How do i work out the value of a local lead?

14 replies
Hi all, how would i work out the value of what a local lead is worth? It is for a local plumbing business?
#lead #local #work
  • Profile picture of the author segman
    The value is whatever you can get paid for it. Pretty simple. Work with the owner of the shop and work out a deal where you make something to continue to generate leads for him.
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    • Profile picture of the author homeriscool
      what if you dont have a buyer in mind yet? and what sort of name would you use for a lead gen site? would you use an EMD or a brand name?
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      • Profile picture of the author DABK
        If you were looking for a plumber, which would attract you the most
        NewYorkPlumber.com
        BobsNewYorkPlumbing.com
        BobsPlumbing.com
        WeFixItFastPlumbing.com

        Think like the client you want to attract. I have sites with both. In my case, it makes no difference where the emd is based on a good keyword (mortgage broker new york not as good as mortgage broker in new york or new york mortgage broker and chicago best windows.

        Originally Posted by homeriscool View Post

        what if you dont have a buyer in mind yet? and what sort of name would you use for a lead gen site? would you use an EMD or a brand name?
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  • Profile picture of the author Teampixume
    Local market is always a good way to to earn you can use your resources well in the local market and handle it well
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  • Profile picture of the author Jason Kanigan
    Originally Posted by homeriscool View Post

    Hi all, how would i work out the value of what a local lead is worth? It is for a local plumbing business?
    YOU don't. Your prospect does. It's their business.

    http://www.warriorforum.com/offline-...uch-again.html

    Ask them. What's your average service call worth? If they want to view leads as a commodity, tell them thanks and that you'll move on. And do. If they won't open up and share something of the truth with you, move on.
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    • Profile picture of the author kenmichaels
      Originally Posted by segman View Post

      The value is whatever you can get paid for it. Pretty simple. Work with the owner of the shop and work out a deal where you make something to continue to generate leads for him.

      That is just wrong, on sooo many levels. It is ideas and advice like
      that cause real lead / list brokers to have such a bad reputation.


      Originally Posted by Jason Kanigan View Post

      YOU don't. Your prospect does. It's their business.

      http://www.warriorforum.com/offline-...uch-again.html

      Ask them. What's your average service call worth? If they want to view leads as a commodity, tell them thanks and that you'll move on. And do. If they won't open up and share something of the truth with you, move on.

      Leads are a commodity. There is no getting around that. I understand
      what your saying ... and for most things I agree. However, not when it
      comes to selling leads.

      There is a universal fair market value for just about every niche.

      Anyone who uses leads for their niche already knows what the
      low to high threshold is. ... That is based on how much info the lead
      has, how qualified, what the market bares and a myriad of other things.

      Op do some due diligence. Finding out what the lead is worth
      should be done before you ever make contact to who you plan
      on selling them to. Keep in mind, what it is worth ... is not
      what everyone is willing to pay.

      There are cowboys out there that will sell a .50 lead for whatever they can
      those guys don't get a whole lot of repeat business. When the "sucker"
      finds out ... and they will eventually ... your name and reputation will be ruined.

      Leads are a huge .. huge business. If you set things up properly ...
      from the beginning, your will business will exponentially grow ...
      bigger then you ever imagined. If you don't ... it can crash and burn
      before you ever get it off the ground.
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      • Profile picture of the author Jason Kanigan
        Originally Posted by kenmichaels View Post

        Leads are a commodity. There is no getting around that. I understand what your saying ... and for most things I agree. However, not when it comes to selling leads.
        I think you're assuming things about your market. Like they understand lead generation. There are plenty of companies out there who do not.

        Say you have a plumber. Ask what their typical call-out service billing is. Now you have something to base your lead price on.

        If you have crap or really basic leads, then your leads are worth 50 cents.

        If you have highly qualified leads, which pre-sell the prospect on doing business with your client, then you have leads that are worth much more.
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        • Profile picture of the author kenmichaels
          Originally Posted by Jason Kanigan View Post

          I think you're assuming things about your market. Like they understand lead generation. There are plenty of companies out there who do not.

          Say you have a plumber. Ask what their typical call-out service billing is. Now you have something to base your lead price on.

          If you have crap or really basic leads, then your leads are worth 50 cents.

          If you have highly qualified leads, which pre-sell the prospect on doing business with your client, then you have leads that are worth much more.
          leads sell from a quarter of a penny to thousands of dollars per.

          Are you telling me that a plumber that has been in business for a while
          does not know what a lead is worth? Does not know what his average ticket is?
          Does not know what his return vrs cost is?

          Of course they do.

          Anybody that sells anything ... knows. Unless your dealing with a
          new business or an unskilled business owner.

          Anybody that sells anything ... doesn't have to be sold on buying leads.
          They know what leads are worth. They know they can buy, sell and trade them.

