What is Local Lead Generation?
Local lead generation is a local affiliate marketing service that supplies new customer leads to business clients. Using online and offline sources, the local lead generation company will acquire leads targeted to the client’s business niche and sell them to the business client.
Most often these are flat fee per lead agreements (like you will find with CPL lead affiliate programs), but there are other models as well. The other one that I use is the commission based model (where you get paid a percentage of the profit on a closed lead like CPS affiliate programs). There is also a hybrid model (the client pays for the ad spend and the leads) and the setup and maintenance model (get paid to set up and maintain lead gen campaigns only).
Leads are delivered to the client via email and/or phone via local or toll free tracking numbers.
Your local lead generation education starts here
Here are all the local lead generation resources that I have bookmarked over the last few years, more or less in the order that I found them. The links below cover the entire local lead generation business model, both the good and the bad.
- How To Make Money Setting Up Your Own Local Affiliate Program – Shoemoney
- Shoemoney Local Affiliate Marketing Guide (PDF)
- Cashing in on Cash For Clunkers With Myspace – Shoemoney
- Private lead generation with example – CDF Networks
- Create your own lead generation business – CDF networks
- 83 Proven Local Lead Gen Niches – CDF Networks
- Local lead generation to the next level – CDF Networks
- Tracking phone leads with Google Voice – CDF Networks
- Finding local lead generation customers – CDF Networks
- The Ugly Side of Local Online Advertising – Ad Hustler
- Local Online Advertising Case Study: Facebook Vs. Google Adwords – Ad Hustler
- Hell Has a New Name: The Local Online Advertising Media Buy – Ad Hustler
- Case Study: The Offline To Online Local Media Buy – Ad Hustler
- More Fun With Local Online Advertising Clients – Ad Hustler
- How I Generated $1,700,000 in Auto Sales Despite a Weak Economy – Ad Hustler
- Offline Billboard To Online Affiliate Offer Case Study – Ad Hustler
- The Twitter Local Lead Gen Machine – JonathanVolk.com Guest Post – Ad Hustler
- Pricing on Local Lead Gen Landing Pages – Ad Hustler – Ad Hustler
- LOLZERZ About Local Lead Gen – Ad Hustler
- $200 into $4,000? Local Lead Generation Can Be Very Profitable – Andrew Wee
- Local lead generation can give almost infinite ROI – Andrew Wee
- Scalable Local Leadgen Marketing For Cash – Smaxor
- Local Leadgen Niche Ideas – Smaxor
- Scaling Local Lead Generation – Amanda Orson
- Facebook Lead Generation for Local Businesses – PPC Blog
Below are the slides from Ad Hustler and Amanda Orson’s presentation Local Lead Generation – Heaven & Hell at Affiliate Summit West 2011. I didn’t go to ASW11, but the video is embedded below the slides. Eric Nagel posted a recap of the session at ASW11 Session Recap: Local Lead Generation.
Local Lead Generation — Heaven & Hell
The above video was a conference session titled Local Lead Generation — Heaven & Hell from Affiliate Summit West 2011, which took place January 9-11, 2011 at Wynn Las Vegas.
Local Lead Plan
I was waiting to see who was going to be the first to release an info product on local lead generation. So, when Chad from CDF Networks released his “Local Lead Plan” ebook last year, I got it right away.
This ebook covers every aspect of the local lead generation business. Everything is inside: top niches, landing pages, traffic sources, pay per call, tracking, billing, scaling etc…
I highly recommend this product for anyone that is serious about starting a local lead generation business outside of my area. I am also sure that all of the people that wrote the posts linked to above would tell you the same thing.
- 18 chapters, 115 pages, 23,000 words long. It’s a complete local lead gen education.
- Extremely low one time price.
- Covers everything from top niches, landing pages, traffic sources, pay per call, tracking, billing, scaling etc…
- The first of its kind course
- Local is the future of affiliate marketing
- Totally positive feedback and press
Additional local affiliate marketing thoughts
Below are some tips that I have learned and applied from the links above and a few things that I discovered through my own trial and error.
I have been doing local lead generation in one form or another since 2000. After being a Servicemagic affiliate for a few years and driving national leads to them for like $5 each, I built my own local lead gen system in 2005. The only problem with that was, during that time, where I live, everyone was so busy in the trades that nobody was interested in more leads or phone calls. Subsequently the local lead gen system got shelved and just sat idle. I have built alot of web projects on “spec” over the years and like irons in the fire, some get hot some do not.
Fast forward to the economic problems that started a few years ago. All of the sudden the people that I had talked with years earlier were coming out of the woodwork contacting me saying: “Hey Darren, We’re kinda slow, you still getting those leads you were talking about a while back?”. Around this time local lead generation or local affiliate marketing also started to become a “next big thing” buzzword with affiliate marketers. So I revisited my lead gen system and because of the renewed interest from the locals, I have been building it out quite a bit.
Since the economic fail, quality trade leads are worth good money locally. Having known many of the clients I deal with personally for years, I often negotiate commission based deals for exclusive leads on major stuff like home remodels, additions, garages, etc… Working on commission requires a high level of trust. Keep that in mind when setting up commission based deals and try to plug any holes in the commission chain beforehand.
