes81 View Post

      Hi Mike,

      That is why I use the Google Keyword Tool to get an estimate on the CPC. I use this formula to show the client the cost of going with Google Adwords vs. Me. 8-10% is too generous. I have a spreadsheet that does the numbers for me and I was on a different computer (lst night when I wrte the above reply) and was going off memory. I'll outline it a little better below;

      A customer to a carpet cleaner is worth a lot of money! It's about $17 per click in Vegas, so...

      Using Google Adwords


      $17*100 clicks = $1,700
      $1,700/4 = $425 per new customer (4% is pretty high, it's more like 2%)

      I typically divide the above number by 4 and let them know I'll do it for 1/4 of what Google will charge.

      I did this for a personal attorney (not per lead, but broke it down this way). It was about $70 PER CLICK. SO I said....

      $70 * 100 clicks = $7,000
      $7,000/4 = $1,750 per new client (avg PI case is $4k - $8k taking an avg of 9 months) They are willing to pay that amount, obviously.

      He pays me monthly, not per lead, but last month with the calls we generated for him, he paid about $50 per call.

      Close 1 in 4 and that is $200 per client.

      Much cheaper than the $1,750 above.

      And now that I laid all that out, I realized something...I need to up my prices.
      How come you are using 100? Is that just an example of the average number of clicks?

      So based on your equation you are saying that if that PI attorney is using adwords and they get 100 people to click on their ad that they will only convert 4 of those 100 people into real clients which equates to spending $1,750 to acquire each client correct?

      But if you setup a a lead gen site which is ranking high on first page and have a forwarding number on the site that tracks number of calls/leads they get from it you charge him only $50 per call at the end of month based on how many calls were sent to him? So if he got 30 calls that is $1500 to you and you're saying that he should convert do at least 1 in 4 of those calls then we would get roughly 8 new clients from just spending $1500?

      But I'm confused then with your adwords calculation. So with those numbers you are saying 100 will click, but only 10% of those will actually call the client and then of those he should be able to convert 1 in 4 of them...so maybe 2 clients and spending like $7K?

      If you can clear it up for me that would be great. Thanks.
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  • Profile picture of the author FreeLeadsKING
    512 Designs --- my method is this. I check with Service Master rate sheet and see what they are paying today for leads per service/industry...lets say $25 then being that they will be the only person that I give the leads to I will multiply it my 2-4 times... it varies per industry. But in short I would not sell a lead less than $50 if they are charging $25 at Service Master/Magic. If it is a high paying customer to them I will use the 4 times number ...$100. Hope that made sense.
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  • Profile picture of the author eguinan
    I think it depends on how "warm" the leads are. I have worked in the lead industry for many years. If they are cold leads, that maybe demographically targeted but must be contacted via mail, email or phone to test interest and "sold", they are usually pennies a lead. If they are coming to a website or already expressing and interest they are worth quite a bit more. Insurance leads can be sold for $10-$20 per lead.

    Bottom line for me is...how close they are to an actual sale and how high the dollar amount of the end sale. I do believe there is a HUGE market out there for qualified interested leads gathered online.
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    • Profile picture of the author pvijeh
      Originally Posted by eguinan View Post

      I think it depends on how "warm" the leads are. I have worked in the lead industry for many years. If they are cold leads, that maybe demographically targeted but must be contacted via mail, email or phone to test interest and "sold", they are usually pennies a lead. If they are coming to a website or already expressing and interest they are worth quite a bit more. Insurance leads can be sold for $10-$20 per lead.

      Bottom line for me is...how close they are to an actual sale and how high the dollar amount of the end sale. I do believe there is a HUGE market out there for qualified interested leads gathered online.
      $10 to $20 per lead sounds pretty low here, given that CPC are often multiples higher than that. I would think more like $100 to $200 per lead.
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  • Profile picture of the author redcell1
    I charge anything that is over a 2 minute phone call. Usually business owners can tell if a person is a potential client or not. You can charge by sale but realize that if they suck at selling then your not going to make much money.
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  • Profile picture of the author Adwizard
    I think allowing a client to pay you only for sales would be a terrible idea, therefore it is imperative to charge per call period. I think it's an even worse idea though to come up with a number by yourself in the formula for the clients closing ratio.

