selling leads - pricing structure

animalstyle

animalstyle

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An idea I am putting together has variables that can come into play to determine the value of a lead. One lead could bring the company anywhere from $80 to $600 or even more. An example would be selling a restaurant a lead. The number of people in the party determines the possible revenue.

During the lead collection I will gather information similar to the example above.

My idea is to assign a base value to the lead, and then an additional value based on how much potential the lead has. I can do this all mathematically and show the buyer the reasoning.

Has anyone done anything like this with success? Any other successful approaches?
 
Also, is it poor form to start collecting leads before you have deals in place to sell them?
If you do that, whats the best thing to do with them? Maybe let them get a little stale but use them as leverage to sign a deal? I have X leads for you already....
 
animalstyle said:
Also, is it poor form to start collecting leads before you have deals in place to sell them?
If you do that, whats the best thing to do with them? Maybe let them get a little stale but use them as leverage to sign a deal? I have X leads for you already....
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Send them over for free, give them a taste and get them coming back... Even drug dealers know this! Probably the easiest way to get a partner in the right niche.
 
I always offer my leads for free for 1 week. Also it is easy to price leads, just call someone else who sells leads in your niche and act like you're interested in buying, sell for that price.

Leads depend on industry, could be xx.xx, could be x,xxx.xx. Depends.
 
Yup, No good letting the leads go stale, they need to be hot as f**k to extract the best value from them.

Offer X amount of test leads to a bunch of sites on page 2, page 3 for searches / niches you operate in. If they can close sales on them, talk figures.

I've a site for a mobility product that has been generating leads for years, I send them to a couple of firms. If either closes a sale, I get $800 commission. I don't get paid per lead as such, it's more like an affiliate deal but it's not tracked or anything. But the companies know they don't get anymore leads if they don't keep me happy. Everyone wins.

Best thing about this lead gen site is, I didn't have to do anything. It was a dropped domain that had a ton of links in forums and on listings pages for the type of products. So just build a nice site with a lead form, and away you go. It hardly even ranks in any searches.
 
tim2963 said:
I always offer my leads for free for 1 week. Also it is easy to price leads, just call someone else who sells leads in your niche and act like you're interested in buying, sell for that price.
Click to expand...
Nobody else collects and sells leads like this in this niche so I can't compare.

What I can get is an average per visitor value and an average number of visitors (think average number of diners in a group). I was thinking of doing a percentage of the estimated total (average value x average number of visitors) Was thinking of asking between 5-10% of that total. I already worked a straight affiliate deal for the same niche at 10% which seems like a good baseline so I would think selling leads using a little less than 10% would be realistic.

dsoul said:
If either closes a sale, I get $800 commission. I don't get paid per lead as such, it's more like an affiliate deal but it's not tracked or anything. But the companies know they don't get anymore leads if they don't keep me happy. Everyone wins.
Click to expand...

From my calculations above I think I should still be getting a similar value selling leads using an estimated value based on averages. Am I missing something thinking this is an OK comparison to using a commission system like you mention?

Going the commission route would work, but setting up the tracking for all this will be more red tape for getting this deal set up. That has been the only thing stopping me this far and I NEED to get past this hurdle. Thanks for the responses.
 
Yeah I guess so, if you know that (as example) 1 in X amount of leads (in general) converts.. then you're not selling yourself short by taking X per lead, if it adds up.

In my case, I guess could sell the leads for around $50 to $70 ish.. and make roughly the same as waiting for a sale.
 
I don't know the percentage of leads that convert yet, but I'll work with my first client to get that info.

From there I can use it for future clients to make more educated decisions.
 
If it were me, I would use 1 of the following 2 methods to determine fair market value for a lead.

1. As someone stated above, simply see what other companies are charging for this type of lead (keeping in mind exclusive vs non-exclusive leads). Searching "buy mortgage leads" should fetch back plenty of companies that you can use to help gauge market value.

2. Contact someone in the market that is already spending money on PPC ads for their marketing. If they know what they're doing, they should already understand their metrics. If you can find out how much it costs them to generate a lead through PPC, it shouldn't be a tough sell to offer them leads at 50-75% of that cost.
 
@ddasilva thank you for the feedback.

I just set up the first lead capture form and no less than an hour later - BING a fresh one hits the inbox... Hope to build a nice little free lead package over the next day or two as I prep my proposal documents.

I have a good in person relationship with the first deal I will approach so I should have some flexibility and a chance to learn before I take on other deals.
 
Just walked out of the meeting, signed contract in hand!

Learned a lot from this first one, can't wait to get more of these contracts signed.
 
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