Is starting a lead generation business worth it?
If you’re looking for an answer to the above question,
You’ve landed on the right blog.
Lead generation is a recession-free business that you can run from anywhere in the world. It is like affiliate marketing, where you support other businesses to grow by getting your commission.
Starting a lead generation business is lucrative. As per a source, Clutch has 500+ lead generation successful companies listed on it. Many of them have 1000 or more employees.
The facts above clearly signify how worthwhile it is to start a lead generation business.
This blog provides a step-by-step process on how to start a lead generation business from scratch.
So, let’s get started.
- What is a lead generation business?
- Who can be the potential clients for a lead generation business?
- What are the benefits and challenges when starting a lead generation business?
- How do lead generation businesses make money?
- How to start a lead generation business? 6 steps to implement
- 9 Lead generation best practices to convert leads like a pro!
What is a lead generation business?
Lead generation business involves generating and selling leads to other businesses that want to grow their customer base.
It bridges businesses looking for ideal customers and audiences looking for the most appropriate brands/solutions.
Who can be the potential clients for a lead generation business?
Every business on this planet needs customers to start, sustain and grow its brand.
So, all B2B businesses from various industries can be potential clients for a lead generation business.
You must filter out the most appropriate clients based on your expertise and niche.
What are the benefits and challenges when starting a lead generation business?
Well, there is no such thing as an “ideal business” because every model has both – benefits to encourage and challenges to overcome.
1. What are the most prominent benefits of starting a lead generation business?
- Low investment
- Location freedom (Run from anywhere!)
- High on demand
- Simple business model
- Easy to validate the business idea
2. What are the noticeable challenges when starting a lead generation business?
- High competition
- Lead acquisition
- Delivering leads
- Fluctuating commission percentages
How do lead generation businesses make money?
The lead generation business mainly makes money by selling the nurtured leads to its clients. They can either quote a structured fee for the number of sales-qualified leads or can earn through a commission model.
For building a prosperous lead generation business, you must be clear about a few important factors:
- What is the potential industry for a lead generation agency?
- How will you generate a lead?
- Who are the appropriate clients, and how to get them initially?
- How to decide the commission for your lead gen business in the first place?
To help you with this, we have given a step-by-step process covering every crucial aspect of beginning a successful lead generation business.
Let’s get started.
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How to start a lead generation business? 6 steps to implement
Starting a lead generation business isn’t a quick process; you need to analyze the market to identify the lucrative industry and build lead generation assets simultaneously finding and pitching your clients.
With a clear strategy, you will succeed in getting your client and making a prosperous deal that will make your lead generation business profitable.
Let’s understand the entire journey of starting a lead generation business step by step.
1. Choose your industry and niche
The foremost step when starting a successful lead generation company is to decide which industry to focus on. The best choice is to go for a booming industry that might not have excess competition.
See the image below to find the potential industries that can be your likely client.
The smart way to do this is by picking a specific niche.
For example, be more specific, like diet chocolates, instead of choosing a chocolate industry.
Here are some essential tips that will help you in your market research to decide on your niche:
- Find out how much knowledge you have about the market.
- Figure out the profit margin and long-term value from the leads.
- How competitive is the niche?
- At what level does the market get saturated?
Firstly, make a list of industries that you see worth considering for a lead generation business. Do thorough market research based on the above questions. This practice will help you in generating leads faster.
Based on your analysis, try to pick the one with good demand, has the least competition, can give a high commission, and isn’t saturated yet.
Note: Narrow down your domain for effective targeting. Follow the pattern of narrowing down mentioned below.
Marketing software > email marketing software > email marketing software for eCommerce companies.
2. Develop lead generation assets
The most crucial step for a lead generation business is to develop the necessary assets, as your business is highly dependent on them.
Lead generation assets include web content that can help attract the most relevant audience for a particular industry, niche, etc. For example, healthcare brands share patient and expert testimonials to get the right HCP engagement for their business.