    You need to allow your client to help you come to this number by asking the right questions here. I have never worked with a client that told me that he was no good!!! If asked what the chances are of a new customer getting a good product or service and returning for more they always want to puff their chests out and tell you how good they are! Most will almost always over estimate their own closing ratios so let them tell you... and bada-boom, bada-bing your leads just became worth more money in their eyes too!!!
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    • Profile picture of the author Jgregory
      My own experience and same-same for my coaching clients...

      Change your strategy. Don't sell leads.

      Local Lead Buyer's Breakdown

      Hot Lead Buyers - insurance agencies, mortgage brokers. Always hungry, always a hassle if you sell them "Leads"

      Local Contractors- they want a chance to give out a Bid or Estimate. Always hungry, most are a problem when you sell them "Leads".

      Local Business Owner with a Promotion Budget - all local businesses want to grow and make more money. Some put together the equation that "new customer" equals new revenue. Most are not sure what a "lead" is... and they don't care. They want the doors to swing open and the phone to ring. Prove you are doing that on a case-by-case basis and they will pay you.

      The point is don't sell Leads. Sell traffic. Traffic they don't know how to get on their own. The issue with "leads" is defining a common definition you can both accept. And even if you get close, they will want to weasel out of it later on. Sell traffic instead.

      Negotiate a price to send them phone calls from interested prospects for their business. Prove it with call tracking. Negotiate a price for walkin customers, by proving that a customer is your effort with a code to get a special deal in the store.

      There's always one 'big thing'" in a strategy that makes it work... a must-have ingredient list... here it is...

      + Prove your results first. Choose your client, not the other way around. Almost always its the largest, best business in the niche promoting their businesses. Generate the phone calls, and send them to your best choice. Don't sell. Just tell.

      "Hey, I'm getting all sorts of phone calls from karate students on my website network... would you like me to forward those students over to your phone number?" Easiest cold call you'll ever make. The natural response is... "What's the catch, why are you doing this?"

      "Well, it looks like you are the best karate school around... and when these parents are calling for a school... I just figure the best thing for their kids is starting right with the best teachers. So there's not a catch or a gotcha to this... take the phone calls, and if this works well for you... maybe we can talk about an arrangement to keep them coming all the time. I may have hit on something here with my internet networking.
      "

      + Then later you negotiate and offer your one and only Karate School customer an Exclusive Geographical territory. That business gets all the leads for XYZ Niche in their trading area... can be a city or a suburb. That's your close. Give them some time to think it over... a day or two

      Done. Now move on to another geo-location and do it again, or startup a new niche.

      Best Regards,
      Jan Gregory

      P.S. My radical marketing strategies are simple... focus on creating willing, eager buyers. Less work, less hassle, more money.
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      • Profile picture of the author mrtrance
        Originally Posted by Jgregory View Post

        My own experience and same-same for my coaching clients...

        Change your strategy. Don't sell leads.

        Local Lead Buyer's Breakdown

        Hot Lead Buyers - insurance agencies, mortgage brokers. Always hungry, always a hassle if you sell them "Leads"

        Local Contractors- they want a chance to give out a Bid or Estimate. Always hungry, most are a problem when you sell them "Leads".

        Local Business Owner with a Promotion Budget - all local businesses want to grow and make more money. Some put together the equation that "new customer" equals new revenue. Most are not sure what a "lead" is... and they don't care. They want the doors to swing open and the phone to ring. Prove you are doing that on a case-by-case basis and they will pay you.

        The point is don't sell Leads. Sell traffic. Traffic they don't know how to get on their own. The issue with "leads" is defining a common definition you can both accept. And even if you get close, they will want to weasel out of it later on. Sell traffic instead.

        Negotiate a price to send them phone calls from interested prospects for their business. Prove it with call tracking. Negotiate a price for walkin customers, by proving that a customer is your effort with a code to get a special deal in the store.

        There's always one 'big thing'" in a strategy that makes it work... a must-have ingredient list... here it is...

