Lead generation is the process of attracting more customers for other businesses to make a profit. You act as a middleman between a potential customer and a business. Most businesses don't have the time to market themselves. Or, they don't know how to generate a qualified lead. Leads in business are potential customers. All businesses need leads because they want to sell their product or service. The more high quality leads a business gets, the higher their chance of generating more sales.
A lead generation business is a digital marketing business model that generates leads for another company by generating organic (or paid) traffic. So, if you can bring potential customers to local businesses through email marketing, paid ads, content marketing, etc., these businesses will be more inclined to pay you for your services and the value you are providing them with. It costs between $20 and $40 to start a lead generation business. All you need is your domain and a call tracking phone number.
Local lead generation is a lead generation strategy that pays you every month for the organic traffic you generate for local small businesses. You create a website offering professional services. Then, position the sites at the top of the search engines with the goal of funneling all the traffic to local small business for a monthly fee. There is no need to use any paid traffic methods like Google ads with this lead generation process. Your sites are a type of sales funnel that runs on autopilot after you've positioned your sites at the top of the SERPS. Your lead generation efforts can pay you a profit margin of over 90%.
In this article, I break down what each step is in local lead generation. Also, I explain how to go about getting each one done. I also reveal two examples of profitable lead generation sites that pay me a recurring passive income and explain why this business model continues to provide a high profit margin consistently in 2023.
5 Steps to Starting a Local Lead Generation Business
Step 1: Select a Niche, Like Plumbing or HVAC
There are hundreds of niches and thousands of cities to choose from. That means that the possibilities are endless and dominating a marketing is not as difficult as competing for the attention of the target audience as an affiliate marketer. Finding a market with good search volume and weak competition is the key. Below are some niche ideas to get your brain started thinking about the possibilities.
There's over 50 profitable local lead generation niches you can get into and every business in each niche needs to generate leads every day.
When choosing a city to go into and generate leads, you must look at the population size. The sweet spot is to go into cities with a population size between 75,000 and 250,000. This range will is ideal because there is a good amount of leads in the city but it is not extremely saturated with competitors. Ranking for a profitable niche in a market with a population within this range is a good starting point.
When looking to get into a niche and market, you first search the main keyword + city as shown below.
If in the top 3 map pack on Google there is a listing with no website, that would be an example of low hanging fruit. That is a great opportunity to take advantage of and get a site built in that niche and market. These opportunities might be rare, but when you build superior local ranking skills, you're not worried about 95% of the other companies.
If you see two listings in the top three positions of the map pack with 15 reviews of less, you can confidently outrank them although the number of reviews isn't the only ranking factor.
If all top three map listings have many reviews as shown below, it is wise to find another niche or market.
The number of referring domains is another indicator to see how competitive a market is. Not every backlink was created equal and some links carry more power and influence than others. For example, you can outrank a site that has 43 links with just 10 powerful links.
You're better off finding markets with a lot lower RD ("Refferring Domains") like the ones shown below.
What you don't want to see are domains with a high RD like these.
Once you know how to look at all of the different factors that Google takes into account when it comes to local rankings, you become like a sniper that knows exactly what needs to be done to take out 95% of the competition and always get the top ranking positions.
Step 2: Create Your Lead Generation Website Using Snapps
To build your lead magnet, you must first buy a domain like grlimos.com (gr is short for Grand Rapids). In 2023, exact match domains work well because they contain the main keywords. For local lead gen, that would be "city" + "service" as listed below.
Having a city + service domain establishes your site as the go-to business for your area in the eyes of Google and your potential customers. This authority goes a long way in establishing overall legitimacy of your site. This method also helps you speed up your overall ranking process. If you want to expand, consider using a more generalized name like legacyplumbinservice.com.
After you've nailed down your domain, you the use Snapps to build out your lead generation service site, which is a simple click and drag type of builder. On your site, you must include a quote form somewhere near the top of the homepage that encourages potential customers to submit their contact information.
Step 3: Optimize your website with on and off page strategies, like site layout and link building
Google pushes the most relevant content to the top of the SERPS because they want the best search engine experience they can offer their users. This is the essence of search engine optimization, which you use to build out sites that Google's algorithm deems as being quality, and therefore worthy of a top page rank.
The reason Local Lead Gen focuses on "local" is that the ranking process is much easier than trying to rank for global keywords like you would with blogging or affiliate marketing. Once you master the local SEO ranking factors, you can scale this business predictably.
The top ways to optimize your site are listed below.
- On page optimization (Site layout, Content creation, implementation of relevant keywords, title tags, etc.)
- Off page optimization (Citations, link building, Google Business Profile optimization, etc.)
Getting to the top of Google's search results is a popularity contest. To consistently outrank your competition in the lead generation business, you need a process and the expertise to generate powerful, high-quality relevant backlinks to your site..
Here is a list of the high quality links you want for your lead generation site.
Links from relevant sites. The main way we do this is we have a private Facebook group of 7000 students where you can form link circles with other students. This is just one of the ways we use the community inside our program to give us an edge over the competition.
Relevant guest post links.
Links from influential sites. We have access to a large network of sites that have a lot of authority behind them and this is what gives our site "ranking juice".
Links from highly relevant directories. Our team has a list of over 100 places to get these links from.
The low quality links you want to avoid are the following.
- Spam links from overseas
- Fiverr.com links
- Links with no relevance
Many people try to rank with low-quality content, worthless information and link building with links that do more harm than good. Google is a corporate behemoth and they are always looking to sniff out sites that are trying to cheat their system. If you site get tagged, it can be very hard to recover.
