Dealing Directly With Companies In Lead Generation

Status
Not open for further replies.
Fiver

Fiver

New member
Jan 30, 2009
2,011
12
0
1. I'm going to do a lead generation campaign for a company that sells 3 different packages of a service. I will collect leads and then the company will call the customer to subscribe to the service. They want me to turn over the leads and pay me per sale but I'm not sure how much to charge.

The standard in AM seems to be 10% (I think). But if the Advertising Network is cut out of the equation, how would that change the percentage?

2. Is there any way I can track what leads I hand over actually translate into sales and which one of the 3 packages the customer bought?
 


Per sale can be hard as hell. You gotta have a system to follow up and you have to wait to see if they can close the deal. I hate being that involved. Not to mention that a lot of small business owners seem to get amnesia and act as if they cant read a contract that you signed with them when it's time to get your money.

I much rather this.

Here are the leads.
Pay me for them.
If you like the quality
Buy some more.

Lately I've been selling leads, but I only charge the company for 80% - 90% of the leads I sell them. Even though my leads are very good, there will always be some fallout so I'm willing to adjust my pricing for that..



I get my money up front.
it has been working like a charm.
 
kimboslice said:
Per sale can be hard as hell. You gotta have a system to follow up and you have to wait to see if they can close the deal. I hate being that involved. Not to mention that a lot of small business owners seem to get amnesia and act as if they cant read a contract that you signed with them when it's time to get your money.

I much rather this.

Here are the leads.
Pay me for them.
If you like the quality
Buy some more.

Lately I've been selling leads, but I only charge the company for 80% - 90% of the leads I sell them. Even though my leads are very good, there will always be some fallout so I'm willing to adjust my pricing for that..



I get my money up front.
it has been working like a charm.
Click to expand...

Yeah, I originally proposed doing it this way and I think I may stand firm on it now. I'm involved in their services myself so we have a semi-trusting relationship...however...even if they are fully honest with me and pay me for each sale, it could take longer than expected to get the money. So really, there's that and the trust issue, isn't there?

How then do you decide what to charge per lead?

The variables are:
1. Average cost per package bought from an Adwords lead (The problem is...they haven't kept track of what package each of these leads has bought so there are no records available.)
2. Conversion rate of Adwords leads

They are saying that the leads I give them won't always convert and they don't wanna pay for batches that don't. How do you respond to this and what do you propose I charge them percentage-wise?
 
Fiver said:
They are saying that the leads I give them won't always convert and they don't wanna pay for batches that don't. How do you respond to this and what do you propose I charge them percentage-wise?
Click to expand...

Of course they arent always going to convert. Thats why its called a fucking lead and not a sale. Its the businesses job to close the lead and by taking a % of sale you are trusting that this business is actually good at closing leads. Which they probably arent.
 
they need to be told that they are paying for an advertising campaign, not for sales.

You feel that confident in your ability to generate response that you are willing to risk your own money on the basis of a pay per
Performance deal. But you're only willing to risk your own performance and skills, not on theirs, which may be excellent, but you have no way to measure that yet. Offer the option of tracking the closes against the leads -- which will allow you to know what the true conversion rates are, etc. And then, if you mutually agree to, convert to a % sale at a later date.
 
Good stuff.

I'm curious...if they ask about what avenues I'm going to use to advertise (Adwords, Yahoo, etc), do I need to tell them?

Obviously I want to keep as much secret as possible. What would you all keep to yourself other than your keyword list of course?
 
I sell many leads directly. I have never had a legal issue nor much of any issue. Forget tracking sales....sell them the leads and be done. Best way is to bill them upfront for a set amount (say 250) and let them set a delivery schedule (like 25 a day).

To avoid issues here are a few tips:

1. Only work with companies that have "worked" Internet leads before. New buyers seem to think that leads will be easy sales but in reality they need to pound the phones.

2. Never sell to a "one-man" shop.

3. Ask what they have been doing. If they indicate that they have been trying many lead providers and are not happy, walk away. They are looking for something that does not exist. All the best buyers have sales reps and are looking to simply add more leads to their existing stream. They already understand the game.

4. Rather than having a return policy, over deliver by around 10%. It's a lot less headache. Tell the client that it will rarely go over this and if it does you will take care of it.

5. Take check by fax. It's a cheap service and you can avoid the chargebacks that come weeks later by broke companies. I actually judge this ona case by case basis but typically there are no objections to this method of payment.

There are 100 other things but that's a start. As for telling the client how you generate leads, you have to. But saying you generate leads from search engines is not exactly giving away too much. They are not going to ask how, what, where or why. Just have a sample lander to show.
 