        + Prove your results first. Choose your client, not the other way around. Almost always its the largest, best business in the niche promoting their businesses. Generate the phone calls, and send them to your best choice. Don't sell. Just tell.

        "Hey, I'm getting all sorts of phone calls from karate students on my website network... would you like me to forward those students over to your phone number?" Easiest cold call you'll ever make. The natural response is... "What's the catch, why are you doing this?"

        "Well, it looks like you are the best karate school around... and when these parents are calling for a school... I just figure the best thing for their kids is starting right with the best teachers. So there's not a catch or a gotcha to this... take the phone calls, and if this works well for you... maybe we can talk about an arrangement to keep them coming all the time. I may have hit on something here with my internet networking.
        "

        + Then later you negotiate and offer your one and only Karate School customer an Exclusive Geographical territory. That business gets all the leads for XYZ Niche in their trading area... can be a city or a suburb. That's your close. Give them some time to think it over... a day or two

        Done. Now move on to another geo-location and do it again, or startup a new niche.

        Best Regards,
        Jan Gregory

        P.S. My radical marketing strategies are simple... focus on creating willing, eager buyers. Less work, less hassle, more money.
        So you are pretty much saying that once we have a site ranked high and we have a forwarding number on there to the best business in that niche, send them a few calls at first and then call them up and sell them on "traffic" or "calls" instead of using the term "leads"?

        But what is the difference if we call it leads, phone calls, traffic, new customers, etc.as long as they get a new customer contacting them from our effort of ranking that site and having that forwarding number there?

        Maybe I'm not understanding your rationale here and if that is the case please let me know so that I can learn.
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        • Profile picture of the author dewar32
          I think what he means is basically. Local businesses see leads as buying customers where by calling it traffic means anyone contacting through your funnel. What i have found is most local businesses understand leads but not so much traffic so a bit of education on your part could be needed. Hope this helps.
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          • Profile picture of the author Jgregory
            Originally Posted by dewar32 View Post

            I think what he means is basically. Local businesses see leads as buying customers where by calling it traffic means anyone contacting through your funnel. What i have found is most local businesses understand leads but not so much traffic so a bit of education on your part could be needed. Hope this helps.
            Yes. That's it. Never underestimate the power of words.

            "One man's meat is another man's poison." ~Tom Jones in Henry Feildings famous book.

            Words have many underlying connotations and the word "Lead" is so subjective there must be 1000's of viewpoints on what a "lead" is. I choose not to join that debate with prospects.

            All marketing success is in the framing... in creating a persuasion framework. You have the power to create any framework you wish... and you should to suit the vagaries of the niche.

            Word Descriptions become name labels in framing. And I have the opportunity to use the words I choose and the words allow me to frame the references as I need... to move a deal forward to a willing buyer.

            Another point... small local businesses not in the habit of paying for specific customers... need some time to get used to the idea. Better to let them "discover" the in-bound traffic/lead-gen concept by getting some phone calls and signing up a few new customers. That part... everyone gets.

            And you'd be surprised... many small business owners are so clueless/obstinate that even after getting a few new customers they balk at the idea you want remuneration. If they do, we don't fight about it... we just move on with your exclusive offer.

            Best Regards,

            Jan Gregory

            P.S. Yes. We call it Lead Generation in the classroom, and we say 'phone calls' and 'traffic' and other things to the prospects.

            P.P.S If your talking mortgage leads, re-fi, debt reconsilidation niches... those folks know "leads" and will talk all day long. For me and others, those markets are highly competitive to rank for even locally... and "selling the leads" takes on big proportions. As others advice indicates. A site for dance studios, horse riding lessons, music lessons... a smaller field and easier to deal with the owners who seem to prefer a monthly fee to get your "proven phone traffic". I believe that's what the OP had in mind with a rent-a-site model
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      • Profile picture of the author Mitsakis
        Originally Posted by Jgregory View Post

        There's always one 'big thing'" in a strategy that makes it work... a must-have ingredient list... here it is...

