Selling leads is a skill, and selling them for maximum profits is an art. Many lead-generating businesses miss out on this difference, leaving money on the table that should be in their pockets. It’s a missed opportunity that stings.
In this post, we’re diving deep into the world of lead selling. We’ll cover the basics and provide a step-by-step guide on how to sell high-quality leads for maximum profit. What we’re most excited about is sharing tips on finding the best leads and connecting with the right buyers. In return, all we ask is that you let us know how your profits skyrocket!
Table of Contents
What is Pay-Per-Lead Generation?
Pay-per-lead generation is a way for businesses to hire you on a contract basis. Your job is to help them with marketing by conducting research, running campaigns, attracting website visitors, and turning them into potential customers.
How do you get paid? It’s simple: you earn a fee for every lead you bring in, and the price is usually set in advance. To estimate your costs, you can check out the standard rates in the industry, which we’ll cover in the next section.
Now, it’s important to understand what we mean by “leads.” These are not just people who click on an ad. A lead is someone who shows a genuine interest in a product or service. They might, for example, create an account, fill out a form, or take a quiz – it depends on what the business considers valuable. Whatever action you’re aiming for is what you’ll get paid for.
Some businesses might want to pay for appointments, others for phone calls, and some just for email leads – it varies based on their needs.
Like any marketing model, pay-per-lead generation has its pros and cons. On the plus side, it saves time and money for both businesses and lead generators. Businesses avoid spending on visitors who won’t convert, and lead generators get paid for their efforts.
However, there’s a big challenge: many lead generators struggle with understanding marketing funnels and nurturing leads effectively. This can result in low-quality leads for businesses and fewer returning clients for lead generators.
How Much Can You Sell Leads For?
When it comes to selling leads, the price can range from $20 to over $500 per lead. The exact amount you can charge depends on several factors:
By Niche:
You can create and sell leads for different industries, from local home improvement services to tech companies.
Tech companies with high-priced products might pay a lot more per lead (hundreds or even thousands), while local businesses with lower-cost offerings might pay around $25 per lead.
Urgent needs tend to bring in more profits.
By Quality of Leads:
Lead quality matters a lot in pricing.
Quality is often measured by how likely a lead is to convert (closing potential) and how much money it can generate (revenue potential).
High-quality leads, those closer to making a purchase and with high revenue potential, can fetch prices up to 10 times more than low-quality leads.
For example, in the home improvement niche, a low-quality lead might sell for $20, while a high-quality one could go for as much as $200.
By Type of Buyer:
There are two types of lead buyers:
- End buyers: Businesses planning to sell their products or services to the leads. They pay the highest prices.
- Lead aggregators: Intermediary agencies that usually buy leads at a lower price.
Finding end buyers can be challenging, so starting with lead aggregators is often a more straightforward option, especially when you’re learning how to sell leads.
By Lead Costs:
Lead cost refers to what you spend to acquire each lead, including advertising, purchasing lead lists, outsourcing, or using lead generation tools.
Your lead cost should always be lower than the price you charge for the lead. For example, if you spend $10 on a Facebook ad to acquire a lead, aim to sell it to companies or lead brokers for $25 or more.
Keep in mind that lead costs also cover your labor and other expenses.
In general, it’s wise to minimize lead costs to maximize profits.
Where Can You Sell Leads?
When it comes to selling leads, you have a few options:
Local Businesses: You can sell leads to local businesses that operate in your niche. This can be a great way to establish relationships within your community.
Companies Buying Leads: Some companies specialize in purchasing leads from individuals or lead generation agencies. They often have specific criteria for the leads they’re interested in.
Online Affiliate Programs: If you prefer an online approach, consider affiliate programs. These programs allow you to earn commissions for referring leads to businesses through your website or marketing efforts.
To get the highest prices for your leads, it’s often best to approach end buyers directly. You can find these potential buyers in various places:
- Dedicated Social Media Groups: Look for groups related to your niche or industry on platforms like Facebook or Reddit. These groups can be a goldmine for connecting with potential buyers.
- Freelance Platforms: Websites like Upwork or Fiverr can be a platform for showcasing your lead generation services to businesses seeking leads.
- LinkedIn: Use your professional network on LinkedIn to connect with businesses interested in your leads. Many professionals on LinkedIn are actively seeking new opportunities.
- Lead Buying Agencies: There are agencies that specialize in purchasing leads. They often act as intermediaries between lead generators and end buyers. Connecting with these agencies can simplify the process.
So, depending on your niche and approach, you have several avenues for selling your leads, both locally and online.
How to Sell Leads: 4 Proven Steps
We’ve covered all the essentials for your lead-selling business. Now, let’s assemble them into a winning strategy:
1. Select Your Niche
Choosing the right niche is crucial for the success of your lead generation business. To simplify this decision-making process, follow these steps:
First, consider what makes you stand out to potential clients. It could be your deep understanding of the target audience, competitive pricing, effective marketing strategies, or a strong track record in lead nurturing.
Next, think about your passion or experience in the niche. Having a genuine interest or expertise in the field is essential because it helps you better understand your potential buyers’ needs.
Once you’ve narrowed down your niche, assess its profitability. This involves checking the average profits per lead, evaluating the volume of available leads, and determining whether the market is growing or shrinking.
To make informed decisions, gather data. Study your competitors, learn from their successes, read customer testimonials, and stay updated on industry trends.
Ultimately, selecting the right niche is the foundation of a successful lead generation business.
Step 2: Conduct Comprehensive Market Research
Market research is absolutely critical for your success in the lead generation business. It serves as your guide, from acquiring leads to selling them, and it has a direct impact on your profits. Here’s a more straightforward approach to conducting market research:
1. Research for Lead Generation
When researching for lead generation, your focus should be on:
- Identifying your ideal leads and understanding how they make buying decisions.
