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How Does Lead Generation Make Money?

Table of Contents

Companies can make money from lead generation using methods to drive traffic to their website.

Let’s start with defining a lead, and then we’ll cover what online lead generation is, why you need lead generation, how you qualify someone as a lead, how to label lead types — such as sales qualified leads, how you generate leads, and why inbound lead generation is much more effective than simply buying leads.

What Is Lead Generation?

Many companies are starving for people who fit a specific profile, and they’ll pay good money to get their hands on the information they need to try and sell to that person.

A lead is a person or business that expresses interest in the products and services you promote by submitting their info, which is then used to follow up with them; to convert those leads into sales.

Lead generation is the process of attracting prospects to your business and increasing their interest through nurturing, all with the end goal of converting them into a customer.

Lead generation is not about providing the final paying client (although that is the end goal), but providing opportunities for potential clients who are usually qualified and charged based on cost per action (CPA).

The action could be filling out a web form, making a phone call, filling out an online survey, etc.

It is essential to keep up to date with lead gen methods, especially technological updates or algorithm changes, but the service will always be necessary.

A lead gen business using the affiliate model generates a pretty passive income.

One of the intriguing things about the lead gen business model is that, unlike other affiliate sites, the lead gen site does not need to follow the affiliate model if you don’t want it to.

You could simply set up a deal with local business owners in your area or even outside of your area in other cities.

Suppose you ever plan on selling your lead gen model website.

In that case, the affiliate model is typically an easier migration process, though there are obvious benefits to going it on your own, as your payouts will be higher.

The downside is that your payment system will potentially be less streamlined.

Start filling your sales pipeline today

What Is Web Traffic?

The only way to generate leads is by driving web traffic to your link. There are two main types of web traffic, organic and paid traffic.

Organic Traffic

Organic traffic is traffic that you generate for free via a blog, YouTube channel, Instagram account, etc.

The problem with organic traffic is that if you want more results, you need to put in more hours to create content, build links, and wait for Google to assess your site authority.

Paid Traffic

To boost traffic and get more leads, you may also consider investing in paid advertising.

Paid traffic is traffic gained through paid ads that you pay for on a platform like Facebook, YouTube, Google, or Snapchat.

If you want to scale, you simply increase the ad spend budget with paid traffic.

Blogging alone may seem the way to go when starting out because it’s a free organic traffic method. However, it’s unlikely to succeed when done alone.

The lead generation business model using paid traffic is relatively simple.

Your goal is to spend less money to generate a lead than the affiliate program pays in commission.

Social media ads can help you drive more traffic to your business and increase your results.

For example – let’s say that you are getting paid $10 / lead for an auto insurance company; you should be aiming to spend $8 or less on paid ads per lead.

The difference in cost between ad spend and commission is your profit margin. In this example, the profit was $2 or 20% net ROI.

In paid lead generation strategies, you need to pay close attention to one major factor – lead quality.

What Is A Lead Generation Business?

Almost every business in the world needs a constant stream of new clients.

This business model, which generates leads or potential clients for local businesses, can be applied across endless niches and locations.

This means there is a potential for this business to be highly profitable, fairly passive, and totally scalable.

The lead gen business model can be lucrative. Still, it can also be very passive if you are using organic traffic sources, primarily similar to those found with AdSense or Amazon affiliate sites.

However, there are quite a few aspects to understand when running a lead gen business.

A lead generation business sells qualified sales leads to clients (other businesses) who want more customers.

Essentially, a lead generation business is a broker between their clients and people who match their clients’ ideal customer profiles.

The start-up costs of a lead gen business are low. Besides purchasing a domain and web hosting, you don’t need to invest in many additional costs.

You can use SEO and backlinking to rank your page highly on search engines, driving free traffic to your site.

If you can buy or build a successful lead gen site for one client or offer, there is nothing to stop you from doing the same again.

Once sites are built and ranked highly, they are reasonably passive to maintain. This means you could efficiently run several at a time to maximize your income and profits.

