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Is Lead Generation Business Profitable? Can You Still Make Money With This Business Model?

January 22, 2023

Is the lead generation business profitable? Yes! Lead generation business is profitable and the best way to secure a passive income and harness time freedom in 2022. The idea behind lead generation is to own digital land at the top of the SERPs. Of course, it takes skills and has a few pros and cons you need to consider.

But lead generation is a way to drive online traffic and get more business. Consider that 4.95 internet users are actively searching for companies and services. So if your online business sits at the top of the search engines, you own prime real estate and are front and center for your target audience. 

In this article, we take a closer look at lead generation, including how to be a digital landlord. The local lead generation business model is the best way to make money online. There's less competition than other online models (like dropshipping or affiliate marketing). You can improve your skills and learn how to generate leads quickly, making lead gen worth it in 2023

What Is The Lead Generation Business Model?

The lead generation business model is a way to drive more sales and find more people to buy small businesses products or services. You're like the middleman, but you don't own any product and don't need to invest a ton of cash upfront. Instead, your only job is to drive online traffic to your offer. 

Then get leads that you sell for a profit. (Think of platforms like HomeAdvisor or Thumbtack). But with local lead generation, your focus is on a specific location in a highly targeted niche. So not only is local lead generation less competitive. But do it right, and it can give you a steady cash flow. 

Pros & Cons Of Lead Generation

There are pros and cons of lead generation. But of course, no business model is without disadvantages and risks, and these include things like:

Lead Generation Business Benefits

A recession-proof business model that's in high demand and easy to validate.

Low startup costs and you don't need to rely solely on paid advertising.

You own the websites and the leads. So you have full control over your business.

Lead Generation Difficulties

Ranking a lead gen website is time-consuming. 

The business model requires a learned skill set.

Finding business owners who want to pay for your leads can sometimes be challenging.

How Much Does It Cost To Start A Lead Generation Business?

It costs about $500 to start and rank a lead generation site, so the more sites you own, the higher the costs. But your expenses are a drop in the bucket when you consider that the business model earns 85%-90% profit margins. So lead generation is profitable, and it doesn't cost much to get started compared to a traditional business. 

Plus, you can make a lot of money because you're providing a valuable service for local business owners. That's the power of selling leads. But you need to generate a qualified stream, and that includes a few non-negotiable costs like:

Domain & Hosting

$10-$20/year for your domain and $5-$18/month for hosting on platforms like Namecheap or Siteground

Call Tracking Number

$9-$12/number with software like CallRail

Secure A Google My Business

You can use a free Gmail account

Email

$6-$24/month on platforms like Google Workspace 

Keyword Research Tools

Free with tools like Keywords Everywhere or Google Keyword Planner

Third-Party Lead Generation Software

$300-$2000+/year with options like SEMRush and Mangools

Lead generation costs are minimal, and if you can generate calls that convert and keep your clients happy, you'll make money with this business model. (Like this student in our training program).

~Peter's Story:

What Are Popular Lead Generation Strategies?

Popular lead generation strategies are through things like:

  • Websites & funnels 
  • Email marketing & digital marketing
  • Social media ads & LinkedIn connections

Of course, there are other methods to consider like:

Popular Lead Generation Strategies For 2023

  • Email Marketing: A lead generation strategy that allows companies to capture and nurture leads from a potential client. (A person that ultimately becomes a paying customer). But you need to know how to write concise emails with compelling headlines. Emails only see an average open rate of 21.33%. So you should consider investing in tools like MailChimp or Drip to help with customized campaigns and marketing automation.

  • Sales Funnels & Landing Pages: Grab the attention of your target audience using compelling copy and a clear call to action. But even the best sales funnels and landing pages only get you around 2.4%-4% conversions. So you need to have an irresistible offer. Something that will drive a potential buyer to click through your magnet and landing page and produce a new lead. But you can use tools like OptinMonster to streamline your process.

  • Paid Advertising: (Google Ads, Facebook Ads, YouTube Ads, etc.) You and your team need to be the b2b best marketers. So, know how to design a lead generation campaign that converts. And you need to learn how to create a unique angle with an offer people can't refuse. 

What's The Best Business Model For A Lead Generation Site?

The best business model for a lead generation site is the rank and rent model. Not only is it a proven concept (and how I amassed an income of $52K/month). But lead generation is a skill, so you need to learn the fundamentals of the business. But once you have a proven system, lead gen is a low-risk and low-cost way to make money online. Our program's been live for almost a decade and has over 7000 students, and our training provides real-life results. 

The ranking strategies you learn in our training can handle any curve ball Google throws. Students learn the skills they need to turn a potential lead into a paying customer, so they improve their online lead generation skills. (Then they don't need to rely on paid ads). You should use this strategy because paid advertising is expensive and costs continue escalating.

Paid ads are one way to generate leads quickly. But if you run paid ads, know where your audience hangs out and make sure you're advertising on the right platform for maximum exposure. Also, be sure to bill your client's ad spend separately from your fee, or you risk making no profits.

You can use sites like Google Analytics or a lead generation tool like LeadFeeder to optimize your marketing strategy, but be ready to shift gears fast when things aren't working. Of course, you can use various B2B marketer tactics and obtain leads from multiple platforms, but no matter what method you choose, the end goal stays the same. Get leads for small business owners that you can sell for profit.

Can You Make Money With Lead Generation?

