How to Start a Lead Generation Business + Tips for Landing Clients

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Businesses need customers in order to thrive, and your lead generation business can step in and provide this value. I’ll discuss how to start a lead generation business, along with tips for landing your first client, below.

How to Start a Lead Generation Business

Let’s go over the basics of starting a lead generation agency.

Determine How You’ll Generate Leads

lead generation business

There are a variety of ways you can generate qualified leads for your clients. While you don’t have to pick just one method, narrowing your business down can help you reach a niche and target audience. The more focused you are on specific lead generation efforts, the more of an expert you will become.

SEO and Content Marketing

A great way to generate leads is through content marketing strategies that prioritize search engine optimization. SEO and content marketing is one of the more effective lead generation strategies because it attract leads who are already interested in what you’re selling.

Building up a library of helpful content that draws potential leads into your clients’ landing pages is one of the more effective lead generation strategies.

Digital Ads

There are so many platforms to work with when offering digital ads.

Here are a few of them:

  • Search Engine Marketing: Google Ads and Bing Ads
  • Display Ads: Banner ads and popups on various blogs and websites
  • Social Media Ads: Facebook, Instagram, TikTok
  • Video Ads: YouTube

Debating Google Ads vs Facebook Ads can help you decide if you want to work directly with one or both. There are so many methods for generating leads, and you need to determine which ones you will be good at and which ones you want to focus on.

You don’t have to narrow it down to one platform by any means. However, consider niching down to become an expert in those areas.

Cold Outreach

Cold outreach is one of the methods for generating leads that’s been around for a long time.

Whether you prefer cold emailing or calling, this can be a great way to reach your target audience and generate leads. While it doesn’t directly open you up for rejection, most sales and marketing teams are unbothered by this.

Understanding the most common cold-calling personality types can help you decide if cold outreach is a good fit for you.

Set Your Pricing Structure

After you’ve determined how you want to execute lead generation campaigns, it’s time to figure out how you’re going to charge your clients. There are a few different methods widely used throughout the lead gen industry, and it will be up to you to decide which one is right for your agency.

Rank and Rent vs. Lead Generation

Before we discuss the two most common pricing structures for lead generation businesses, we want to briefly mention the rank and rent method. This method is similar to providing lead generation services and is worth discussing as an alternative pricing model.

Rank and rent involves creating a website and building it up to rank in search results and receive organic traffic. The website owner then rents it out to businesses in that niche. This enables these businesses to collect leads more quickly and easily.

When you think of rank and rent websites, think of them as digital real estate. They’re online billboards that businesses can use to advertise their products and services. They already exist and have an engaged online audience, and businesses are renting them out to capture leads.

Many SEO professionals use this method to build a portfolio of websites and earn a high income. James Dooley successfully uses the rank and rent model to generate high-quality leads for his clients. He has 56 million rankings on page one and makes millions. Read his story to find inspiration for your own lead gen agency!

Monthly Retainer

Offering your lead generation services on a retainer fee structure means you’re charging your clients a monthly fee for your services. Unless the scope of work changes or you’re raising your lead gen rates, this fee typically does not change from month to month.

Here’s an example of what this could look like:

  • A lead generation business charges a campaign set-up fee for each new client on top of their monthly retainer. Their set-up fee is $500 per campaign.
  • Their monthly retainer for their lead generation efforts is based on the amount their client spends on paid ads. If the client spends $10,000 monthly in Google Ads, their retainer fee is $1,000 per month.
  • The client is being charged $500 initially and $1,000 per month for these lead-generation services.

Pros and Cons of a Monthly Retainer

With the monthly retainer pricing model, lead generation businesses benefit from knowing how much money they’ll earn each month.

If your lead generation agency has ten clients that are each at a retainer fee of $1,000 per month, you know that you’re going to earn $10,000 per month that you have contracts signed for.

This is beneficial for planning ahead and feeling comfortable in your lead generation business. This also means that your earnings are fixed each month.

Whether your client earns $5,000 or $50,000 in sales based on your lead generation campaigns, you earn the same amount. Your lead generation agency is protected from market fluctuations, but you also don’t benefit from them either.

Charge Per Lead

Another pricing structure for your lead generation company is charging your clients per lead.

When targeting potential clients who have high-value businesses, this method can be more popular among lead-generation businesses. It gives lead generation agencies the opportunity to earn more money than if they charged a monthly retainer.

Here’s an example:

  • A lead generation business takes on a client who refinishes hardwood floors. This client has customers who spend an average of $10,000 per order with them.
  • The lead generation business charges 10% of sales earned from the qualified leads they’ve sent their client. This means the business is earning an average of $1,000 when a lead converts.

Charging per lead directly rewards your business for its lead-generation activities.

Pros and Cons of Charging Per Lead

There are benefits and drawbacks to this pricing model, too.