If you decide to go down the paid traffic route, you may need to budget for this down the line.

Depending on the affiliate offers or the direct partnerships, there could be thousands of new locations where lead gen website owners can grow.

A lead generation business is a fantastic way for anyone with practical sales and marketing skills to offer a valuable service to other businesses with proven demand.

Some lead gen websites become so big that they convert over to becoming a directory in and of themselves.

This is especially true for those monetizing the lead gen website with direct clients versus affiliate offers.

You don’t need to build a product, can use tried and tested strategies, and don’t need to reinvent the wheel to see results.

You should create and implement a strategy outlining how to make all aspects as smooth as possible.

This should include things like handing over payments to the buyer or handling any existing clients that are renting your site.

Targeted Traffic

While targeted traffic is vital in any business model, it is especially important for a lead gen business model.

Since most lead gen websites are not covering every single area that the offer is available in, someone wanting to grow their lead gen site significantly just needs to find all of the locations where their specific offers are available and build those pages.

If your lead gen offer is for a carpet cleaning service in Ney York, but you are offering that to traffic looking for carpet cleaning in Anchorage, Alaska, your offer won’t convert.

Moreover, unlike affiliates like AdSense, which have unlimited offers, and Amazon, with millions of offers, there are few lead gen offers.

This gives you fewer options, especially when targeting hyperlocal traffic with your offers.

If you run a site with an education theme or where people are of the age to be thinking about attending school, you could be in a position to collect leads, or some basic level of information that these online schools require.

For example, the online education industry is looking for candidates interested in attending school through one of its online campuses.

While they do a great deal of marketing themselves, they also turn to other sources to generate qualified leads, and they pay good money for it.

A lead is simply a bit of information about a person, usually in a specific target demographic, that you can sell to an interested party, in schools with online education programs.

Leads generally pay well. Better than most other types of income.

If you run a targeted site and deliver quality leads, you can make great money if you pick the right programs.

Furthermore, if you choose to go direct and sell this site later, the migration process to the new buyer could be a big hassle.

One of the excellent benefits of targeting local searches with lead gen offers is that the competition will be less fierce than if you were building an average affiliate website.

It also makes every town, city, and locale a unique niche for your specific offer, which is pretty cool.

Related Offers

It is unlikely a website has expanded into every local area with its offer. Even if they have, they could want to add a second offer.

In any case, this is a tremendous growth strategy for most lead gen websites.

Suppose you can find an offer related to your offer or even adds value to the original offer.

In that case, you might be able to create new content around this offer in all of the local areas your website is already featuring.

Your related offer does not exactly need to be location-based, either.

Larger Profits

One of the pros of lead gen businesses is finding and reaching out to find customers yourself.

The main upside of this method is that you can charge a lot more for your service. You can charge monthly retainers to your clients who will gain leads from your website.

It’s a great way to make money online.

Evergreen

Another great pro of lead gen businesses is that they are a pretty evergreen model. Small and medium businesses will always need new clients.

With hundreds of millions of small businesses globally, a figure that is only growing, there will always be a demand for lead generation.

Selling Lead Gen Websites

For someone looking to diversify their income, lead gen websites often make a lot of sense. Their uniqueness can make lead gen websites very alluring to prospective buyers.

One thing to note here is that you will have to give the buyer access to the proof of earnings as with any other business you wish to sell.

Acquire An LLC

As you’re going to be reaching out to companies and dealing with leads and clients’ details, you should set up a business entity, like an LLC.

We strongly advise against running any lead generation campaigns without the protection of an LLC.

If you need to hire people to help you run your company, you can hire full-time employees, or work with contractors and freelancers for specific tasks.

Start filling your sales pipeline today

Can Companies Buy Leads?

Marketers and salespeople alike want to fill their sales funnel — and they want to fill it quickly.

Buying leads, as opposed to organically generating them, is much easier and takes far less time and effort, despite being more expensive.

But you might be paying for advertising anyway, so why not just buy leads?