Yes, you can make money with lead generation. If you can generate a steady stream of high quality leads, you can make a lot of money with the business model. The industry was valued at over $300.7 billion in 2020 and continues to grow at 15.6%, so there continues to be a ton of untapped markets and opportunities to make money with lead generation in the future.

But the key to making money is to know how to get your leads to convert and how to drive purchase-ready customers to your offer. So you need a lead gen strategy that will attract a potential customer. However, if you learn how to build and rank websites that reach the top of the SERPs, you own prime real estate and a steady cash flow. (Like this student in our program did with his business).

~Helen's Story

Once you're at the top of the search engines, your online properties are front and center for people armed with purchase intent and will attract high-quality leads. But, of course, it takes time to rank your sites, so you need to learn skills like: 

  • SEO & Google Ranking Factors
  • Digital Marketing & Google Analytics
  • Content Marketing & Copywriting
  • UX & UI

Organic search traffic is difficult to obtain, and Google is getting less willing to hand it over. Plus, with its constant algorithm changes, you need the skills to get to the top of the search engines. (Like the ones we teach in our lead generation training). But you can generate leads organically if you have the skills and understand the fundamentals of the business model. 

Once you know how to drive organic online traffic, you can write your own paycheck. Plus, because the business model is a low-cost investment, you just need to streamline your systems. Then rinse and repeat, and there's no limit to how many websites you build. Or how many virtual assets you own. (I have over 80).

Is Lead Generation In Demand? And Who Are The Best Lead Gen Clients?

Yes, lead generation is in high demand, and the best lead gen clients are the ones who are hungry to grow their businesses. Leads are one of the most critical factors in business, and small business owners need a stream of high-quality leads that convert to paying customers. But most small business owners lack the skills or don't have time.

However, 27% of business owners depend on organic traffic for lead generation. So if you can prove your service will increase their ROIs or make their company stand out from the competition, your services will be in constant demand. But not all clients are a good fit for the business model. So you need to do some research before you choose your niche and consider things like:

The Best Lead Gen Client Criteria

  • Do they provide a product or service people want? 

  • Is there a demand in the market?

  • Do they have a good product to audience fit?

  • What's the level of competition in this niche?

You want to pick a niche with enough demand and competition to have options when it's time to sell your leads. So leverage a third-party tool like Whitespark or SEMRush. (To check out the competition and assess how difficult it will be to rank your property). 

Pro Tip: Organic traffic takes time, but it's more sustainable long term than paid advertising. Plus, you can earn a steady cash flow for your skills and scale your lead gen business to make a passive income.

How To Become A Digital Landlord

Become a digital landlord by building and ranking digital assets. Get your rank and rent websites to the top of Google's search engines, and your online investment produces leads. Then you sell those leads to a local contractor for a profit. Your digital property is like physical real estate property. You own the site, the tracking number, and the leads. 

So you're renting your virtual land each month (like a landlord does with traditional real estate). But lead generation is a low-cost way to start and scale an online business. And unlike conventional real estate, you don't need significant capital to build and rent your online assets. Domains cost around $10/year, and hosting sits at about $25/month. Add in costs for your tracking ($15/month), and you own an entity that can earn you $500-$2000+/month. 

Building a site like the one above takes about 10-15 hours and 6 weeks-6 months to rank. (I published that site above in 2015, and I've been earning $2000/month for the last 8 years). But once your site is at the top of Google, it has insane value.

Start bringing in leads you sell to local business owners to capitalize on that value. And after you rent your site, it requires little to no maintenance. So you have time to scale your empire like this student.

~Kelly's Story

Is Lead Generation Worth It?

Yes, lead generation is worth it. Not only are you providing an essential service, but you offer value. Plus, once you know how to rank websites and get to the top of the SERPs, business owners will pay serious coin to get in on the action and rent a piece of digital real estate that's front and center for their target audience.

You can start lead generation companies part-time from anywhere in the world, and you don't need to spend much cash to make big bucks with the business model. Of course, it takes time to rank your sites, but once they're at the top, they're like digital billboards that produce a qualified lead stream you can sell for profit.

Why Lead Generation Is Our Number One Recommendation

Local lead generation using websites you build and rank is our number one recommendation. Not only is it the most effective lead generation method, but you don't need to rely on paid advertising. There are over 41,683 ZIP codes in the USA, and the opportunities are endless. (Each ZIP code represents a targeted area). 

Tree Care Lead Gen Site

Dial down and get niche-specific, and you will have a site that you own and isn't wide open to competitors or easily duplicated. Of course, it takes time to rank your sites. (You need to do research and have a marketing strategy). But if you can learn the skills to leverage Google and know how to manipulate SEO tactics for each campaign you build.

Then you can get your digital property (like the one above) to the top of the SERPs in as little as 6 weeks and will own premium real estate. Rent your sites, and you could make up to 95% profit margins. Plus, the sites and leads belong to you. So if you find a business owner that's not the ideal fit, you can pivot quickly and go to their competition, and your money will keep coming in on autopilot. 

Conclusion

The lead generation business is profitable, and it's a chance to make real money online in 2023. Learn how to become a lead magnet with the skills taught in our local lead generation coaching program, and you can secure a passive income. Of course, starting a lead generation company takes time and training. But you can build multiple sites at a time from anywhere in the world. 

Plus, once you know how to leverage tools and learn how to drive a sales lead that converts for small business owners, you can scale quickly for a minimal investment. Then you can write your paycheck every month with no limit to your income potential.

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Ippei Kanehara
Founder/CEO

$52K per month providing lead generation services to small businesses

Ippei.com is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2023, is to build your own lead generation business.

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