With more and more business models popping up online, it’s not always easy to pick which one is best for you.
However, one of them that’s been rapidly growing in popularity over the last few years is Pay Per Lead.
(Yep, you guessed it…Profits)
Everybody needs leads, and if you can provide them, prepare to make a lot of money.
In this post, we’ll discuss the whole topic of pay per lead marketing and give you some tips so you can make the most out of every lead.
What Does Pay Per Lead (PPL) Mean?
Pay per lead is a model where a client pays a fixed price for a lead.
Unlike lead generation agencies, you don’t pay a retainer, or percentage of your ad spend, or something else.
You are only paying for the data that comes through – a lead.
What is a lead?
Lead is a set of data or information about a person indicating a purchasing intent. It is different for every business, and there is no universal definition.
For instance, a dentist might consider a lead to be:
- Verified Phone Number
- Email Address
- When was your last dentist appointment
- What dental work you’re looking to get
But that will be different for real estate agents that mostly care about:
- Verified Phone Number
- Email Address
- Kind of house they’re looking for
The more relevant information about a lead, the more valuable it is. You can see the individual leads in the table below.
As you can see from the diagram above, the first lead is pretty basic, while the last is high-quality and ready for sale.
And that’s why not all leads are created equal. (Or the price)
What Is Pay Per Lead Marketing?
Pay per lead marketing is a form of marketing where a marketer generates leads for a business and gets paid a fixed price for each lead.
There are a lot of ways or channels you can generate leads, such as:
- Social media marketing
- Search engine marketing
- Affiliate marketing
(We’ll look at them all in more detail in a moment)
Or you can also buy leads directly, which is similar to purchasing an email list.
You pay a fixed price and get a certain amount of leads which you can qualify further and segment into tiers according to how much data you have on them.
Which form you choose mostly depends on your skills, know-how, and internal structure.
For instance, if you are a dentist, you most likely have no clue how to use any marketing channels above to generate leads and just prefer to buy them directly.
But that’s far from someone who is an expert in PPC ads or SEO.
Here’s an overview of paid marketing methodologies, including increasing levels of pay per lead arrangements.
|Paid Marketing Methodology||Explanation||Technical Setup||Potential Cost||Risk Level for Business|
|Pay per Impression||A business pays for each impression made by an add. Impressions are defined as the number of times an ad is shown to a user.||Ad Platform Integration, Landing Pages||Low||High|
|Pay per Click||A business pays for each click made on an ad. Clicks are defined as the number of times a user clicks on an ad.||Ad Platform Integration, Landing Pages||Low to Medium||Medium|
|Pay per Lead||A business pays for each lead generated by a campaign. Leads are defined as potential customers who have expressed interest in a business’s products or services.||Ad Platform Integration, Landing Pages, CRM Integration||Low to Medium||Low|
|Pay per Call||A business pays for each call made to a tracking phone number generated by a campaign. Calls are defined as interactions between a potential customer and a business over the phone.||Ad Platform Integration, Landing Pages, CRM Integration, Call Tracking||Low to Medium||Low|
|Pay per Appointment||A business pays for each appointment scheduled with a potential customer generated by a campaign. Appointments are defined as face-to-face meetings between a potential customer and a business.||Ad Platform Integration, Landing Pages, Scheduling Software, CRM Integration||Low to Medium||Low|
|Pay per Customer||A business pays for each customer acquired generated by a campaign. Customers are defined as individuals who have purchased a business’s products or services.||Ad Platform Integration, Landing Pages, CRM Integration||Low to Medium||Low|
|Pay per Sale (Commission)||A business pays a commission for each sale made generated by a campaign. Sales are defined as completed transactions between a customer and a business.||Ad Platform Integration, Landing Pages, Payment Processing, CRM Integration||Low||Low|
|Backend Revenue Share for a Period||A business pays a percentage of its revenue generated by a customer acquired through a campaign over a specified period.||Ad Platform Integration, Landing Pages, CRM Integration||Low to Medium||Low|
|Backend Revenue Share in Perpetuity||A business pays a percentage of its revenue generated by a customer acquired through a campaign for the lifetime of the customer.||Ad Platform Integration, Landing Pages, CRM Integration||Low to Medium||Low|
PPL vs. PPC vs. CPA
Pay per lead is not the only model you can opt-in for.