The benefit of charging per lead in your lead generation business is that your earning potential is unlimited. It’s based on the number of high-quality leads your client is able to convert into paying customers.

Your client is incentivized to close potential leads because they want their own business to make more money. This means that the more money your client makes, the more money your lead gen business makes too.

The drawback to this model is that if your client is unable to close these marketing-qualified leads you send them, your business will suffer, too. You could be sending them high-quality leads, but their sales team might not be able to close them. This means you’re not earning commission on the qualified leads you’ve sent them.

Another disadvantage of charging per lead is that it can be difficult to set up transparent sales data with your clients. How do you know your client is being completely honest with all of their sales data? Having transparent communication can help make this process better.

A Combined Pricing Model

Ultimately, many lead generation businesses settle on a pricing method that’s a combination of the two we’ve discussed.

They charge their clients a monthly retainer fee based on their ad spend, and they charge a commission percentage per lead that’s converted into a paying customer.

This method for pricing your lead generation company is useful because it makes sure that you’re receiving a baseline payment for the work you’re doing, but you’re also being properly rewarded for the sales-qualified leads you’re providing your clients. With this method, the commission percentage will most likely be lower than if you were only getting paid on commission.

As with all of the pricing methods we’ve discussed, they each have their advantages and disadvantages. You will have to decide what works best for your lead generation business and what makes you feel like you’re being properly compensated for your work.

Create Your Lead Generation Processes

an archery target with three arrows in the bullseyean archery target with three arrows in the bullseye

You’ve laid the foundation for your lead generation business. Now, let’s determine your process for capturing leads.

Define your lead generation process for taking a client from onboarding through to delivering their leads. This will most likely include lead generation software to help you properly nurture leads.

Creating these guidelines for yourself will help everything run more smoothly for you once you onboard your first clients and start to generate leads.

Tips for Landing Clients For Your Lead Generation Business

After you’ve set up your lead generation business, it’s time to generate your own sales-ready leads! It’s very meta.

Define Your Target Audience

Before you can start advertising to potential clients, you need to know who they are.

Here are a few niches to consider when narrowing down your target audience:

  • Local Businesses: Focus on businesses in your local community. Being highly familiar with the location you’re targeting can be helpful.
  • Home Services: Homeowners need local business to service their renovation and maintenance needs. These services are often urgent and expensive.
  • Beauty Services: Nail, hair, and tanning salons each have a client base who needs their services on a routine basis. They’ll need help building up their portfolio.

Start by defining your target audience so you can then tailor your marketing strategies effectively.

Market Your Lead Generation Company

Now that you know who you want to market to, you have to decide how you’re going to build brand awareness for your lead generation company.

After you’ve created a website for your business, here are a few ideas to help you decide which marketing channels you want to prioritize:

  • Email Marketing: Nurture leads with an engaging email marketing funnel.
  • Cold Calling: Directly call and pitch the companies you want to work with.
  • Cold Emailing: If cold calling isn’t for you, consider cold emailing your target audience directly. It’s a great method for educating these companies on how you can provide value for them.
  • Social Media Marketing: Establish yourself as a thought leader on social media. Decide which social media platforms are going to be most effective for reaching your target audience.

These are just a few tools that you can use for inbound lead generation for your own business.

Network

networking for your lead generation businessnetworking for your lead generation business

Growing your network will be immensely helpful for you as you start reaching potential customers.

Networking can be done both in-person and virtually. Depending on where your target companies are, start networking in similar circles. If they’re local businesses, try meeting people in person. If they’re in a different location than you, look into virtual networking opportunities.

From a local Facebook group to an exclusive online community, there are so many places to meet potential customers.

When you do a great job generating leads for your first few clients, hopefully they will start to refer you to people in their network. Nurturing these relationships is a great way to generate leads for your own business.

Consistently Follow Up

One of the most important parts of the sales process is following up consistently.

After cold calling or cold emailing, it’s possible that your first contact points won’t result in a conversion. Their non-response isn’t a rejection. Especially when you’re contacting cold leads, they will often need more than one communication before being ready to commit to working with you.

How many touchpoints do you have to have with customers before they buy? Experts say, on average, it takes eight touchpoints to close new leads.

Continue following up as you’re nurturing leads and educating them on the value you can provide. However, this doesn’t mean you can spam your potential clients. Follow up at reasonable intervals, and if they’ve asked you not to contact them further, you need to honor that.

Customer relationship management systems like Ontraport can help you organize your potential leads. Check out our Ontraport review to help you decide if it’s the right CRM for you.

Ultimately, many sales can be lost or won based on whether or not you follow up. Keep trying!

Beginning Your Lead Generation Efforts

With some careful planning, using this guide you can start your own successful lead-generation business. So start generating those leads and watch your business grow!



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