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Scalable Local Leadgen Marketing For Cash

I know I said I was going to do the second math equation post next. However I felt that was a little heavy so I’m going to do something less technical in between to lighten the mood.

On twitter the other day ( I’m @smaxor ) I was talking with a few people about Local lead generation marketing. As you may have picked up that’s all the buzz in the internet marketing community.  Frank Kern if you’re familiar with him has said he’s getting out of Internet Marketing and getting into Local marketing. I don’t really know why this has happened but Local marketing has a lot of potential. But the way it’s being sold and people are being told to go about it, I don’t know that I agree with for the real marketer. Maybe for noobs it’s a good idea. However for the real marketer I don’t think in the carnation that’s being sold is all that scalable and very hard. We had this whole conversation on twitter the other day and Justin owner of affbuzz as me to package it up and put it as a post to help people, so here goes.

You’re probably thinking, so what’s the flaws and what do you suggest. First off I don’t do anything in local but have thought about the model pretty extensively.

For those of you that don’t know local marketing it means going to your local businesses and getting them to do lead generation to get new customers and clients for their businesses. I.E. go to the local chiropractor, plumber, contractor, hair salon, etc. Build lead generation campaigns for them and sell them the leads for more then they cost you to generate. Can you see the flaws in this?

  1. Clients suck and with this model you’re in the weak spot.
  2. The hardest part of marketing is learning all the different angels of a vertical, this has you doing many verticals which is a PITA
  3. How many leads can your local hair salon buy?

Those are my top 3 on why I wouldn’t touch local marketing in how most guru types are pitching it.

However that doesn’t mean it doesn’t have potential, guess what? We’re going to end up back with niche marketing just on a more locally focused level. Call it what you will but real good “local” marketing is niche marketing. You’re probably thinking to yourself, what in the world is he talking about.  Well here’s how you build a great huge business starting with local.

  1. Pick a niche, 1 niche, 1 type of business and know it better then the business owner. Spend a ton of time learning everything there is to know about marketing that niche. What, why and how people buy. What the pain motivators are. Why they’d chose one company over another. What the lifetime value of a customer is to someone in that vertical. Are they a one time deal or do they come back if they come back how many times on avg and for what amount of profit/revenue.
  2. Once you have a solid understanding of the business build a site that’s your brand to capture the leads on. Don’t call it San Diego XXXXX. Call it XXXX deals, XXXXX resources, XXXXX reviews, or whatever else is general enough that you can grow it past 1 city.
  3. Start testing the campaign on your own dime. Drive leads with no buyers just to test if the model will work for you and what it’s going to cost you to generate leads. Once you’ve optimized and done all your testing. This is when we start to approach a business.
  4. Now you’re ready to start talking to actual business owners. From all your research you now know A. how much a lead is worth to a business in that space and can probably tell them how and why better then they can. B. You know what it would cost you to generate a lead for that business so you’re aware of the margin available that it’s a viable business model.
  5. Lock down your first Buyer for the leads and start sending some test leads. There’s always going to be issues. Learn how to deal with those so you don’t get a ton of returns. Make sure you always have the business you’re generating leads for in mind before yourself. If you think about them and provide great leads you’ll have a buildable business.
  6. Once you’ve tested and made a couple bucks sending leads to this buyer you’re probably going to cap them out. They’ll say I can’t take anymore leads, we’re too busy. So guess what now you go to all the other businesses in town and find 5-10 buyers of the leads. Get a good group of buyers in your posse and then let them bid against one another for the leads. This will keep your costs the same but drive up the value of the leads. Something else you can consider doing is making them non-exclusive. You can sell a hair salon lead to 3 salon’s and they can each call and try and sell the lead. Of course you don’t get paid as much per lead but the goal is to make as much as possible. So if you can get more exclusive or semi-exclusive do it.
  7. Once you’ve tapped out your city for that niche start moving onto the next. You’re a master of your niche. I should be easy to duplicate.
  8. When you grow to a size you can’t handle the first person you can hire is a sales rep to manage accounts. Put them on the phone and start growing more and more cities.

At the end of the day if you have 20-40 cities for example and it’s all the same brand/site, which is yours at this point you have a very salable business. An example of someone that’s built a brand promoting local businesses is 1-800-dentist. This isn’t a leadgen model but they’ve basically got money from dentists to market their brand. They made money marketing just the same as you would. And then at the end of the day they own the whole brand. Then you’d technically be called a lead aggregator :)

But again this is Niche Marketing grown from local up. This is not local marketing :) But I think it’s a 1000% better way to go.

On a side note if you’re looking for a cheap simple way to manage lead flow check out leadmesh.com it costs 300$ a month and has a very nice UI and capabilities to take leads in multiple ways and distribute them out in real time or delayed. Also, supports exclusive and semi-exclusive models.

Hope this helps.

9 thoughts on “Scalable Local Leadgen Marketing For Cash

  1. this is exactly what i was working on today and what ive been planning. im starting off with a static price, i know i want the expandable business that leads could bring but many of the pitfalls you mentioned, makes it much easier to just make lots of sites and sell static ads on it and dominate every city for say 10 niches.

  2. Good post…here are some additional things to consider in “local” lead generation:

    – If you know and are good at SEO, it can be advantageous to do SEO on your target keyword (ex. “San Diego dentist”) and get a decent ranking. That way when you do speak with a business owner, it’s a much easier conversation to have when you show them your existing rankings. Start with SEO on your existing city, and then plan for expansion into other cities as you learn that niche. If your main site is all about dentists (for ex.) then when you have a lot of “dentist” anchor links coming in from one city, getting rankings on other cities becomes much easier as your site will have authority.

    – If you’re doing PPC and SEO, remember that each city’s CPC rates can be dramatically different (we’ve seen $15+ CPC differences on high-end services). The folks paying for Adwords are VERY keen to be lead-gen customers especially when their vertical is expensive. Expensive CPC = higher priced services/products = clients with bigger budgets.

    – Lead gen isn’t as easy as flipping leads to your client(s)…you need to teach them how to properly work the leads (importance of response time is a biggie!). If you send leads and the client drops the ball, they’ll inevitably blame the leads and be an unhappy customer and not renew in the long term.

    – Call tracking – If you’re doing lead-gen to a phone number, NEVER send it direct to the client’s number. Always route through a call tracking number so you can do independent verification of the # of leads.

    – If you’re getting into this space, consider a software provide such as leadmesh.com which you mentioned. Others are Boberdoo and LeadExec.

  3. Smax! Great article man! Very much appreciated. And thanks for putting on that meetup in San Diego a while back. It was really encouraging to get to meet all you guys and at least know that this is possible.

  4. Excellent points – exactly the model I started in early 09 after reading the shoemoney article and thinking, “looks interesting, but has to be a better way”. Going through the clients’ site is a sure-fire disaster waiting to happen.

    Thanks for the heads up on leadmesh

  5. Awesome article! Question for you…obviously a lot of local businesses would rather get phone call leads – so how would you address this issue since there is only 1 site sending leads to several clients?

    1. Well you’d want to get a simple call router/tracker platform. There’s some cheap easy ones out there. Then you’d have to figure out what an inbound call was worth vs. a form fill.

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