There are also pay-per-click, and cost-per-action models, which may look similar at first but are totally different.
PPC stands for pay per click.
Essentially, you run an ad campaign and pay each time someone clicks on your ad. The ads are usually sitting on top of Google.
This is called search engine marketing – you buy the first few paid rankings on Google.
Unlike PPL, there is no guarantee that you will get the information or lead. A searcher may click on your ad and leave.
Cost per action is a model where you pay a fixed rate based on a pre-specified action (such as a registration or purchase.)
This action happens inside an app or software.
Unlike PPL, there is no certainty you will get the information (your lead.)
Pay Per Lead Channels
Now, we mentioned them briefly above but let’s deep dive into ways to generate leads you can sell to businesses.
Here are some of the best pay per lead channels:
Pay Per Lead Advertising
Pay per lead advertising refers to an approach where you generate leads with ads.
For instance, you can run PPC ads on Google, social media ads, in-app ads, or any kind of ad campaign.
After a potential lead clicks on your ad, you just need to retrieve the necessary information.
You run an ad campaign for people looking for a repayment program.
You create a compelling ad on Google, and a potential lead clicks on the ad to learn more.
There, they will fill in the necessary information to determine the repayment program best suits their needs.
And you get the information you need.
This can also be done by having a lead magnet where you can download a cheat sheet, PDF, checklist, and so much more.
Pay Per Lead SEO
Search engine optimization for generating leads may be tricky.
You’ll need to create an SEO strategy, produce blog posts, and get to the top of the #1 search engine results page.
A potential lead clicks on your SERP result, fill in the info and gets a lead magnet.
You rank your website on the top spot of Google results page. A potential lead will click on your page to find out the answer to their questions.
You create a compelling blog; however, an additional resource for the next step will be offered in a lead magnet.
The lead will fill in the info and download the lead magnet.
Pay Per Lead Models
There are different levels of PPL marketing. Each one differs in technical setup, potential cost, and riskiness to the business that provides the service for each of the pay per lead services.
Pay Per Lead Affiliate Program
You are sending traffic to a business that will pay commissions for every qualified lead referred.
You run multiple ads on Google and social media.
In each of these ads, you use the same (your unique) link associated with your account.
And each time a lead clicks on it and performs an action, you will get a commission.
Pay Per Call Lead Generation
Pay per call lead generation works by converting visitors and convincing them to hop on a call with you.
Usually, businesses that provide high levels of customer service use this marketing model. Potential leads have questions, and instead of filling in a questionnaire, they make a phone call with your company and find out exactly what they need.
You run an ad campaign in the home improvement niche. It catches the eye of a potential lead, but they are not sure what they want.
Will the wooden cupboard look better, or should they opt for plywood?
They don’t know, so they’ll call you.
And you generate a lead.
Pay Per Appointment Lead Generation
This model is about getting paid to convert visitors to schedule an appointment, also known as inbound sales or b2b appointment setting.
In essence, you sell appointments for a business.
You might run a pay per appointment campaign for leads that want to sell their house.
You first get leads to your site, make them fill out a quiz, and then suggest they schedule an appointment with an expert.
These leads are, of course, a lot more valuable than “name, email, phone” leads.
The Benefits of Pay Per Lead Marketing
Pay per lead marketing has many great benefits. It can help your business grow, generate more leads, and help you move forward and thrive faster.
Here are some of the biggest benefits of using the pay per lead marketing model.
The most tempting benefit of using pay per lead marketing is fixed costs.
Unlike with other forms of marketing or lead generation agencies, businesses don’t pay any money beforehand.
That means clients have more predictability of ROI in your service and are more likely to give you more money to generate more leads.
There Is No Ceiling
Let’s say you get paid $100 per lead.
That means if you generate 10 leads, you get $1000. If you generate 50 leads, you get $5000, and so on.
In theory, if you choose the right niche, there is no ceiling to how much money you can make.