Step 4: Send incoming phone calls (leads) to potential clients
After optimizing and ranking your site on Google you will start generating phone calls. You are now going to send those leads to a local business owner for free. You don't even have to tell them you're sending a new lead. Their phone will ring and they'll keep hearing, "This lead was sent to you by..." every time they pick up the phone. The goal is to establish the value of your service with the business owner through our leads in advance method.
The best strategy to acquire clients for your lead generation business is to provide leads in advance. You can hear Dan Klein talk about this method in the video below.
After you get a business owner to show interest and want to work with you, you can structure your deal in several ways.
- 10% of closed business
- pay per lead (we have lead value calculator)
- flat fee
- Hybrid: combination of flat fee plus 10% or pay per lead
Step 5: Scale by creating more sites
After landing your first client paying you every month, you realize that you have the power of creating passive income streams that pay more than single family real estate. It's time to scale your lead generation business. You can hire content writers from places like Upwork or even Craigslist, and virtual assistants on onlinejobs.ph.
Timedoctor is a valuable software to help you keep track of the time your VAs are working. It'll stop recording if a VA has been inactive for over 1 min, and it's taking a screenshot every 4-5 sec so you know that you're not paying for them to goof off on social media.
What My Operation Looks Like:
Responsible for research of a niche & writing content.
Web Developer (VA):
Responsible for taking the content and putting the site together with either Weebly or WordPress.
SEO / Site Ranking (VA):
Handles all the optimization, from building high-quality backlinks, citations, & more.
I still handle speaking to the business owner and closing the deal, although you could hire a sales team to take calls and close the deals for you.
Examples of Lead Generation Sites
What is a Lead Generation Business Example?
A lead generation business example of one of the first sites I put together was in Lansing, Michigan, in the limo rental niche. I had no prior online experience, but I followed Dan Klein's training and put this site together.
It took about 4 hours to build and another 10 hours to rank. I haven't even logged into this site since 2014 and it's still paying me $750 every month. Every phone call that I generate, my client gets emailed the recording of the call so every lead is tracked. This way, my clients know exactly how much money they're making from my leads.
The next example is of my asphalt paving site in Oakland, California. This client pays me ten percent of all jobs under $100,000. If the job ends up being over that amount, they pay me five percent. I got a $6,000 paycheck off of one job he closed for a commercial contract.
Is a Local Lead Generation Business Legit?
A local lead generation business is legit because owning a website and its domain is completely normal. Selling a service on your website and sending the leads to a local small business is no crime. Google is also not the police or some sort of government agency that monitors your site. No fraud is happening because your lead generation site sells a legitimate service and can even mention that you work in partnership with your client, who is an actual business that is registered in your state and who actually provides the service your site offers. There is no foul play with a local lead generation business.m
Is Lead Generation a Good Business Model?
Lead generation is a good business model because there is low overhead and competing against 10-15 local business owners is easier than the competition you face in other online business models. Your profit margins with your lead generation campaign are also over 90% which is much higher than what most business models offer. Of all the lead generation methods, local lead generation offers the highest profit.
Can You Really Make Money Selling Leads with a Lead Gen Business?
You can really make money selling leads with a lead gen business because as long as you position your digital properties at the top of the search results, local small business owners will pay you every month for the influx of leads you only send them. Your success lies in how many potential leads you can consistently generate and how many digital properties you build and rank. Local lead generation is profitable because businesses need what you offer. You can charge anywhere from 10% to 20% of the monthly revenue you generate your clients. A ratio of 1:5 is where you want to be at.
Why Should You Learn How to Generate Leads For Local Business?
You should learn how to generate leads for local business because many business owners who are clueless about how to do it themselves will pay someone hundreds and even thousands of dollars every month. Leads are the lifeline of businesses, and if you can generate them consistently, you'll earn a passive income every month. You can generate anywhere from 5 to 100 leads per day depending on the niche and market you put your digital property in.
The benefits and challenges when starting a lead generation business are listed below.
Benefits of Starting a Lead Generation Business
Challenges of Starting a Lead Generation Business
What Are the Tools Needed When Starting Lead Generation Business
The tools needed when starting lead generation business help you run your business more efficiently. The following list of tools are key to helping you see what kind of SEO will be required to outrank your opponents.
Is it Possible to Put Your Local Lead Generation Business for Sale?
It is possible to put your local lead generation business for sale, but you must first go through all the steps of building and optimizing your assets. After you position your assets well on Google and they generate consistent leads every day of every month in a profitable niche, you may eventually sell your lead generation business or lead generation site for 40X the monthly revenue it generates. All of your websites are lead generation companies that you can sell for a hefty profit.
#1 Local Lead Generation Business Course
Dan Klein has been coaching the local lead generation business model since 2014. I was one of the original students that became a top student. After reaching over $50K in residual income, I partnered with Dan to help people quit their 9 to 5 jobs by teaching them this great skill of generating leads for small businesses. It's all possible using online properties that generate free traffic. We have over 7000 students. Click here for more info.
Having access to a community where you can ask questions at anytime is priceless. Dan hosts live coaching calls twice per week and those calls can make all the difference in the world for you and your local lead generation efforts.
The key to this business is in owning the sites because it gives you the control of your business and locks you into a golden handshake with your clients. Your lead generation sites are like digital rental homes. As long as you own the house and don't sell it, you can always find someone that wants to rent it, which translates to a passive income.
Local Lead Generation Pays You Passively
The local lead generation business model will pay you passively if you follow each of the steps laid out in this article. The best part is that you don't have to constantly provide maintenance to your sites. All you have to do is ensure that your online properties are properly built out and optimized to outrank your competitors. If you check the boxes on that, landing a paying client won't be difficult because you can provide leads in advance. As long as you generate leads on autopilot for your clients, they will be happy to pay you every month.
To get access to the original training program that will guide you on your path to earning a passive income each month, check out the local lead generation training program.