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Is Lead Generation Business Profitable

Lead generation is an effective way to get potential customers, clients and patients to remember your business. Many people do not actually like doing the marketing for their business and this is all too common. The important thing about lead generation is that it allows you to appeal to a new set of customers who would have never heard about your business otherwise. If you are running a business of your own, there are a number of reasons why lead generation can be very beneficial for you.

Lead generation can be considered as an easy way to start up a business because you will not have to invest any money on the product that you are going to sell. When you are dealing with a lead generation business, all you will do is generate leads, which means that people will contact you based on your ad. Although this kind of business can be considered as one of the easiest ways to run a company, but it still needs ample amount of groundwork in order for it to become successful.

You can become a lead generation business owner to earn money in your spare time. A lead generation business is one that sends out salespeople to seek out new clients for their business. After the salesperson has found a client and found out about their needs, they then sell these leads to salespeople for other businesses at a later time. Being in this type of business does require some experience and skill, but there are some lead generation businesses that don’t require these skills for you to still make money from them

If you are running your business as an entrepreneur, then surely you have come across the term called lead generation. One thing that people think while they understand the concept of lead generation is that it is nothing but to collect a contact information from potential customers. But all this might not be true. Here, I am going to share some insights about lead generation through the types of content.

Are lead generation businesses profitable?

Your lead generation business can be very profitable if you can find the right margin between your cost to acquire leads and the price you sell the leads for.

There are 500+ successful lead generation companies currently listed on Clutch. Many of them have over 1,000 employees, which is a clear sign lead generation businesses can be lucrative and scalable.

To find the right profit margin and build a lucrative lead generation agency, you need to think carefully about:

  • the target audience you plan to sell leads to (we already spoke about this)
  • the pricing model you want to run with
  • the lead generation channels you wish to leverage

Lead Generation: The Basics

According to HubSpot, lead generation is the process of attracting and converting strangers and prospects into someone who has indicated interest in your company’s product or service. Some examples of lead generators are job applications, blog posts, coupons, live events, and online content.

In colder terms, it can involve pulling lists of prospects that match your target profile and persona.

Lead Gen Costs

There are several costs that can be associated with lead generation:

  •  Media agencies and operations: the costs to hire an agency for your lead gen efforts
  •  Media placement and distribution: the cost of paying external sources such as Facebook and LinkedIn for your ads
  •  List purchases: the cost of buying or hiring third parties to receive or generate lists
  •  Campaign creation: the internal costs of developing an effective marketing campaign
  •  Incentives: Reward costs e.g. discounts, sending gifts

And no doubt many more additional costs from the management of any campaign, to the cost of hiring and training a team to run it.

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Calculate COST PER LEAD (CPL)

CPL or Cost Per Lead is the most utilized metric out there.

Formula: Total dollars spent on marketing / # of leads from the campaign = ROI (Boom)

No MBA needed here!

Marketing Campaign CPL = $16,000 / 500 = $32

Below you will find some CPL Calculators that will save you some time in making the calculation yourself:

Average Cost Per Lead

On average, the cost per lead in 2019 was $198. However, cost per lead differs widely depending on the industry, your target market and of course the competition in your sector. 

Let’s dig deeper into these numbers and the cost influencing factors:

Average Cost per Lead by Industry

IndustryCPL Ave
Finance$160
Technology $208
Healthcare $162
Manufacturing$136
Travel and Tourism $106
Retail $34
Education $5
Telecom $45
Marketing $99
Consumer Products $105
Media and Publishing $10
Non Profits $31
Business Services $132

How is Lead Generation Different from Advertising?

An advertiser relies on another platform to simply show a brand or company to as many eye balls as possible.

They get paid for generating the reach or impression, not the actual customers generated.

Business owner takes more risks here, because whatever the biz spends on an advertising campaign there’s no guarantee that they’ll produce a ROI (Return on Investment)

It might even produce zero customers.

With a lead generation service, at least the business gets to talk to a customer that they can potentially close.

