How to Start a Lead Generation Business

Written by Tyler Day

My journey as a digital marketer started in 2012 when I figured out that people were making tons of money online through “affiliate marketing”.

Affiliate marketing is basically selling other people’s & services products for a commission.

I started in 2012 selling other people’s courses via a blog that I had started not long before, and I soon figured out paid advertising was a better way to increase my earnings. My main focus back then was to find an info product that sold for a few thousand dollars and then promote it as an affiliate for 75% commission.

I was soon earning a few thousand dollars a month in profit which was great money for a college student. However, a few years into my affiliate marketing journey around 2015, Peter and I discovered a completely new way to make money online.

We discovered that instead of getting paid a commission whenever we generate a sale, we could instead get paid to generate leads for other businesses, and switched to a lead generation business model.

What Is Lead Generation?

Every company needs sales. However, in order to close on sales, the company first needs to focus on generating leads.

A lead is a person or business that expresses interest in the products & services you promote by submitting their info, which is then used to follow up with them; with a view to convert those leads into sales.

There are many different ways that businesses generate leads. They might run their own ad campaigns in-house, or they might rely on an ad agency/lead generation company to do everything for them.

Many choose to leverage affiliate marketers like me to generate leads for them; paying a fixed price for every lead they generate.

Where To Find Lead Gen Offers To Promote?

Finding companies that are willing to pay for leads is one of the biggest problems a new marketer has to overcome. However, in reality, this is the easiest step, the simplest way to find lead gen offers to promote as an affiliate is through an affiliate network.

An affiliate network is an online program that connects companies with marketers so they can generate sales & leads for them, at an agreed-upon cost.

However, instead of working with the company directly, you go through the affiliate network as a middle man.

Affiliate networks often have hundreds of offers for marketers to promote in one place, allowing you to pick and choose what you want to promote – based on what the offer is and the commission available.

You will be supplied with a unique personal URL from the affiliate program for each offer you choose to promote. Whenever someone becomes a lead through your link you will get paid.

Want to find and join an affiliate network? Check out OfferVault for a list, or message me privately.

Anyone can join an affiliate network and start promoting offers, which makes it very easy to start generating leads in exchange for a commission. You don’t need to schedule pitch meetings with companies to offer your services, asking if you can generate leads for them.

You can just log in to the affiliate network, pick a lead gen offer and start generating leads and getting paid without having to talk to anyone.

How Do You Generate Leads?

Once you find a lead gen offer to promote through your chosen affiliate network, the next step is to start generating leads so you can start getting paid. The only way to generate leads is by driving web traffic to your link.

There are two main types of web traffic, organic & paid traffic. Organic traffic is traffic that you generate for free via a blog, youtube channel, Instagram account, etc.

Paid traffic is traffic gained through paid ads that you pay for on a platform like Facebook, Youtube, Google, or Snapchat.

When I first started affiliate marketing, I focused heavily on free organic traffic via blogging because I was basically broke. However, this was an extremely slow and painful way to get started; I was making barely any money through organic search.

It wasn’t long before I realized that if I wanted to make a significant amount of money, I would need to learn how to correctly implement paid traffic into my marketing campaigns.

The reason why paid traffic is more effective than organic is how easy it becomes to scale your campaigns quickly. The problem with organic traffic is that if you want more results, you need to put in more hours to create content, build links, and wait for Google to assess your site authority.

With paid traffic, if you want to scale you simply increase the ad spend budget.

The lead generation business model using paid traffic is rather simple. Your goal is to spend less money to generate a lead than the affiliate program pays in commission.

For example – let’s say that you are getting paid $10 / lead for an auto insurance company, you should be aiming to spend $8 or less on paid ads per lead.

The difference in cost between ad spend and commission is your profit margin, in this example, the profit was $2 or 20% net ROI.

Why Quality Matters for Paid Lead Generation Strategies

In paid lead gen there is one major factor that you need to pay very close attention to – lead quality.

For example – let’s say that you generate 100 leads at $10/each for an auto insurance company but none of them were remotely interested in getting a policy.

The company has just paid you $1,000 and nobody signed up for an auto insurance policy.

This means that your leads were unqualified and of poor quality.

In this situation, the advertiser would likely ask you to stop sending them leads, and may even refuse to pay for your leads.

The best way to make money with lead gen is to send the highest quality leads that you can. There are several ways to qualify your leads, but the biggest contributing factors for generating quality leads is the targeted audience and your ad copy.

You want to make sure that you are running ads to people who are in your target demographic and that they are interested in what you are offering.

Facebook is a great place to source high-quality traffic.

The reason we love Facebook ads is the amount of data they have on their users, FB will only show your ads to people who are really interested. They gather data on their users in house by tracking what people click on or view, and they also buy data from most major websites around the internet so they have everybody’s purchase history and interests nailed down.

While this might annoy the user from a privacy standpoint, it’s great for marketers that run ads!

Another way to make sure your lead quality is good, is to make sure that your ads are clear about what the offer is and to not mislead anyone into becoming a lead. You can even improve your quality by using intent/action based ad copy such as “Click Below & Get An Auto Insurance Quote Now” etc.

That way there is no question about what the user is clicking on, and why they are becoming a lead.

How to Start a Lead Generation Business

Once you become profitable promoting a lead gen offer with paid traffic, it is time to scale up. This means increasing your ad spend so you can make more net profit. If you are spending $100 / day on ads with at least a 20% net profit margin, then you should make it a goal to increase your ad budget to $1,000 or even $10,000+ per day. Then you can start making some real money.

Eventually, you want to build a team of experienced media buyers – increasing the amount of testing you can do, and boosting the number of campaigns you can run at once.

This can be done with remote workers, or by building an in-house team within your own digital agency. Anyone can become an excellent media buyer with the right training and, in some cases, it is better to hire people with the right attitude and give them the necessary skills the succeed.

This builds loyalty within your team, leading to longevity and continued success for the lifetime of your business.

However, this is easier said than done.

In the near future, we will be releasing some more advanced training on lead gen so stay tuned…