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

September 30, 2022

The lead generation business model is profitable and one of the best ways to secure a passive income. But what is it? And how much does it cost to start?

In this article, we take a closer look at lead generation, including the pros and cons of the business model. We'll also cover topics like how much money you can make. Plus, how to become a digital landlord. And why starting a local lead generation business is the best way to make money online in 2022.

What Is The Lead Generation Business Model?

Lead generation is a way to drive more sales. And how to find more people to buy the product or service offered by small businesses. You're like the middleman. But you don't own any product. And you don't need to invest a ton of cash upfront. Instead, your only job is to drive 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. And 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

No business model is without disadvantages and risks. A few pros and cons of lead gen include things like:

Pros

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.

Cons

Ranking websites 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?

Lead generation is profitable. Plus, it doesn't cost much to get started. And because you're providing a valuable service for local business owners, you can make a lot of money. That's the power of selling leads. But you need to generate a qualified lead 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

If you can generate leads that convert and keep your clients happy. You will make money with this business model. (Like this student in our lead generation training program).

~Peter's Story:

What Are Popular Lead Generation Strategies?

I prefer the rank and rent business model. Not only is it a proven concept. (And how I amassed an income of $52K/month). But with the skills taught in our local lead gen program, it's a low-risk and low-cost way to make money online.

The program's been live for almost a decade. And it now has over 7000 students. Plus, our training provides real-life results. And the ranking strategies you learn can handle any curve ball Google throws. But there are other lead gen methods to consider like:

Lead Generation Strategies

  • Email Marketing: A way for lead generation 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 lead magnet and landing page. But you can use tools like LeadPages and OptinMonster to streamline your process.

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

You need to take the time to learn the skills to turn a potential lead into a paying customer if you plan on using this strategy. Because paid advertising is expensive and costs continue to escalate. So 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.

But you can use tools like Google Analytics or lead gen tools like LeadFeeder to optimize your marketing strategy. But be ready to shift gear fast when things aren't working. Of course, you can use various B2B lead generation strategies. 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. And if you can generate a steady stream of high-quality leads. Then, you will make a lot of money with lead gen. The lead generation industry was valued at over $300.7 billion in 2020. And it continues to grow at 15.6%.

The key 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 generation 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. Just like this student in our program was able to achieve.

~Helen's Story

Once you're at the top, your lead gen properties are front and center for people armed with purchase intent. 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 over traffic. 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 once you know how to drive organic online traffic. You can write your own paycheck. Plus, because the lead gen model is a low-cost investment, you just need to get your systems streamlined. Then rinse and repeat. And there's no limit to how many websites you build. Or how many lead gen 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. 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 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 if you can make their company stand out from the competition. Then, your services will be in constant demand. But not all clients are a good fit for the lead generation business model. So you need to do some research before you choose your niche. And consider things like:

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 lead generation tool like Whitespark or SEMRush. (To check out the competition and assess how difficult it will be to rank your lead gen 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

Lead generation (also known as rank and rent) is a low-cost way to start and scale an online business. Unlike traditional real estate, you don't need significant capital to build and rent your digital 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 asset that can earn you $500-$2000+/month. 

Building your lead gen website 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 your site is rented, it requires little to no maintenance. Leaving you time to scale your lead generation empire like this lead gen student.

~Kelly's Story

Is Lead Generation Worth It?

Lead generation is worth it. Not only are you providing an essential service. But you offer value once you know how to rank websites and get to the top of the SERPs. And business owners are willing to pay serious coin to get a piece of digital real estate that's front and center for their target audience.

Moreover, you can do lead generation 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. And become a lead magnet generating a steady flow of high quality leads 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. And with over 41,683 ZIP codes in the USA, the opportunities are endless. Each ZIP code represents a targeted area. 

Tree Care Lead Gen Site

Dial down and get niche-specific, and you have a lead gen site that 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 you need to leverage Google. And know how to manipulate SEO tactics for each lead generation campaign you build. You can get your lead gen property (like the one above) to the top of the SERPs in as little as 6 weeks.

Then you 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. Plus, it's a chance to make real money online in 2022. 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. And from anywhere in the world. 

Plus, once you know how to leverage tools. And learn how to drive high-quality leads that convert for small business owners. Then, you can scale quickly for a minimal investment. And 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 2022, is to build your own lead generation business.

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