In the realm of lucrative businesses, wouldn’t you like to build one where you don’t need to have a product to sell and still make a high income? Somewhat similar to affiliate marketing, a lead generation business generates leads and sells existing products and services for a fee.
In the United States alone, there are over 30 million small businesses that generate trillions of dollars in revenues combined. So for small business lead generation companies, there’s an almost never-ending stream of opportunities to make commissions off of.
Entrepreneurs like Anthony Sarandrea generate ~$100,000/day from their local lead generation business. Interested in starting your own lead generation business? We’ll make sure you know everything there is to know about setting up lead generation businesses with this article.
In this article, we have covered:
- What is a Lead Generation Business?
- Who are the best clients for a lead generation business?
- How to Start a Lead Generation Business? (6 easy steps)
- 5 effective channels to generate leads
Take a deep breath, and let’s get started.
What is a Lead Generation Business?
As mentioned earlier, a lead generation business acquires leads for clients who could then sell a product or service to these leads. Your clients pay you a fee since you are able to direct intended demand towards their products and services.
In the B2B lead generation business, clients pay for each lead generated if they meet the criteria given by them. You don’t have to wait for your leads to make a purchase before you get paid. In other referral models, like affiliate sales, you need your lead to purchase before you can get paid.
Clearly, there are a lot of potential clients to sell leads to. When this is combined with getting paid for each lead generated, the lead generation business becomes a very attractive opportunity.
Who are the best clients for a lead generation business?
Many different industries can benefit from lead generation services, but not all clients fit well.
The best clients for lead generation businesses are those that have low customer acquisition costs, which allows them to profit from higher volumes.
You should consider getting clients in some of these industries:
- Recruiters and headhunters
- Marketers and salespeople
- Advertisers wanting to create custom Facebook audiences
- B2B businesses
- Call centers
- Insurance companies
So how do you go about building a lead generation business? Let’s explore that next.
How to Start a Lead Generation Business?
Learning how to start a lead generation business isn’t very straightforward. To build a successful lead generation company, you must consider several factors.
- How do you actually generate these leads?
- How do you ensure these leads are likely to buy from your client?
- How much do you charge your client?
- How do you even get clients in the first place?
We have covered every aspect of starting a lead generation business throughout this guide.
6 steps to start a lead generation business from scratch
Step 1: Pick a niche and geography
As the first step, you want to pick a niche or category of products or services you broadly plan to sell. In order to succeed in business lead generation, you must select the right service to offer.
Here are some things you need to take into consideration, as you decide onto a niche:
- How much do you know about the market
- Economics — how much can your client make in margins and LTVs (Long Term Value) from your leads
- How competitive is it?
- Is the market itself saturated?
These are listed as per the priority – so the first thing you should consider working on is to list out all the markets you can see yourself becoming an expert in. Off these, you can pick the ones that are the least competitive, that aren’t yet saturated, and could make you the most in commissions.
Also remember, narrower the niche, bigger the opportunity. For example, narrow down from Finance into a subcategory, like Insurance, then further narrow down to pet insurance. This will improve your chances of success as a lot of these small categories have minimal competition in lead generation services.
Step 2: Develop client relationships
Strong relationships with clients are another essential part of the success of the lead generation business. Once you have identified your niche, start building relationships with prospective clients who might need lead generation services. Much like generating leads, you will have to sell your leads (or future leads) to your clients at the right price.
You can start by making a list of companies operating in the niche you wish to work with. Then using networks like LinkedIn, you can find people in Sales and Demand Generation roles that could be approached to sell leads.
To find the right decision-makers from LinkedIn, you can use chrome extensions like Saleshandy Connect. It lets you find verified email addresses of any professional within a second.
If you’re starting out from scratch and haven’t generated leads before, you can simply start reaching out to potential clients via emails. If you already have a list of clients to reach out to – you can use an email outreach tool like Saleshandy to nurture and build these relationships.