        + Prove your results first. Choose your client, not the other way around. Almost always its the largest, best business in the niche promoting their businesses. Generate the phone calls, and send them to your best choice. Don't sell. Just tell.

        "Hey, I'm getting all sorts of phone calls from karate students on my website network... would you like me to forward those students over to your phone number?" Easiest cold call you'll ever make. The natural response is... "What's the catch, why are you doing this?"

        "Well, it looks like you are the best karate school around... and when these parents are calling for a school... I just figure the best thing for their kids is starting right with the best teachers. So there's not a catch or a gotcha to this... take the phone calls, and if this works well for you... maybe we can talk about an arrangement to keep them coming all the time. I may have hit on something here with my internet networking.
        "
        That's some great advice here Jan. Thanks.

        Originally Posted by Jgregory View Post

        "would you like me to forward those students over to your phone number?"
        Who would say NO? Seriously.

        I will definitely try your method. The only problem is that I am not a native English speaker but I hope with a lot of practice I will learn to speak over the phone.
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        .
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      • Profile picture of the author maricelu
        That is EXACTLY what I am looking for. May I use this script?
        Originally Posted by Jgregory View Post

        My own experience and same-same for my coaching clients...

        Change your strategy. Don't sell leads.

        Local Lead Buyer's Breakdown

        Hot Lead Buyers - insurance agencies, mortgage brokers. Always hungry, always a hassle if you sell them "Leads"

        Local Contractors- they want a chance to give out a Bid or Estimate. Always hungry, most are a problem when you sell them "Leads".

        Local Business Owner with a Promotion Budget - all local businesses want to grow and make more money. Some put together the equation that "new customer" equals new revenue. Most are not sure what a "lead" is... and they don't care. They want the doors to swing open and the phone to ring. Prove you are doing that on a case-by-case basis and they will pay you.

        The point is don't sell Leads. Sell traffic. Traffic they don't know how to get on their own. The issue with "leads" is defining a common definition you can both accept. And even if you get close, they will want to weasel out of it later on. Sell traffic instead.

        Negotiate a price to send them phone calls from interested prospects for their business. Prove it with call tracking. Negotiate a price for walkin customers, by proving that a customer is your effort with a code to get a special deal in the store.

        There's always one 'big thing'" in a strategy that makes it work... a must-have ingredient list... here it is...

        + Prove your results first. Choose your client, not the other way around. Almost always its the largest, best business in the niche promoting their businesses. Generate the phone calls, and send them to your best choice. Don't sell. Just tell.

        "Hey, I'm getting all sorts of phone calls from karate students on my website network... would you like me to forward those students over to your phone number?" Easiest cold call you'll ever make. The natural response is... "What's the catch, why are you doing this?"

        "Well, it looks like you are the best karate school around... and when these parents are calling for a school... I just figure the best thing for their kids is starting right with the best teachers. So there's not a catch or a gotcha to this... take the phone calls, and if this works well for you... maybe we can talk about an arrangement to keep them coming all the time. I may have hit on something here with my internet networking.
        "

        + Then later you negotiate and offer your one and only Karate School customer an Exclusive Geographical territory. That business gets all the leads for XYZ Niche in their trading area... can be a city or a suburb. That's your close. Give them some time to think it over... a day or two

        Done. Now move on to another geo-location and do it again, or startup a new niche.

        Best Regards,
        Jan Gregory

        P.S. My radical marketing strategies are simple... focus on creating willing, eager buyers. Less work, less hassle, more money.
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        • Profile picture of the author Jgregory
          Originally Posted by maricelu View Post

          That is EXACTLY what I am looking for. May I use this script?
          Yes, of course.

          Originally Posted by JanGregory

          + Prove your results first. Choose your client, not the other way around. Almost always its the largest, best business in the niche promoting their businesses. Generate the phone calls, and send them to your best choice. Don't sell. Just tell.

          "Hey, I'm getting all sorts of phone calls from karate students on my website network... would you like me to forward those students over to your phone number?"

          Easiest cold call you'll ever make. The natural response from the owner is... "What's the catch, why are you doing this?"