          They only need to be sold on "the seller"

          Are the leads what they say they are.
          Are they able to produce the quality / quantity they say.
          Are they going to resell the same set over and over to competitors

          ect ect.
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          • Profile picture of the author Jason Kanigan
            Originally Posted by kenmichaels View Post

            leads sell from a quarter of a penny to thousands of dollars per.

            Are you telling me that a plumber that has been in business for a while
            does not know what a lead is worth? Does not know what his average ticket is?
            Does not know what his return vrs cost is?

            Of course they do.

            Anybody that sells anything ... knows. Unless your dealing with a
            new business or an unskilled business owner.

            Anybody that sells anything ... doesn't have to be sold on buying leads.
            They know what leads are worth. They know they can buy, sell and trade them.

            They only need to be sold on "the seller"

            Are the leads what they say they are.
            Are they able to produce the quality / quantity they say.
            Are they going to resell the same set over and over to competitors

            ect ect.
            Actually many businesses have NO IDEA what their costs, average revenue per customer and many other stats are. And many are certainly NOT on the up-and-up on marketing and sales methods. Things must operate much better in Florida than in the rest of the country.
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            • Profile picture of the author Claude Whitacre
              Originally Posted by Jason Kanigan View Post

              Actually many businesses have NO IDEA what their costs, average revenue per customer and many other stats are. And many are certainly NOT on the up-and-up on marketing and sales methods. Things must operate much better in Florida than in the rest of the country.
              That's my experience as well. I don't think I've ever presented my online marketing program to someone who could tell me their average customer value, average ticket, or cost to acquire a new customer.

              They know their monthly sales, usually by department. That's about it.

              And selling them on the ideas of knowing those figures is hard enough, I no longer put forth the effort. I just let them guess, so I can show a profit on what I do....based on their "guesstimates".

              When I would speak at the convention for vacuum cleaner retailers, I would talk about these figures. I've met one dealer who knew these figures....yup, a multi-millionaire.

              Nobody even tracked which ad pulls in how much money....Of course, these are small business owners. Medium sized businesses with layers of management may have all those figures.
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  • Profile picture of the author kenmichaels
    Why do sales people make things so difficult?

    Lets make it simple:

    Have you ever in your life ever met some one ( other then a child ) who did
    NOT know what a lead was?

    When some one sells some thing. They sell it for a price. Lets say they sell it
    for $40.00.

    Well they know they cant buy leads for $40.00.

    They also know what they pay for the product before they sell it.
    So lets say they pay $10.00. sell it for 40.00.

    assuming they have no additional costs.( like employees ) they know they
    cant pay more then 30.00 per lead.... max. to break even.

    Breaking even is the holy grail if you have a back end product.
    Most small business owners don't.

    If they have employees then they have additional costs. Now do they all know
    all that off the top of there head ... no. but most have a pretty good idea.

    I never met anyone who did not know what the profit was for the product they were
    selling.
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    • Profile picture of the author Claude Whitacre
      Originally Posted by kenmichaels View Post

      Why do sales people make things so difficult?

      Lets make it simple:

      Have you ever in your life ever met some one ( other then a child ) who did
      NOT know what a lead was?

      When some one sells some thing. They sell it for a price. Lets say they sell it
      for $40.00.

      Well they know they cant buy leads for $40.00.

      They also know what they pay for the product before they sell it.
      So lets say they pay $10.00. sell it for 40.00.

      assuming they have no additional costs.( like employees ) they know they
      cant pay more then 30.00 per lead.... max. to break even.

      Breaking even is the holy grail if you have a back end product.
      Most small business owners don't.

      If they have employees then they have additional costs. Now do they all know
      all that off the top of there head ... no. but most have a pretty good idea.

      I never met anyone who did not know what the profit was for the product they were
      selling.
      Ken; Everyone that sells anything know how much profit they make on what they sell. We were talking about different questions than that.

      If you are talking to direct marketers? Sure, they have most of those figures. But a small business owners, with a brick and mortar business?

      Ask a small business owner "What is the lifetime value of a new customer?", and you'll get a blank stare.

      They can take a guess at heir average ticket. And they know how much business they do. But ask "How much do you spend, to bring in each new customer?" and most won't know. Direct marketers know, you know, I know, but not most small business owners.

      The examples you gave have math. You did the math, and you can do it in front of a client. But most small business owners have never asked themselves "How much can I spend on a lead and still make money?".

      But you're right, language matters. I was talking about exact figures, not guesses. I just work with their guesses. It comes out just as well.
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      • Profile picture of the author homeriscool
        Well this turned into quite a conversation and thanks for all the comments and tips guys. so i really need to do my homework on this by the looks of things, and narrow things down....
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  • Profile picture of the author kenmichaels
    Every business owner is a salesperson.
    ( whether they want to be or not, whether they know it or not )

    Sales people tend to forget that. They might not know all the fancy names
    "us" marketers give to things ..like ROI ... but they aren't dummies.

    They know it, just in a different language then we do.

    Best way to sell another salesman ... learn his language. Then you don't
    have to jump through so many hoops ... like explaining why they need to buy leads.
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