Make sure your lead generation assets are up to the mark with the following factors:
- Relevancy: Your audience will show interest in your content if they find it useful.
- Depth: Your content must be able to provide specific insights.
- Original value: Your audience looks for content that is unique and interesting to their mind. Remember, unique content builds more prominent brands!
- Intrigue power: Your content must spark curiosity that leads to more engagement.
- Actionability: Your content must be able to trigger your audience to act. This is where the money lies!
The above factors will identify the purchase intent of the leads, so try to make a resourceful asset. To make your marketing assets appealing, use tools like Canva and Wix.
Building a powerful lead asset is a middle point of the process; you can implement digital marketing for lead generation assets to increase visibility and drive more leads.
You can use Salesmate’s Web Forms or Chat Journeys on your website to successfully capture your leads.
Capture leads within seconds!
Get Salesmate's lead capturing Web Forms to collect every potential lead.Explore Web Forms
3. Close clients along with lead generation
The process of lead generation and pitching clients should go hand in hand. It must go in a flow; once leads are generated, you must have the client make a sale.
Those new in this business make the mistake of pitching clients after they generate the leads. It’s better to do both processes simultaneously; lead generation with the assets and client pitching.
Presumably, I believe you are new to this game. So let me tell you, every lead generation business must have a backend where it collects leads generated from its assets.
A backend is a client-facing interface where they can see freshly generated leads.
Your clients can filter data, find contact information, and make reports using this backend.
Let’s learn with an example.
Suppose you have a blog ranking for pet care services. It’s ranking well on Google and gets thousands of visits every month.
You have attached a lead capture form as a lead magnet on this blog, where you collect lead information. So, once the visitors start filling out the form, you require a backend to collect this data in an organized manner.
There are two ways to collect the data:
Route it to a spreadsheet
This is a general and unorganized way to gather leads in a spreadsheet. You can rely on spreadsheets at the start of your business, but not for too long.
It gets uncomfortable and messy.
Develop a lead database
If you have a proper lead generation database, you can sort leads. Also, filter them out to identify the sales funnel they belong to.
This is where the Salesmate ecosystem can help you. Using Salesmate Web Forms, you can automatically collect lead data into CRM.
You can easily filter and sort the leads using 70+ filters in Salesmate. You can also create custom fields in Salesmate to identify leads in a better way.
In Salesmate, you can use Live Chat, Chat Journeys, or Meeting Scheduler to collect leads with Web Forms.
With Salesmate, you can enrich your prospects’ profiles and set up lead generation campaigns to nurture them to get a more qualified lead for your client.
4. Reach out to your potential clients
Unlike any other business, you need potential clients to monetize your lead generation business in real terms.
As I mentioned, you should start approaching clients with lead generation efforts.
Here, your communication and networking skills will play a vital role.
Here are some of the most promising ways to get your potential clients –
1. Trace your competitors’ lead generation efforts to beat them.
2. Build a list of clients along with key information such as the website, contact info of managers/reps, company’s email, and address.
3. Research your client thoroughly. For example, their new branch, potential products matching your leads list, marketing channels, their struggles with lead generation, etc.
4. Reach out to your potential clients with your best cold pitch through emails, LinkedIn, Twitter, or any other active platform.
5. Create a sorted commission structure
Your lead generation business will become more lucrative if you can nail down the margin between the lead acquisition cost and your selling price.
To discover the profit margins for building a moneymaking lead generation company, you need to be clear about the following:
- Your target audience and their demands.
- The type of pricing model that you want to proceed with.
- Your focused channels to generate leads.
Here are two of the most reliable pricing models you can use for your lead generation business.
Model 1: Flat fee retainer
In this model, you send a certain number of leads to your clients monthly at a fixed price.
Every business would love to save time in lead nurturing. So, they would be happy to spend money on pre-qualified leads for their business.
The price may vary depending on your industry and the quality level of the lead.
When choosing the fee model, remember that it might be harder to set a premium price as you deal with a fixed number of monthly leads.