          "Well, it looks like you are the best karate school around... and when these parents are calling for a school... I just figure the best thing for their kids is starting right with the best teachers. So there's not a catch or a gotcha to this... take the phone calls, and if this works well for you... maybe we can talk about an arrangement to keep them coming all the time. I may have hit on something here with my internet networking.
          "
          Yes, of course. Use it. And this pretty much works just the way it's typed here. But put it in your own words.

          Best Regards,

          Jan Gregory
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  • Profile picture of the author beeswarn
    Originally Posted by 512 Designs View Post


    And what do you do if a business owner says they'll only pay for leads that actually buy something?
    I tell them to get serious and tell me when any other advertising medium offered them the same terms.

    Then I tell them that if they will agree to independent third party verification, then I will agree to sell them the leads that way. (This works very well real estate and mortgages, for example, where the public records will reflect that your lead bought a property. They will agree to these terms.)

    If they don't or can't agree to that, I make the presentation again or I move on to a good prospect. Sometimes both.

    If you will work to generate the lead and make the sale, you don't need the client. All you need is the inventory and you can begin competing against the client. Let them know that. It helps them see how valuable your service is to their competition.
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  • Profile picture of the author localvseo
    Everyone has their own strategy for pricing leads. Having dealt with a number of different industries in the lead generation business over many years, I really don't think there is one size fits all for every business. I have found that it really depends on the industry. For instance, contractors are used to buying leads, so they get the idea and if they are big enough probably already know what they can pay. You can always ask what they are currently paying, or have paid, and then see how you can provide a better service (e.g. exclusive leads, custom branding etc.). Go in knowing what you need or want to make and figure out a way to make it a win-win. My goal is long-term partners that will stick with me for years, not decide it's not worth it and then I am hunting for a new client.

    I also deal with a lot of companies that have never bought leads before. For various reasons, I don't just send leads and then try to sell them. I pick my niches carefully and then find a client first. It's a personal preference for my business model and have not had a hard time finding the right companies to build a relationship with. At any rate, what I do when they have never bought leads is actually run through all the numbers with them. Pretty simple to do.

    Here is my model for pricing leads for a long-term relationship. My guess is you may be able to get more if you set the price and go sell them without going through this. I think the opportunity cost may be high as you could be looking for new clients on an on-going basis. This method is something that I have found is a good one for starting a relationship out as a true business partnership that will benefit both businesses equally and lead to long term success for both if managed correctly.


    First, figure out the value of the client over the life of the relationship for the business (if they don't know this then may want to consider a different client as this should be data all business owners should know). It is not crucial they tell you this if they are not comfortable, if not, that's ok you skip to step 2 and still be able to come up with a number, but makes it a little harder to come up with a solid number, so you really should have some data from step 2 handy.

    Second, we then discuss what they can pay to acquire this customer. It will vary greatly by industry, so you need to do your research and be able to provide guidance on what the industry norm is. If you can't find any data, you will probably need to do more analysis with the client to try and determine this. But you should know ahead of time your cost to provide the leads and what profit margin you want as a starting point.

    Third, here's the most important step, you need to figure out what their real close rate is. Many people greatly over-estimate this number. To ensure the numbers work, have them try and pull data to back up their number as this will determine what they can pay and if they will stick with you long term. If they have an updated CRM this should be fairly easy to do. Otherwise this will take a little time to have them look through records or other info they have. It sounds time consuming, but it's very, very important you try and get this as close as possible to accurate.

    Last, once you have vetted the close rate, work backwards from the lifetime value of the client, use the close rate and data from the industry to figure a win-win cost per lead. So for example. If they determine that a client is worth $10000 to them, and they are willing to pay $1500 to acquire a client, then work backwards from there. Let's say you both determine that they can close 10% (to make it easy) of their leads. So they should pay you $150/lead ($1500/10). Now you have a number and you will then need to decide if that will work for your strategy.

    This is a very different approach than a lot of people I have seen posting on the forum. However, it does a few things:
    a) builds a high-level of trust between the two parties
    b) sets up a strong relationship as the business owner has gone through the exercise of why you need to charge what you do and they understand that you are willing to work with them to make it feasible for them to grow
    c) shows you really understand the lead generation business. Data is a very valuable piece of information in business, and this model is really breaking down the true cost of leads and creating a win-win.