Waiting to hear about sales sucks. What if the leads are handed to someone who cant close the sale then hes burning your leads to the ground. Your better off charging for the leads
 
A few people asked about a "check by fax solution. It's cheaper than dirt...like $100 a year

Vcheck - Instantly Accept and Print Checks - Vcheck / Echeck to Accept Check by Phone, Check by FAX, or Check via the Internet

I am sure there are others...and I have 0 to do with these guys before anyone wants to bust my balls. :)

One thing to add to that list is never, ever give out free/sample leads. There are folks that literally call/email 50 companies a day asking to "test" their leads. We always tell them they can test by buying a small amount and if companies are giving you free leads they probably suck.
 
How do you know what to charge the company per lead?

If they give you the % of leads converting from online ads + average sale/customer...how then do you determine what to charge them when you hand over the leads?

Let's say you hand over 100 leads and 10 convert into sales. The average sale is $3000 for the yearly service.

10 sales * $3000 = $30,000 made for the company
30,000 / 100 leads = $300/lead

Is this correct? But if it is...what company is going to pay that much per lead?
 
Fiver said:
How do you know what to charge the company per lead?

If they give you the % of leads converting from online ads + average sale/customer...how then do you determine what to charge them when you hand over the leads?

Let's say you hand over 100 leads and 10 convert into sales. The average sale is $3000 for the yearly service.

10 sales * $3000 = $30,000 made for the company
30,000 / 100 leads = $300/lead

Is this correct? But if it is...what company is going to pay that much per lead?
Click to expand...

They probably won't pay $300, because they actually need to make a profit too. Also how many services out their cost $3,000/year? The numbers work out fine.
 
I concur with most of what is said in this thread.

I've been dealing with the lead industry for a decade. The business is fairly cut throat. Never do a pay per sale because it's impossible to track on your end. Pay per lead, and get them to pay up front when possible. The only exception to this is if the company that you have been dealing with has a really great reputation and has been around for many years.

Never accept credit card payments. Check by fax is ok as stated above, but preferably take wire transfers instead.

It's also usually a good idea to have someone call on any returned data that is sent back to you in order to double check that it is in fact bad data.

Stay in total control of your campaigns. If the company is worth a shit they will accept either a ping and post or direct post of the data from your own sites.
 
you can get a 1300 number in Australia there $25 a month. put it on the site, if a customer rings it instead of filling in a form the 1300 number will redirect to the lead buyers office. the 1300 number provider will provide you with reporting regarding how many calls have been made and redirected.
another add on service.

This is something i have been researching alot lately. very keen to start doing this.
What scripts / software are people using to track leads and auto pass them on to lead buyers. also in what format? EDI, Email, RSS?
 
As far as scripts for tracking and managing leads, I wouldn't begin with that if you're just starting out. Get the business model functioning first before you focus on automation of any processes.

This is why. If you're dealing with local companies you are likely going to have different offers, types of leads, sub types of types of leads, different price per leads, different delivery terms, payment terms etc.

Get started with one or two, keep track of everything on a spreadsheet. If things are working out for you, nothing at all is better than having your own system created. Only you know exactly what you need in order to integrate tracking and delivery into your already successful systems.

Really good lead management systems are expensive since they usually include a consumer end, affiliate management, back end management, and various delivery systems. I should know, I developed one that took a couple of years to create and was selling it for 15k a pop.

As far as passing leads on to buyers, it's dependent on your buyer. If it's just some local business then they should not have an issue with having their data sent to them via a spreadsheet through an email. If they are finance company of sorts that are used to dealing with internet leads already, chances are they will have a ping and post system in place.

Ping and post is essentially a system where you send them a snippet of data (ping) and if it meets their criteria they automatically ping you back at which point the full lead is posted to them. These are more prevalent in lead companies though, but I have come across some end users that utilize them.

In any event, chances are you are dealing with a small local business that has no real internet presence. They don't have a real sales team or anything and probably just have some sort of receptionist or something to that effect. So an email with the data will generally be sufficient.

That's my 2c
 
I've done both, sale and per lead. The most I ever got offered for leads was $70, but the 'per sale' model converted into MUCH more money. Tracking is insanely difficult when dealing with a sales floor, then coaching, then comparing/updating stats manually so you know who sold what et al. Also depends on the leads you are sending in. If you have free opt ins they won't convert nearly as well as buyer leads, especially those that bought something with a $xxx price-point.

If you can set up a small price point and collect buyer info post sale, you should go on a per sale model. If you simply get 3-4 field forms filled out for a freebie, go for volume and $ per lead. If you can get your leads to phone the biz with your coupon code (1-800 number plus entering in your code) or similar incentive, your merchant will love you. People that opt to be proactive and phone in are much more inclined to spend.

Having said all that though, you better a) trust the merchant b) do your own QC, c) still expect to get shaved/skimmed a bit no matter what.
 
Status
Not open for further replies.
Top Bottom