Why the lead gen business is so sexy to be in?

No headaches of having to deal with staff, equipment, rent, insurance, manual labor, liabilities.

that’s a lot of overhead…

But with lead gen, especially if you know how to generate leads using websites, you virtually have no overhead.

Which makes lead gen infinitely more scalable.

A lot of big companies today are simply lead gen companies.

Ok so where do I go to generate leads?

In order to have a legit lead generation business.

You have to go where customers are at.

Today people no longer use the phone book.

When you need a dentist, a plumber, house cleaning…

Where do you go?

Most people will go to Google and type in a search.

You’re most likely gonna click on the search results near the top.

Either an Ad, Map Listing or a Website below.

This is where you want to place yourself.

Generating Leads with Paid Ads?

When you generate a lead with a Facebook ad you’re interrupting someone and trying to convince them to buy something, something that they weren’t even seeking. (interruption marketing)

It is much harder to convert these types of customers.

Of course there’s a time & place for paid ads, but if you want to generate the highest value leads for a business.

Google’s organic traffic is king. It is customers that are seeking you out. (Attraction marketing)

The Power of Being Able to Generate Organic Leads from Google

I simply learned a skill of creating various digital properties and ranking them in Google’s search engine.

Here’s one of my tree service site I built back in 2015 stilling making me $2000 per month. I haven’t touched this site in years.

The only on-going expense on this site is $15 per month for the tracking phone number, $10 per month for hosting, & $15 per year for the domain.

To initially rank the site, I probably put in about $500 over 6 months.

These profit margins are unheard of in most other biz.

I own over 60 of these sites out there generating leads & making me money everyday.

Amazing Scalability

These websites are essentially virtual bill boards, to have a top ranked site is the same as having a billboard in the most busiest part of town, which is worth a lot of money to local businesses.

This business is extremely scalable because the process is repeatable.

My income continues to grow as I build more and more of these virtual billboards.

3 Simple Steps

step one - survey the land
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Step 1: Survey The Land (Niche Selection)

“Riches are in the Niches”

is our motto.

Its true. There’s over 50 niches we can go into and thousands of cities to choose from. That means there’s so many markets out there that’s so easy to dominate that its like taking candy from a baby.

Finding a market with good search volume and weak competition is the key.

Some Niche Ideas:

Carpet Cleaning

Event Rentals

Plumbing

Junk Removal

Wedding Videographer

HVAC

Window Cleaning

House Painting

Tree Removal

There’s over 50 local lead generation niches we can get into. 

Every single one of these businesses need leads everyday.

We like targeting cities with population of 75K to 250K

Remember: You only begin getting good volume of leads when you crack the top 3 spots in Google.

Now couple things we are gonna wanna look into to approximate the power levels of our competition

  • Citations
  • Backlink Power & Relevance
  • Keyword Optimization
  • Homeadvisor Lead Value
  • Site Layout (On-Site Optimization)

This is a really important part of the process.

I’ve been doing it since 2014 so I’ve become really good at analyzing my competition and finding low hanging fruit markets that I can easily dominate…

I use tools like SEO Quake and Ahrefs to see what kind of SEO will be required to outrank my opponents

There’s probably 15 things we look at but I’ll just share 2 of them right now.

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You usually google the main keyword + city like above.

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If there’s a listing in the top 3 map pack with no website, that’s an example of low hanging fruit.

Now these opportunities might be rare, but at any case, when you build superior ranking skills specifically for local, you’re not worried about 95% of the companies out there.

For example if there’s 2 listings in the top 3 map pack with 15 reviews of less, I’m confident I can outrank them although the # of reviews isn’t the only factor for ranking.

If all top 3 map listing has huge amount of reviews like you see above, then I’d rather just go find another niche or market.

Here’s what I mean. I looked up the top company: “Lake Orion Plumbing Heating & Cooling” their site is lophc.com and I pulled them up on Ahrefs.

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Referring domains 43

This shows that this site has 43 other websites pointing a backlink to the site, each of those links are votes that’s helping that site rank.