    Something to think about as you determine pricing.
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  • Profile picture of the author mrtrance
    Localvse and others that are doing lead gen,

    The way you guys are doing your lead gen models is by ranking a site in a niche with content that is generic and having a forwarding # on there plus a strong call to action message to get people to call,once they visit the site?

    Does anyone also have a contact form on there or response rate is too low on that and we should just have phone #a few places wirh a strong CTA?

    Any feedback?
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    • Profile picture of the author Jgregory
      Originally Posted by mrtrance View Post


      The way you guys are doing your lead gen models is by ranking a site in a niche with content that is generic and having a forwarding # on there plus a strong call to action message to get people to call,once they visit the site?

      Does anyone also have a contact form on there or response rate is too low on that and we should just have phone #a few places wirh a strong CTA?

      Any feedback?
      I like to include several option for contact and all of this is trackable to prove to the client who generated the traffic...

      Phone #
      Fax #
      Voice Mail #
      Email capture


      Spotlighting a lead capture using a webform works okay when it fits the niche... every marketing effort should be an Offer. If the particular niche can support an Offer for any of these, then Webforms work for these Offers/Fulfillment

      Appointments
      Meetings
      Consulations
      Lessons

      And the added benefit is nurturing the lead along in "education niches" with an AR series.

      Best Regards,

      Jan Gregory
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      • Profile picture of the author 512 Designs
        Thanks to everyone with their replies.

        Jan, I never thought about using the term "selling traffic". That's an interesting twist on the lead generation model. But I have the ability to send individual leads to a client automatically. Would your "selling traffic" still work with individual lead payments, or do you still recommend charging a set price per month?

        localvseo, Nice post on how to create relationships and making the client see what you're leads are worth. Thanks.

        I've discovered throughout my years on WF that it can be a double edged sword.

        Just when I think I have my plan of attack figured out, I post some questions here to get your opinions.....and then 3 or 4 more ideas or improvements get posted. I think that's a major cause of my paralysis by analysis. Not that it's a bad thing.

        Mike
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        • Profile picture of the author Jgregory
          Originally Posted by 512 Designs View Post

          Thanks to everyone with their replies.

          Jan, I never thought about using the term "selling traffic". That's an interesting twist on the lead generation model. But I have the ability to send individual leads to a client automatically. Would your "selling traffic" still work with individual lead payments, or do you still recommend charging a set price per month?

          Mike
          Hi Mike,

          To be clear... I would not say "traffic" to the prospect or client. Nor would I necessarily say "leads". That little phone script I included is all that's needed in my experience. It's like the tasting booths at Costco... they are staffed by low-skilled people but they work like gangbusters to boost sales. Lizard brain marketing at work. That phone script is the same concept.

          There are two distinct business types for lead-gen opportunities in my experience...

          1. This one has a vocabulary that includes "leads" and they have a basket of connotations for their own meaning. these are typically high transaction businesses. Home improvement for example. While they might pay more for a "lead" they also give you a lot of maintenance and headaches usually. Since they will pay more, they want more. They will argue about "qualified leads" 9 ways to Sunday.

          2. The other type is small time local businesses that depend on acquiring new customers... and usually that is by a inbound phone call. There are literally 1000's of this type in every large city, but only a few of the #1 type. These #2 businesses have been the bread-and-butter for Yellow Pages for 50 years.

          So, everything I've said on this thread is concerning #2 type. Lower monthly revenue stream for you but they are low maintenanc, less hassle, loads of prospects, and loads of different niches to build funnel sites.

          So, when you are thinking strategy, there are two to choose here... one focuses on Leads and the other focuses on Phone Call traffic.

          What happens here on the forum... everyone gets their head locked down on a concept. So, once the WSO sold about a Rent-a-Site or once we start talking about Lead-Generation or Lead-Gen websites... we all get stuck.

          I recommend getting un-stuck. Look at your own situation and think Outside the Box. Choose what works for you.