Since I live in kind of a unique area, the trades people around here are used to paying commission based referral fees to each other and have been doing so for years. I get into how the trades and services work around here in some comments I made on Amanda Orson’s blog where I over-commented a bit…
Someone called me last week and said some carpenter on Craigslist was advertising that he would pay 10% on any jobs he was referred, so there are definitely people out there looking for work. Be advised, Craigslist is not the best place to look for clients however.
The hardest thing I have found with local lead generation is finding local business clients that “get it”. They know they need to be online and they might have a website, but do they really “get it”? Old school businesses that stand by the yellow pages and newspaper ads might be a tough sell at first, but this can be overcome, sometimes. Teaching them about their advertising ROI and customer acquisition cost can be a good ice breaker.
Do a some research on the client’s business niche before you go meet with them to negotiate a local lead deal.
- Try to figure out who their ideal customer is. There are a few online tools that may give you a hint at the business’ demographic, but if you don’t know for sure, you can find out from the business owner later on. They will know best.
- Research competing businesses, see where they are advertising and see what else they are doing to generate leads.
- If you are planning on using paid advertising sources, figure out what your cost per click and ad spend is going to be for the demographic and keywords you will need to target.
- Try to find out what the national lead generation services are charging for similar leads.
- Locate all the possible channels available to you for generating leads (Adwords, Facebook, SEO, local listings, classifieds, newsletter and website sponsorships, radio, bulletin board tear-offs, church fliers, bandit signs, other offline sources, etc…)
- If you are planning on getting into a niche you are unfamiliar with, but you think has potential, run a few hyperlocal targeted test ads on Adwords with a quick landing page and see if you can get a few email and phone leads before you try to get a client for that niche. Even if you have to blow off the test leads, at least you know you can get them. (Sorry, I think you have the wrong number…) Landing a local lead generation client is no good unless you can generate leads, so test first.
Once you have done your homework, you’ll have an idea of what kind of money you will need to get for the leads to make it profitable.
When you meet with the client to negotiate a deal, ask them a few questions first. Ask them what a new customer is worth to their business. Ask them what they think their customer acquisition cost is through their other forms of advertising. The answers to these questions will give you a good idea of how in touch the client is with their business and whether they will be a good client for you money wise.
Then, instead of telling the client what you need to get for the leads ask them what they would be willing to pay for the leads first. They might offer more than the figure you have in your head. If not you can always negotiate up to a profit margin you are comfortable with.
If they are a tough sell, but they “get it” and you think they will turn into a good client, you can offer them a few leads up front to see how it goes.
Phone leads are generally worth more because the close rate is (and should be) higher. Sometimes this depends on the niche, but more often it depends on the person that answers the phone at the business (can they close). Pay-per-call or flat fee phone calls are usually qualified as a lead by call duration. In other words, only calls lasting over a certain time period, 30 seconds, a minute, etc… are billable as qualified leads.
If your lead quality is high and the clients are “closers”, they will stay with you for fear of losing your source of leads to the competition. This is one thing that is good about a quality local lead generation service. If that client doesn’t work out for whatever reason, you can just move on to their competition. This can also give you some future renegotiating leverage if need be.
Where to host the landing pages or lead gen websites
This really depends on your resources. As has been said elsewhere, using the client’s website to host landing pages can have its advantages with Adwords quality score, domain age for seo, it can be quicker, lower costs, etc… But in my opinion, to build a sustainable long term lead gen business, you should be building out your own network of lead generating landing pages and websites.
When you are in charge of your own network, you can split test and switch what client you send leads to with a few mouse clicks and a few lines of code. This is a major advantage over using the clients website. Plus, the horrifying thought of having to do everything through their “web guy” if they wont give you access to the server is a major red flag for me. So host your own stuff.
Keeping track of leads
Email leads are easy to keep track of. My setup has a database that stores all the email form leads and also bcc’s me with any email leads that come through the system. Then I just label them in my email with the client’s name. A bit of redundancy never hurts.
Tracking phone calls will require a third party application. At the very least you could use Google Voice as Chad lays out here and in Local Lead Plan. There are many other phone tracking services as well. Most of these services can supply either local or toll free 800 numbers for phone tracking use. Some of these services can be quite expensive and I was fortunate enough to get on board early with a particular phone tracking service and can get basic tracking numbers and reporting for around $6 a month each (along with a pennies per minute usage fee).
Phone tracking for local lead generation is essential with the growth of mobile. One of the niches that I chase leads in has an extremely high amount of mobile users that drive a huge percentage of the phone leads to the client’s business. In that niche, phone leads outdo email leads by about ten times every month.
Scrubbing leads for quality
With commission based lead generation deals this is not an issue, but with flat fee per lead arrangements you’ll need to scrub irrelevant leads to keep your lead quality up. With some of the niches I deal with, I get job seekers filling out the lead forms looking for work. You will also get spammers that will fill out the forms offering website ranking services and other crap. Bogus leads and employment inquiries are simply not counted at billing time.
Scrubbing phone leads in pay-per-call lead deals is done by call duration as mentioned above. Any calls over x amount of time are billed as leads. Based on the client’s business the call duration required to qualify leads will vary. This is something you will have to work out with the business owner.
The bottom line is, if you can acquire good quality leads, they are worth money.