There are many ways to make money online. You can sell a product, get into publishing, build apps for smart phones, consult on your particular field. Or, like me, do lead generation. What’s so appealing about this type of monetisation is that, when done properly, it can deliver the ‘internet lifestyle’ many entrepreneurs dream of.
That is to say, you can be generating revenue while you sleep, on your (many) days off, and even while you travel the world. If the thought of a four hour work week, as espoused by Timothy Ferriss, makes you weak at the knees, then read on. Lead generation might just be your cup of tea!
Lead generation is a subset of affiliate marketing and although the two are based on the same referral fee model, there are subtle differences.
Unlike affiliate marketing, where you refer a prospect on to a merchant where they convert to a paying customer and you get a kick back, lead generation generally requires the user to do less.
This is a key difference between the two. It also means that your website’s traffic is more monetisable because, after all, it is easier to get someone to fill in a form than it is to get them to part with their money.
So if a lead is comprised of user details, who’s interested in them? Businesses, obviously. And they can’t get enough of them. For the sake of an example, let’s assume for a moment that your business operates in the finance space. You already use online and offline marketing to drive prospects to your website or store/s where you can sell them a product or service.
But, like any business, you want to grow. Fast. So what do you do to get more customers? You can’t put too much emphasis on any one single marketing channel. So you start to pay for leads gathered by third party websites – users who are pre-qualified and interested in what you have on offer. All the business needs to do is get on the phone and convert the prospect into a paying customer.
If you haven’t already started your online business, then one of the first things you need to do is to consider what niche to get into. When it comes to monetising via lead generation, fortunately, there are many niches to choose from. One of the most obvious, and the one that I am most active in, is finance. In this particular niche it is commonplace for businesses to buy new customer leads.
In fact, some of the web’s biggest brands are involved in finance lead generation, not least Google, who fairly recently launched Google Advisor. Other finance lead generation businesses you may or may not have heard of include Bankrate (USA), Money Saving Expert (UK) and Credit Card Compare (Australia). As you can see, lead generation in finance may constitute mortgage, loan, insurance, or credit card leads. There are many more in the finance space, and it isn’t hard to find them.
Other niches outside finance where leads are in demand include distance learning, telecomms, real estate, and utilities. Start a website to cater to any of these markets and you could be generating good money, but the secret is choosing one that aligns well with modern marketing techniques. And it’s this that I’d like to talk a bit more about.
That there is money in lead generation is no secret, so you can expect practically any vertical to be competitive. Most likely there may even be one or two big brand incumbents to compete with for the top spot.
The real problem, however, is not that there are competitors to watch out for. No, the biggest obstacle is driving enough qualified traffic to your website. It can be very difficult to get any sort of traffic when you’re trying to market a website about something as boring as insurance or as complex (to the uninitiated) as exchange traded funds.
But there are ways and means to market even the most boring of products. CompareTheMarket.com’s integrated television and social marketing campaign is a case in point. What they’ve done, a play on their brand name, has been so successful that the campaign’s tagline has entered the vernacular in their native UK. Check out this video on YouTube to see what they’ve done.
It’s fair to say that most startups don’t have the budgets required for something as ambitious and risky as a national advertising campaign, but there is a valuable lesson you can learn from here. In a competitive market, where your competitors have a head start and are probably flush with cash to invest in their brand, you’ve got to think outside the box.
Do something different. Break the mould. I think that’s the only way to really succeed in generating substantial volumes of traffic from social and search (campaigns that go viral typically result in more links, which help your ranking in search engines).
Another example of a hugely successful campaign that transcends social and search channels is the series of “Will it blend?” videos from Blendtec. Had you ever heard of them before they started trying to blend iPhones and iPads in their food blenders? I know I hadn’t.
The beauty of their campaign is its simplicity: will this incredibly popular new gadget blend in one of our blenders? It’s so good in many ways. It borrows brand recognition from the manufacturer of whatever device is being blended. It piggybacks on the buzz around often highly anticipated products. In my opinion, Blendtec’s viral marketing campaign is one of the best to date. Take note and learn.
Yes, it’s true that successfully marketing a lead generation website isn’t the easiest of objectives. However, I’m firmly of the belief that it can be done when you apply the same principles as illustrated above.