          What I'm talking about is just my favorite strategy... but I can do both. My choice and the same for you. There is never one best solution for everyone.

          Best Regards,

          Jan Gregory
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    • Profile picture of the author localvseo
      I don't have time to go into the whole thing at this point. I plan on starting a thread this week that hopefully will be a wiki of sorts that will help with this. In the meantime, I do put forms on all my sites. While a phone call is one of the best ways to get that CTA, not everyone calls for a number of reasons (e.g. someone surfing at work may not want to be heard doing personal things in the office).
      Second, for B2C clients, they may be searching when your client is closed. I would rather have someone fill out a form and have my client try to get back to them the next day than a hangup, which could happen if they don't wait around for the voice mail. No answer can easily translate into dialing down the search results until they find that guy that has calls forwarded to his cell and answers the phone at 9 at night, and your lead is gone.

      At the end of the day, I don't think there is any one size fits all solution to this. You have to figure out who your customer is, do some research on what works best through trial and error and then address it. For me I am constantly researching and trying out new ways to get leads. In the many years I have been involved in operations, sales and marketing, I have learned if you don't evolve you die, so I keep that in mind constantly while building my business.


      In terms of the CTA message, I use things such as Call Today, Call for a Quote, Schedule an Appointment Today etc. I try to keep it under 4-5 words. Nothing too out of the ordinary.


      Originally Posted by mrtrance View Post

      Localvse and others that are doing lead gen,

      The way you guys are doing your lead gen models is by ranking a site in a niche with content that is generic and having a forwarding # on there plus a strong call to action message to get people to call,once they visit the site?

      Does anyone also have a contact form on there or response rate is too low on that and we should just have phone #a few places wirh a strong CTA?

      Any feedback?
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  • Profile picture of the author Stephen B
    I've found the simplest way to do this is to create the website, get it ranked and generating phone calls then pass on these phone calls to a local business that is not ranking well in the search engines and is paying for Google Adwords.

    Once I've passed them on a few leads I simply negotiate an agreement based on their business. I don't worry too much about trying to get the maximum rental for the leads as I want to build a long term relationship and end up doing all their online marketing.
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  • Profile picture of the author plainwords
    Originally Posted by 512 Designs View Post


    And what do you do if a business owner says they'll only pay for leads that actually buy something?
    I've come in late on this thread but have a situation right now where a real estate company is offering to pay me commission - but only on leads that convert to a sale.

    Their offer is 3% of the sale price of condominiums, which would be quite decent amount. But the downside is that it could take 3 months for the lead to turn into a sale. And also I have no control over the sale process other than providing the lead.

    Would anyone recommend going for this? They say they're not willing to pay per lead - claiming "too much risk" for them.
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  • Profile picture of the author focusedlife
    @JGregory - Thanks for sharing all of your clear expertise and wisdom.

    First thread i couldn't suck myself away from, lol.

    I'm currently getting back into growing my local bread and butter customer base after trying my hand at more strictly online stuff.

    The local clients have money and as long as you have a system in place to both get them and service them...that's where the non headache dough seems to be at (in my guestimation).

    Underwear entrepreneurs are quite possibly the worlds worst customer base, if they make up yours...

    While I'll always be tempted by the bright and shiney...I think its important to stay the course and hunker down, narrowly, especially if you're getting into offline...its gold...it gets boring sometimes but its gold.

    Wonderful dialogues...thanks again.

    Regards

    Los
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  • Profile picture of the author Matt Lee
    Lot of good information here, I don't normally sell leads to clients but I've often wondered how you would valuate each lead. This is good stuff here.
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  • Profile picture of the author trader909
    Banned
    if it's a verified billionaire desperate to invest $100m+ tomorrow it's worth bit more than some get rich quick i.m looking or a $5 ebook.
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  • Profile picture of the author trader909
    Banned
    amen to that

    The local clients have money and as long as you have a system in place to both get them and service them...that's where the non headache dough seems to be at (in my guestimation).

    Underwear entrepreneurs are quite possibly the worlds worst customer base, if they make up yours...
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