After getting acquainted with companies that are willing to work with you, you’ll need to decide the terms of the relationship. That is, what kind of leads do your clients need and how much would you be paid.
Step 3: Finalize commissions and fee structure
During your initial research, you might have considered the LTV of an average lead for your client while deciding the niche. Use this data to your advantage while negotiating your fee per lead (higher LTV= bigger fee). While finalizing the terms, make sure you cover the specifics around evaluating lead quality, payment schedule, etc.
There are standard rates set in this space — usually, for bigger ticket products (>$100k LTV) fees per lead ranges between $100-$500. So while you might have to stick to these rates initially, you can set up clauses that increase your fees as more of your leads convert. This makes for a win-win situation since your client also grows their business when you source better converting leads for them.
Step 4: Plan and build marketing assets
The operational success of your lead generation business heavily depends on your marketing assets. Marketing assets are web properties (landing pages, blogs, e-books, etc.) that attract leads who are looking for specific information. These leads often carry with the intent to purchase, hence making your marketing asset a magnet for these leads.
With the tools available today, building these assets happens to be easier than ever. Tools like Elementor, Wix, Webflow, and Canva are all really easy to use and can help you design websites and graphics.
The hardest part of getting your marketing content to work is making it visible. If your leads can’t find your website or eBook, you will never be able to capture them. You can post links to your content on relevant forums and communities where your leads might spend time.
Of course, reaching out to a large audience organically isn’t easy, so you can try other ways as well. Run lead generation campaigns that direct your leads to your website using ads. You can then capture those leads and subscribers with a lead capture tool.
Step 5: Nurture leads before handing off
Once you’ve captured leads through your Marketing channels and lead generation campaigns, you want to make sure they are likely to convert. You can do this by enrolling them in a nurturing program. Lead nurturing is a way to exchange more information with your lead and help them get interested in your clients’ products.
You can nurture your leads by enrolling them in a lead nurturing email sequence. Again, this can be done using Saleshandy, which helps you multi-stage automated emails and tracks engagement on these emails.
Feel free to check out Saleshandy’s detailed guide on planning and testing lead nurturing email sequences.
Nurturing leads makes sure you’re only passing on quality leads and helps your client convert more. Especially if you’re dealing with high-value leads, you will need to be extra careful in passing on a lead, since your clients are paying you more upfront.
Step 6: Track results and optimize
Once you have started passing on leads to your clients, ask them to share conversion funnel metrics with you. If you have set up different channels for your lead acquisition efforts, this data will help you decide which channel to prioritize.
Tracking and analyzing conversions coming from your leads is crucial when it comes to making optimizations. For example, if you’re using multiple sets of Facebook Ads to generate leads for a client – conversion data will tell you which Ad set was more effective.
You also want to be able to use this data to re-negotiate terms, if your clients have been getting consistent conversions from your leads. It essentially also enables you to scale your business and run it more efficiently.
Now we’ve learned how to acquire and sell leads to clients. However, this isn’t effective by itself. You also want to be able to strategize around certain parts of your business to maximize profitability for your lead generation business.
Let’s explore what channels can be used for lead generation.
5 Effective Channels to Generate Leads
1. Cold Emails
Professional communication can be most efficiently conducted by email. Cold email is the most effective channel for lead generation that gives a high return on investment. It is highly targeted, which is one of its most significant advantages. Here you are only focusing on the audience who might be interested in your product or service.
With your list of prospects, you can send personalized automated cold emails. In this case, we’ll see how to run lead nurturing campaigns on the email outreach automation platform, Saleshandy.
1. Signing up on Saleshandy
Sign-up on Saleshandy using your Google or Microsoft account.
2. Create a new sequence
- After signing in, navigate to the “Sequences” on the top left side of your dashboard. Click the “Create Sequence” button in the upper right corner to create a sequence.