The pressure of meeting the target of generating a fixed number of leads monthly results in degrading lead quality.
Hence, if your clients experience a lesser conversion rate, they will no longer prefer using your services.
Also, if your client has a small business, their sales team might not be able to handle the fixed number of leads per month.
Probably, they can be inconsistent in terms of buying as they would complete the existing stock first.
Model 2: Cost Per Lead (CPL)
This model can be understood by its name; you will charge per lead to your client.
On average, you can charge somewhat from $20 up to $100 per lead; again, the price will depend on the industry and qualification of the lead.
CPL is quite lucrative over flat fee mode; hence, most lead generation businesses sell leads based on this model.
There are three main reasons for the CPL model’s popularity:
- A better understanding of clients’ needs lets you generate high-quality leads.
- Clients are ready to pay if a single motive gets achieved, e.g., prospects taking a free trial of your product.
- Profitable as you can increase your profit margins with happy clients.
The cost per lead model gives various opportunities of making money with different variations:
- Cost per meeting
- Cost per form filling
- Exclusivity of leads (you can send lead data to one client exclusively.)
If you don’t know how to calculate the profit, see below:
Profit = Selling price of leads – Lead Acquisition Cost
I hope you get a thorough idea about the models of charging money for leads.
6. Develop a solid process to filter and distribute leads to clients
The most challenging and critical work for a lead generation business is to provide the most relevant purpose-meeting leads to their clients.
Once you’ve generated a customer list for a client, you have to figure out how likely the lead is ready to convert before you handover it over to your client for their business.
An unqualified or non-converting lead will spoil your business reputation as you lose your potential clients.
So, how to protect your business from this trouble?
You must have a solid lead nurturing process to filter out the most effective leads to delivery.
Salesmate software can help nurture your leads to find highly qualified leads. You can send targeted emails to your leads and track their engagement. Plus, you will get free customizable email templates.
You can automate the email campaign to stay one step ahead of your competitors.
Note: Providing high-conversion leads to clients is an excellent opportunity to increase your profit margins by raising your prices.
Those who have started or are planning to start a lead generation process must take a free trial to test their business potential.
Nurture quality leads?
Get Salesmate and nurture potential leads with email automation, lead scoring, and segmentation.Start your free trial
9 Lead generation best practices to convert leads like a pro!
So, once you have finalized your industry and niche, more significant efforts are needed to acquire leads to get started with your lead generation business.
I have mentioned the most practical ways to generate potential leads for your client’s business:
To explore more interesting lead generation examples, check out this blog.
Generating high-quality leads for other organizations is a profitable business for people with good knowledge of sales and marketing.
Below are the key takeaways for you:
1. Lead generation businesses generate a list of potential customers for other’s businesses and make money by selling to them.
2. Industries like finance, healthcare, technology, education, tours & travel, etc., can be your potential clients.
3. Low investment, location independence, a simple business model, and high demand are key benefits of starting a lead generation business.
4. Challenges coming across in starting a lead generation are a high competition, fluctuating commission percentages, lead acquisition, and delivery of leads.
5. Lead generation earns revenue by selling high-quality leads to their clients.
6. There are mainly 6 steps involved in starting a successful lead generation business. It involves; finding your industry, developing your lead generation assets, pitching potential clients, making the deal, and distributing leads to clients.
7. The two reliable commission structures are flat fee retainer and cost per lead (CPL).
It is a high-income business but requires the right strategy, effort, patience, and robust technology support to succeed.
Salesmate CRM is user-friendly, so you can easily automate all your business efforts with data entry and marketing automation. You oughtn’t to be tech-savvy to establish a successful lead generation business.
Get your free trial now!
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Sonali is a writer born out of her utmost passion for writing. She is working with a passionate team of content creators at Salesmate. She enjoys learning about new ideas in marketing and sales. She is an optimistic girl and endeavors to bring the best out of every situation. In her free time, she loves to introspect and observe people.