Finding companies willing to pay for leads is one of the biggest problems a new marketer has to overcome.

However, in reality, this is the easiest step, the simplest way to find lead gen offers to promote as an affiliate is through an affiliate network.

How Can You Earn Money With Leads?

Lead gen sites vary, but generally, you earn money for every lead you generate for one of your client companies. It is important to note that no sale is being made in this process.

The most effective strategy to earn money with lead generation is to send the highest quality leads possible.

There are various methods for qualifying leads, but the two most important variables in creating quality leads are the targeted audience and the ad copy.

You want to ensure that your advertisements are being seen by people who fit your target demographic and are interested in what you’re advertising.

What Is An Affiliate Network?

An affiliate network is an online program that connects companies with marketers so they can generate sales and leads for them, at an agreed-upon cost.

Affiliate networks often have hundreds of offers for marketers to promote in one place, allowing you to pick and choose what you want to promote – based on the offer and the commission available.

Many choose to leverage affiliate marketers to generate leads, paying a fixed price for every lead they generate.

Anyone can join an affiliate network and start promoting offers, making it very easy to generate leads in exchange for a commission.

Lead generation is one of affiliate marketers’ most powerful strategies.

But collecting leads (email addresses of subscribers), affiliates can build huge lists of followers and build multiple relationships over time.

You don’t need to schedule pitch meetings with companies to offer your services, asking if you can generate leads for them.

You can just log in to the affiliate network, pick a lead gen offer and start generating leads and getting paid without talking to anyone.

Once you find a lead gen offer to promote through your chosen affiliate network, the next step is to start generating leads so you can start getting paid.

How Has Lead Generation Changed?

Potential clients and customers are constantly bombarded with advertisements. Because of that, you must take a different approach when implementing lead generation strategies.

It’s not enough to simply represent your company. Instead, you need to portray yourself as the customer’s representative.

The Affiliate Model vs. The Direct Model

The direct model is more hands-on than the affiliate model, so not best for someone looking for a passive income.

General outreach will take more time and effort to secure and budget time for client communication.

The affiliate business model is a passive model that involves little involvement from you.

If you go the affiliate route, you are limited to the offers and campaigns available on the affiliate platforms.

You will be supplied with a unique personal URL from the affiliate program for each offer you choose to promote. Whenever someone becomes a lead through your link, you will get paid.

If you do want to go the affiliate route, there are a slew of affiliate programs you can find that is all about pay per lead offers, such as:

  • QuinStreet

  • Campus Explorer

  • RingPartner

QuinStreet and Campus Explorer qualify their leads by having the leads fill out forms, but RingPartner is slightly different.

How To Start Cold Emailing

You’ll need a domain for your cold emailing efforts. It’s nice to have a dedicated domain for your cold email.

If your email address ever gets blacklisted, it won’t affect how your emails to existing clients and contacts are delivered.

To start, create a list of prospects using tools like Sales Navigator. Verify those emails to ensure they’re not going to bounce. You can do this inside QuickMail.

Then, write personalized emails to each one. You can use an email template for your emails, but it’s good to personalize each email if you want more conversions.

Offer Free Tools

Not all of your site visitors are ready to talk to your sales team or see a demo of your product.

Someone at the beginning of the buyer’s journey might be interested in an informational piece like an e-book or a guide.

In contrast, someone who’s more familiar with your company and near the bottom of the journey might be more interested in a free trial or demo.

Generate More Leads With Explainer Videos

The best thing is that the explainer video increases the likelihood of purchase by a whopping 85%.

So, any prospects who see your explainer video would be 85x more likely to turn into a customer.

Rewards Program

Give your existing customers referral rewards such that they would be motivated to reach out to their friends and generate high-quality leads and customers for you.

Local Client Takeover

While they mainly talk about building lead gen websites directly for clients who then rent those sites, their process works whether you decide to do direct partnerships with local businesses or go the affiliate route.

While affiliate marketing is different than lead generation, there is still a lot of overlap between the two models.