What makes your lead generation website stand out from the rest? Taking a cursory look around and I often see thin websites devoid of identity. Often they constitute little more than a few ramshackle pages with poor copy, a few stock images and an unwieldy form to gather the lead.
Do you really think that instills a user with trust? Do you realistically think that you can convert someone casually looking for information on a mortgage into a lead when your website looks like it is run by a bunch of identity thieves? These are real people you’re dealing with, not just IP addresses, and they tend to be suspicious of websites with poor design and aggressive marketing.
In my experience, the importance of standardised and user friendly design is easily overlooked. However, don’t be under any illusion as to how significant it is in building trust. Take care to design a website that is tactful, easy to use and above all, exudes trust. Banish flashing graphics.
Burn the reams of search engine optimised copy you thought nobody would take notice of, but do. Nuke unnecessary elements that slow down your site, clutter it and distract the user. Build trust with a superior design than that of your competitors. Let your users know who you are and what you stand for. And get passionate about what you’re doing. If you’re not, why would anyone else care?
It all boils down to this one simple truth. You can have as much traffic as your server can handle, but if your website is poorly designed in terms of how users can convert, your revenue will be nothing more than a shadow of what it could be.
My advice, based on personal experiences, would be to bake the principles of conversion into your website from the very beginning. Failure to do so will hinder your business’ growth until the problem is remedied.
Be aware that even one simple issue with usability, overlooked because you’re intimately familiar with your own website, can result in hundreds, thousands, even millions of dollars in lost revenue. Still in doubt about testing your site for usability and conversion?
Then I highly recommend you read this article about how one small design element, a button, lost one nationwide retailer $300,000,000 in sales. Yes, you read that correctly. $300,000,000. Conversion rate optimisation is something to take seriously.
By now you’re either intrigued by lead generation or not. If you want to start then you should be aware that it isn’t a bed of roses. As I’ve already touched on, lead generation is competitive – don’t be under any false impression that you can make an easy buck by setting up your website and doing little else.
It won’t happen that way. If you want to get anywhere you’ll have to put in a lot of hard graft before you get any real traction. Setting up a website is easy, but getting enough traffic to it that actually converts is a different matter altogether. You’ll have to create some ‘pillar’ content that is truly outstanding in its quality.
You’ll need to build high quality links to your website using your best content as leverage if you want to get any organic search traffic. Eventually you may also want to start a paid search campaign, which also requires ongoing management. You may be most interested in lead generation because of its somewhat passive nature, but don’t fool yourself.
It takes a lot of hard work to get it going, and because it’s generally competitive, you’ll have to keep investing time and effort in your business to maintain and/or grow it. You can do that work yourself, if you wanted, or outsource the work on an ongoing basis. I don’t think that it will ever be a 100% passive income, but it can be relatively hands off if you can find the right contractors for the job.
If there’s one thing I’ve learned, it’s that lead generation isn’t just about throwing up a website and slapping on a form to capture leads. It’s much more nuanced than that. It’s competitive, it takes time to get anywhere, and given Google’s recent algorithmic changes, the outlook isn’t certain.
But this post was never intended to put you off lead generation, the opposite is true. I hope that you’ve learned about the value of leads and how to get them. Most of all, I hope it motivates you to start something!
Andy is the co-founder of Credit Card Compare, a comparison engine for Australian credit cards. He also helps edit their blog, the aptly named Credit Letter.
My Thoughts: Lead generation is one form of affiliate marketing, one which I too am involved in to a certain extent (certainly not exclusively). As you read Andy write, traffic generation is one of the biggest paint points. This is no different than most online business models and a big reason why I stress on search engine optimization and internet marketing so much. (Lead generation, specifically within the financial services industry is an extremely competitive area with a ton of players both online and offline).
Another important point to note is that the lead generation business model is not passive by any means, at least not initially, with a decent amount of effort required on an ongoing basis. Personally, I feel it is one of the more active business models online relative to most online business models due to the inherent dynamic nature of the business and the players involved (you are working with an ever changing environment such as vendors, terms, rules, etc).
Readers: How do you feel about the lead generation business model online? What do you see as the pros and cons involved? Given that time is our most precious yet limited commodity, are there easier, more lucrative and automated businesses to run online?Previous: Keyword Research is Critical to Your Success with Niche Sites