I was inspired to write this post after reading Pat Flynn’s February 2011 Monthly Income Report in which he detailed some of the struggles he’s experienced securing private advertisers for his niche site. I’ve been there before too, and hopefully this post helps him and you to think about a different approach to niche site monetization: lead generation.
Lead generation is an often overlooked but very profitable way to monetize a niche site. Most commonly, niche sites are monetized with Adsense, affiliate links, and even some private ad sales. While Adsense and affiliate links work to a certain extent, it can be tough for a fairly new or even well established niche site to get interest from private advertisers.
I’ve used lead generation to overcome this on some of my niche sites, and my income from lead generation now surpasses what I bring in from Adsense and affiliate links.
I first became aware of lead generation after reading this Shoemoney post a few years ago. Now, the type of lead generation Jeremy suggests is slightly different than what I’m describing here in that his strategy involves building a site for one particular business or client, whereas what I’m going to talk about below involves using your existing niche site to generate leads for a variety of businesses or clients. But I definitely tip my hat to his post which turned the light on in my head regarding the possibilities of lead generation.
My simplistic definition of lead generation is gathering someone’s contact information and selling it to someone else for a fixed fee. You could say that its similar to affiliate marketing, but usually with affiliate marketing you are paid on conversion, meaning someone has to actually purchase before you get paid. Not so with lead generation. Companies simply pay you for the lead, then the onus is on them to convert that lead into a sale.
For example, I have niche sites about retirement communities. I know…contain your excitement. It just happens to be a topic I’m extremely familiar with, so it works for me. My website visitors are looking for information on the communities available to them, so in a nutshell, I collect their contact info., send it to the community for a fee, and the community sends them more information and gets in touch with them to try and make a sale.
You can learn a lot more about the basics behind lead generation from Shoemoney’s post I linked to above. When I was just starting out I also purchased and learned a lot from Chad Frederiksen’s Local Lead Plan. Local Lead Plan is definitely geared toward working with local businesses and building sites specifically for them, but I am applying a lot of what I learned in that course to my niche site lead gen activities. There are also some sample contracts provided in the course that I have put to good use when signing up new clients.
Email is the quickest way to get your proposal out to several businesses for consideration. Here’s a rough email template that I’ve had success with. Feel free to use/modify it to fit your niche:
Hope the new year is off to a great start for you.
I wanted to run a unique idea by you. I own the website, xxxxxxxxx.com and most of my website visitors are looking for more information about communities just like yours.
In addition to traditional advertising options, I also offer a “pay for performance” lead plan.
Here’s how it works:
If someone wants more information I have them fill out a form (name address, email, phone, etc.) which is then forwarded to you (or the sales office) to follow-up.
I charge $XX for any lead sent. Currently there are XX communities listed there now and they are getting around XX-XX leads per month.
The model works great because you only pay for actual leads sent, not “clicks” or “impressions” that end up being of little value to you.
My question is, would this type of model be of interest to you guys?
Would you be willing to test out the concept over the next month? I wouldn’t ask for payment for any leads sent the rest of this month. This would give you a chance to test it out and see if the leads are worth it to you.
Let me know what you think!
Direct Mail has also been good to me for getting new clients signed on. I usually send a two page letter, the first being an introductory note introducing myself/my site and the 2nd page goes into the details of my lead generation program. Here’s an example of what I send:
Now, I just send this in a standard #10 envelope, but if you want to step up your game you might consider sending your letters out priority mail to get a little more attention.
You may also want to test who you send it to in an organization. Sometimes I send it to the owner of the business, and sometimes I address it to the “Director of Marketing”. I’m still trying to figure out what works best.
You’ll hopefully start to get some call or emails from interested businesses. If this is your first time doing lead generation and don’t have any prior results to share, you might consider letting them test out your program for a few weeks for free or at a reduced rate. Be sure to cap their trial at a set number of leads. This will give them a chance to determine the quality of the leads you’re sending, and assuming all is well, you’ll have no problem convincing them to participate long term.
After you have a few clients running in your lead gen program, you should use your best judgement as to whether to offer a free or reduced trial to convert new prospects. In most case you can just reference the success others are having and more or less say “take it or leave it”.
Collecting and Distributing Leads
I use Wufoo to create forms to collect and distribute leads. I like it because it keeps track of all leads that come through the system and notifications of new leads can be automatically sent to me and the business I’m promoting.
The more information you collect from the visitor, the more valuable your lead will be to the business paying you for the lead. I require all my leads to include name, mailing address, phone number and email address. In my mind, and in the mind of the communities I work with, if someone is willing to give up all that contact info. they are a serious prospect. Much more so than say, someone who provides a fake name and a throw-away email address.
You’ll have to figure out what works best for you and the companies you choose to work with.
I try to keep the landing pages that my lead gen forms appear on as simple as possible. I use the “full width” page template so users don’t get distracted by links or ads in the sidebar. I’ve still got the regular header/navigation on the page though, so I’m sure I lose some conversions because of that. But most of my forms average between 20 and 30% conversion.
I’ve tested having just the form vs. a few pictures with a description of the information they will receive then the form and have found that the pictures and description version seems to convert better. I also include some “trust signals”, letting people know that their information will only be shared with the company they want information about. Here’s what one of my lead gen pages looks like:
Maximize the Opportunity
There are a few steps you can take to maximize the number of people seeing and filling out your lead forms. Here are a few ideas that have worked for me.
You want to highlight and make your lead gen forms more noticeable to visitors to entice them to take action and fill one (or more) forms out. I have links to lead gen forms where appropriate on my site based on the business and their location, but I also have a “Featured” page that lists all of them. After reading this article over at DIY Themes I’ve recently started using a Hello-Bar on my site which links to my “Featured” page and so far it seems to be working well.
You could also try a sidebar ad, a banner ad, or an ad at the end of your posts promoting your “Featured” page or individual lead gen forms.
One of the best things I’ve done to increase the amount of leads is to add each business individually as an auto-responder message to my newsletter subscribers. Because I have several clients I’m generating leads for, I have to be careful to spread these out, and be sure to intersperse them with pure content messages. This isn’t difficult, and even the messages that promote these businesses are seen as valuable content by my readers. I rarely get a spam complaint from these messages.
Most niche site owners don’t promote their sites via PPC. Since most niche sites are monetized with Adsense, it doesn’t make a whole lot of business sense to buy clicks from Google just to sell them right back to Google. But with lead generation, it’s different since you have the opportunity to buy clicks for much less than what your pay out per lead is. Just make sure you have your pages dialed in and converting at a rate you’re comfortable with before going down this road or you could lose your shirt.
On the first of every month I send my clients an invoice for all of the leads that were sent in the previous month. I use Freshbooks for this because it allows clients to easily pay online through PayPal or credit card, and I can also schedule late payment reminders to go out at set intervals (I use 5, 10, and 15 days) to clients who are slow to pay.
Most of my clients pay online but I do have a few that have to have a check cut by their accounting department and send to me via snail mail.
Advancing the Relationship
After clients see success from all the leads you’ve sent them, it makes it a lot easier to discuss other ways that they can put their business in front of your readers through banner ads, newsletter or e-book sponsorships, and the like.
It also makes it easier to approach other businesses to advertise on your site when you have a few “wins” under your belt that you can reference.
You now have a basic understanding of what lead generation is and how it can increase the profitability of your niche site, how to approach and land new clients, how to collect and distribute the leads, and how to get paid and advance the relationships you build with these clients.
The next step is to put it all into action. I’m interested to hear about your success, so drop back by sometime and leave a comment about your experiences with it.