You can also use ahrefs toolbar to quickly find the amount of backlinks…

These are what I don’t wanna see..

I’d much rather find markets with a lot lower RD (“Refferring Domains”) like these…

So the # of RD, is one indicator to see how competitive it is. But not every link was created equal.

Some links carry more power & worth. I can beat a site with 43 links with 10 powerful links if his links are weak.

Once you know how to look at 15 different factors that Google takes into account when it comes to local rankings, you become like a sniper that knows exactly what needs to be done to take out 95% of the competition & get the top ranks all day every day.

More on this later.


step two - build out assets
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Step 2: Build Out Assets

First we must buy a domain. I picked grlimos.com (gr short for Grand Rapids)

In 2021, exact match domains are working very well still. These are domains with our main keywords in the domain & for local lead gen that would be “service” + “city” for example:

  • springfieldtreeservicepros.com
  • detroitplumbersdrain.com
  • chicagoroofingcontractorspro.com
  • Having a city + name domain establishes your site as the go-to business for your area in eyes of Google (and customers, too). This authority goes a long way in establishing overall legitimacy of your site.
  • Speeds up the overall ranking process.
  • If you want to expand, you’ll need to make more sites. You’re essentially limiting yourself to one site per city. If expansion is on your list of plans, consider using a more generalized name (legacyplumbingservice.com, for instance).

If the city is over 150,000 population I do think its worth targeting that city specifically with a city in the domain as I do think it helps with dominating the search engine when you have the city & service in domain.

Then, we use Weebly to build out our sites.

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It’s a very simple click & drag type of builder…no coding necessary. Just drag different elements you want on the page…easy money.

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Essential Tip:

Slap a tracking phone number (we have our own proprietary software) that records every call and attaches a whisper message so that every time our clients pick up the phone they’ll hear…

“This lead was sent to you by Ippei”, at the beginning of every call.

This is important because it lets the business owner know right away who’s sending them the leads.

Make sure the phone number is big & easy to see at the top of the site.

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We also like to include a quote form somewhere near the top of the homepage as well.

We must also build:

  • Google Map listing
  • Key citations & directories

step 3: optimize your assets
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Step 3: Optimizing Your Assets

A website doesn’t bring in traffic unless you rank it.

What people call SEO.

There’s on-page optimization and off-page optimization.

Off-page optimization is where real skill is involved. This is where investing in some high-level coaching becomes paramount because I’ve yet to see any top level SEO’s share their secrets for free.

To make it simple to understand here’s how SEO works in general.

Getting to the top of Google’s search is a popularity contest.

Imagine you’re that brand new kid at High School.

No one knows who you are.

You have no credibility.

But then imagine the most popular kid at the high school, the star quarterback vouches for you.

Tells everyone “Hey this is my boy, he’s cool”

Now your credibility went up and all your peers at high school will think highly of you now.

That’s an example of receiving a highly authoritative back-link from another quality site.

Now imagine another scenario: instead of the star quarterback kid, another brand new kid at the school tries to vouch for you.

Shouting at the top of his lungs “HEYYYY This is my friend!!! He’s legit!!!”

But since he’s new as well, no one knows who he is. Everyone’s like “Who are those two idiots?”

That’s an example of a low quality backlink.

If you want to consistently outrank your competition in the lead generation business, you better have a process & know how of generating powerful, high-quality relevant backlinks to your site.

The star quarterbacks, and yes we know how to get ’em.

No need to re-invent the wheel. Just model after what’s already working.

Conclusion

Lead generation is the process of finding potential customers for your company’s products and services. Lead generation is an important aspect to any business, because it allows you to connect with new leads that you can then follow up with.

Yes, lead generation is an incredible business to get into. Why? Generation of leads also is a low-risk business. Once you have the experience and product for lead generation, there is no need for a high investment since you only pay for your product and service. Then, it becomes a question of how many leads are good or how much profit can be made. As simple as all these sounds, finding a quality business that makes money without fail is almost unheard of.

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