- Click on “Add Step” and start composing your email on the next screen. Make sure your subject line and email body are personalized with mail merge tags. After you’re done with this, hit save.
- Once you’re done adding the Step 1 email, you can add auto-follow-up steps by clicking on “Add Step”. A new editor screen will appear similar to the one in Step 1. You can create as many steps (sequences) according to your requirements.
Check this guide to learn how to personalize your email outreach for better engagement.
3. Upload email contact list
Create a CSV file with the lead’s email ids and corresponding personalization fields. Upload this CSV file in the “Add Prospect.” You can also add this manually. Saleshandy verifies and cleans the email list to ensure a lower bounce rate.
4. Send a test email
After writing the perfect email and setting up the sequence, it’s time to send a quick test email. This allows you to check for any errors.
5. Send or schedule an email sequence
Once done with the above steps, it’s time to activate your email sequence. To begin sending emails, toggle the button in your sequence. Saleshandy will start sending your emails depending upon the schedule you have set.
Saleshandy keeps a time interval between two consecutive emails of a few seconds/minutes. This helps build a good sender reputation score and ensures better email deliverability. It will make your ESP believe it is a human-like sending.
6. Analyze and Improve
Once your campaign is completed, you can get a detailed analysis of your email sequence. You’ll get access to your campaign’s performance metrics, like open rate, link clicks, reply rate, etc.
With all the data about your campaign’s performance, you can then test new templates and benchmark them against your best results. This process will make it very efficient to qualify your leads before they can be dropped/passed on to your client.
You can export this data to Excel spreadsheets.
Learn how to set up an email campaign (Video)
2. Content Marketing
Content marketing is another most popular lead generation strategy for inbound marketing. It refers to the process of creating and distributing valuable content in multiple formats. It is created to help your audience, and ideal customers stay informed or gain new knowledge.
It helps you create an audience, build trust, and ultimately make them buy from you or refer others to you. Following are various mediums that can be used to create and distribute content.
The majority of content marketing efforts are focused on blogs. These will drive traffic from search engines and social media. The focus of creating a blog should be to solve the user’s problem and give them information. You can create resources like how-to guides, X best practices, X steps, etc.
This helps to cater to the user’s search demand, drive attention and eventually scale your lead generation.
- Guest posts
There are a lot of websites that have write for us pages for guest writers. Guest posts are similar to blogs, but the difference is that you publish this on other websites. Just like blogs, they also drive traffic and nurture your target audience. You capture leads by linking to the content of your website and generating leads from referral traffic.
You can email newsletters to your prospects and nurture them. Newsletters are used to direct the subscribers to the new content on your website. They enable subscribers to consume more content regularly. Over the long term, this creates trust and reputation, which ultimately generates leads.
3. Search Engine Optimization (SEO)
Search engine optimization (SEO) is the practice of driving organic traffic to your website from search engine results. It might sound simple, but optimizing for search engines involves everything from the physical structure of your website to the keywords you choose for blogs.
With customers using search engines at every step of the buying cycle, SEO helps you to remain top of mind for them. It takes time to show results, but it becomes one of the most effective channels that get you leads in the long term.
4. Paid Ads
Paid ads are an inorganic way to reach your audience. Here you will be paying for ad space. The end goal of paid advertising is to land visitors to your website and convert them to leads. Ads networks primarily consist of search engines like Google, Bing, & Yahoo and social media platforms like LinkedIn and Twitter.
5. Social Media
One of the best ways to generate leads and increase organic reach online is to utilize social media. Using social media increases your content’s visibility on search engines and users’ feeds, just as you do by blogging.
What to take away?
Generating leads for other companies can be a great income source for marketers and salespeople who can understand and serve the leads they acquire. It doesn’t require a product, only content, which can be a gold mine for leads if given visibility.
Marketing assets start taking care of themselves as your content selection piles up, eventually requiring minimum effort from your side. If you’re someone who likes building and resent operating, building lead generation companies will enable you to do just that.