Some of the better lead gen programs that will pay you out also operate similarly to an affiliate offer or network.

Different Marketing Strategies

When you first start your lead gen agency, you’ll focus on one or two channels.

In most cases, this will be cold email and LinkedIn outreach because they have low upfront costs compared to ads.

But, once you’re making money, reinvest into other marketing channels.

If you can identify and close clients using cold email, you can try and turn those same value propositions into Facebook Ads.

Over time, you’ll have a flywheel of strategies that work together.

Make A Landing Page

Your website needs to be focused on creating the perfect environment to generate sales, and the homepage is not a good place to do this.

Alternatively, you can create a specific landing page that your advert leads to.

Most landing page converts visitors into leads by offering the prospects something of value to them for free of cost.

The only criteria are that you have to give your email address to get that free but valuable stuff.

This ensures the customer’s focus is retained and that everything on that page is geared toward selling your product. In addition, you can have multiple pages for different kinds of customers.

Facebook Ads

Facebook Ads are a simple and effective way to generate leads.

When Facebook Ads was launched in 2007, and its algorithm favored paid advertising accounts, there was a significant shift in how businesses used the platform to capture leads. Facebook created Lead Ads for this purpose.

You’ll need to spend money to get started, but once you find a formula that works, you can slowly scale it up and have a predictable way to generate leads.

Facebook Ads work well for local lead generation because it’s simple to define your target audience. You can direct your leads to a landing page, or use Facebook lead ads.

Your call-to-action can say, “Add your details to get a callback from us,” Anyone who needs your clients’ services will be happy to do so.

What Is Word of Mouth Advertising?

Word-of-mouth is useful, but it is limited. You can’t control the message, and you can’t be sure that your target audience will even hear the message.

Online lead generation helps you target specific audiences interested in your products.

How Can You Start A Lead Generation Business?

Once you become profitable promoting a lead gen offer with paid traffic, it is time to scale up. This means increasing your ad spend so you can make more net profit.

If you are spending $100 per day on ads with at least a 20% net profit margin, you should make it a goal to increase your ad budget to $1,000 or even $10,000+ per day.

Then you can start making some real money.

Eventually, you want to build a team of experienced media buyers – increasing the amount of testing you can do, boosting the number of campaigns you do, and boosting the number of campaigns you can run simultaneously.

This can be done with remote workers, or by building an in-house team within your own digital agency.

Anyone can become an excellent media buyer with the proper training, and, in some cases, it is better to hire people with the right attitude and give them the necessary skills the succeed.

Optimize And Rank Your Website

Search engine optimization (SEO) is key to successfully improving and growing your lead gen website. This can help you rank highly and drive more traffic and leads to your site.

Also, never underestimate the power of high-quality backlinks from others in the industry.

Episerver

 

They use web content reports for lead generation, collecting six pieces of information from prospective leads. Episerver provides an excellent example of what to ask for in a lead gen form.

Start filling your sales pipeline today

What You Should Know

At its core, all a lead gen business does is generate leads for a specific business or company.

There are many different ways that businesses generate leads.

They might run their ad campaigns in-house or rely on an ad agency/lead generation company to do everything for them.

Many choose to leverage affiliate marketers like me to generate leads, paying a fixed price for every lead they generate.

Wherever you are at, whether thinking of creating your lead gen sites from scratch, improving your existing ones, buying a lead gen business, or selling yours, make sure you choose the right strategy and make smart moves.

Overall, a low-cost, high-profit model, is a fantastic way to make money online and build your online empire.

Make A Few Thousand Dollars Using Kennected

High converting landing pages and an effective opt-in form can help generate leads. But Kennected has a solution that’s better than all the rest.

Kennected is a SaaS startup company specializing in lead generation through the most used professional social media — LinkedIn.

We provide online courses for navigating our #1 product Cloud Kennect. If generating hundreds of leads monthly sounds satisfactory, start a lead generation strategy today with Kennected!

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