- Aligning your offerings with the wants and needs of these ideal leads.
- Learning how to approach prospects at various stages of their buying journey.
- Crafting messages that encourage prospects to move closer to making a purchase.
- Creating marketing campaigns that can upsell and resell to customers who have already converted.
- Finding ways to streamline the customer’s path to making a purchase.
2. Research for Lead Aggregators or End Buyers
When researching potential clients or lead aggregators, follow these steps:
- Identify potential clients, including their names and where you can find them, such as on social media platforms.
- Understand why these clients buy leads and what challenges they face when trying to find prospects directly.
- Determine how much these clients currently spend on leads and how you can offer more value.
- Consider what you can provide that would be attractive to them, especially reliable first-party data.
- Decide on the best way to reach out to them, whether through advertising, websites, word-of-mouth referrals, email marketing, or other methods.
- Calculate the costs associated with pitching your services and estimate your potential return on investment (ROI).
Market research might appear detailed and demanding, but it forms the bedrock of your lead generation business. Making a misstep here could set you back, so it’s worth investing time and effort into thorough research.
Step 3: Choose How You’ll Sell Your Leads
You’ve completed 70% of your preparation, but there’s one critical decision left: how you’ll sell your leads. There are five ways to go about it:
- Exclusive Sales: Sell leads to only one client.
- Shared Sales: Sell the same leads to multiple clients.
- Exclusive Sales with a Time Limit: Exclusively sell leads for a set period, then open them for sale to anyone.
- Self-Funded Leads: Generate leads with your own budget and exclusively sell them to one client, charging a fixed fee per conversion. Ideal for high-value niches.
- Client-Funded Leads: Generate leads using the client’s budget and earn a commission per conversion.
Selling exclusively can be highly profitable but comes with some risks. If you’ve done your market research well and have confidence in your leads, it’s a great option to consider!
Step 4: Generate Leads
Now that you’ve decided how to sell your leads, let’s dive into lead generation strategies. This involves driving web traffic to your clients, and there are two main ways to do it: organic and paid traffic.
- Organic Traffic: This is the free traffic you get from sources like blogs, YouTube channels, or Instagram accounts.
- Paid Traffic: Paid traffic comes from running advertisements on platforms such as Facebook, YouTube, Google, or Snapchat.
When I started my lead gen business, I leaned heavily on organic traffic because I had limited funds. However, it was slow and not very profitable. I was barely making money through organic methods.
Soon, I realized that to earn a substantial income, I needed to master paid traffic strategies.
The beauty of paid traffic is how quickly you can scale your campaigns. With organic traffic, scaling means putting in more hours creating content, building links, and waiting for search engines to recognize your authority. Paid traffic, on the other hand, scales simply by increasing your ad budget.
In the lead generation business using paid traffic, your goal is straightforward: spend less on generating a lead than what you earn in commission. For example, if you make $10 per lead for an auto insurance company, aim to spend $8 or less on paid ads per lead.
The gap between your ad spend and commission is your profit. In this example, you’d have a $2 profit, which means a 20% net return on investment (ROI).
Pros & Cons of Selling Leads
Before you jump headfirst into lead generation and sales, let’s pause for a moment to think about the pros and cons. If lead generation isn’t your cup of tea, you might want to explore alternative ways to earn money online.
Here’s a straightforward look at the pros and cons:
Pros:
High Income Potential: The more effort you put in, the more you can earn.
High Profit Margins: You can enjoy substantial profits per lead.
Zero Overhead Costs: Running this business doesn’t require a lot of overhead expenses.
Low Startup Costs: You can get started with minimal initial investment.
Growing Demand: There’s a growing demand for leads across various industries.
Simple & Flexible Selling Models: You have different selling options to choose from.
Relatively Recession-Proof: Lead generation tends to remain stable even during economic downturns.
Cons:
No Safety Net: Your income relies solely on your efforts, with no safety net.
Lack of Accurate Data: Inaccurate data can lead to higher churn rates.
Loads of Time Commitment: Building and maintaining lead generation can be time-consuming.
Price Negotiations: Clients may try to negotiate the price per lead.
Crowded Industry: The lead generation market is competitive and continuously growing.
How to Start a Lead Generation Business
Once you’ve achieved profitability by promoting a lead generation offer using paid traffic, it’s time to think big and scale up. Scaling up means increasing your ad spending to boost your net profit. For example, if you’re currently spending $100 a day on ads and maintaining a 20% net profit margin, aim to raise your ad budget to $1,000 or even $10,000+ per day. That’s when the real money starts rolling in.
As you expand, consider building a team of skilled media buyers. This step allows you to conduct more testing and run multiple campaigns simultaneously. You have two main options here:
Remote Workers: You can assemble a team of remote workers, offering flexibility and access to talent from around the world.
In-House Team: Alternatively, you can build an in-house team within your digital agency. The key is to find people with the right attitude and provide them with the necessary skills to excel as media buyers.
Building a strong team is a cornerstone of sustainable growth in the lead generation industry. So, I strongly suggest you to invest in training and nurture the right talents for your comapny.
Anthony Smith is an internet entrepreneur. He created the Side Hustle Ideas Database to help people find side hustles for making extra money, with the potential of turning into a full-time income.
After graduating from the University of Pennsylvania with a business degree, he gained business experience at a consulting firm. At the same time, he tried various side hustles including freelance writing, blogging, and eCommerce. He managed to turn his side hustles into a full-time business, earning over $3 million. Now, he enjoys financial freedom and travels around the world as a digital nomad.