(since there are millions of people with the same problem.)
But, in reality, there might be a ceiling – the client’s budget. Yes, clients make probably 2 – 5X more money than you from the leads you generate.
However, they have a certain amount of money they want to spend on you.
And there is no way you get past that.
One of the benefits of using pay per lead model is cost-effectiveness.
You don’t need to invest in a marketing strategy or run an ad campaign to attract potential leads to your business.
(Which, after all, might not even work, and you might waste a lot of resources.)
You just pay a company to generate leads for your business.
The price is fixed.
So as long as the company is delivering a decent quality of leads, and you’re making more than you are paying them in the first place, you should be in profit.
The Cons of Pay Per Lead Marketing
Every coin has two sides, and it’s no different from the PPL model.
Let’s now look at some of the considerations you should think about before jumping the gun and choosing a pay-per-lead model.
The Quality of Leads
The quality of leads is critical for making conversions.
Of course, the more relevant information you have about a lead, the better for your business. But the way a pay per lead company generates a lead matters too.
Some pay per lead companies may use malicious practices to obtain leads, such as:
- Delivering bots
- Incentivized traffic
- Recycled or stolen information
And you have zero visibility over it, so you are kept in the dark.
And so is your conversion rate.
The Cost Scales to the Number of Leads
The price is fixed, so you pay X amount of money and get Y amount of leads.
This model is great; however, it also means that the cost is always proportional to the number of leads you buy.
Meaning you can’t generate more leads with the same ad spend.
Also, it might be more affordable to generate leads yourself on your website and cut out the middle man completely.
You can create a quiz and include it in your marketing funnel to get the first-party information.
You can later segment this information and show more relevant content to your leads.
Which will greatly enhance your chances of conversions.
It’s Not for Every Niche
Generally speaking, pay per lead model is for profitable, big niches.
If you are in a small market, you might be unable to afford to pay $50 or $100 for a lead. Or you might not have enough resources to handle the volume of leads.
Either way, if you are in a small niche, the pay per lead model is probably not for you.
Choosing the Right Pay Per Lead Program
In this section, you’ll learn how to choose the right pay per lead program for your business.
Remember, no program is the best; some are just more suitable than others.
First, let’s see what type of lead is best for you.
The Lead’s Stage
There are three main types of leads you can get.
Remember that the more information about a lead, the more valuable it is – and less nurturing is required by the business buying it.
Which type you choose depends on your budget and internal capabilities.
(nurturing skills, marketing skills, etc.)
Contact is just contact information such as first name, last name, and email or phone number. This type of lead is typically generated from lead magnets.
For instance, you offer a free resource like an e-book or cheat sheet for contact info.
It’s the least valuable of the three types.
Marketing qualified leads provide you with a bit more information.
This lead is a potential customer reviewed by the marketing team and satisfies the criteria necessary to be passed along to the sales team.
On top of contact info, they also have info like gender, age, interests, etc.
A sales-qualified lead is a prospective customer that has been researched and vetted — first by an organization’s marketing department and then by its sales team.
These leads are ready to be sold to and contain a bit more information than MQL.
For instance, this lead might have shown interest in buying a new couch, the couch’s material was leather, the budget is XY, and more.
Best Pay Per Lead Niches
The best niches for pay per lead model are big profitable markets.
When looking for niches and clients, you should look for businesses with an average sale price of a product of $2k+.
These are niches such as:
- Life insurance
- Debt relief
- Online Education
- Real estate
These niches are huge and have facilities and staff to take a lot of leads at the same time.
They are also in a hyper-competitive market, so lead generation is necessary. You can also expect to get paid more than in smaller niches.
How much should I expect to get paid per lead?
There is no universal sum of money for a lead.
The price can vary from $30 – $40 all the way up to $1000 per lead. This mostly depends on the factors such as:
- Lead quality
- Niche profitability
- The difficulty of obtaining lead
In some niches, it’s easier to generate leads than in others which plays a factor too.
That’s also true about location…
Leads in New York City are more expensive than leads in Nebraska (it’s about competitiveness.)
Lead flipping will usually give you lower margins than generating them yourself.
How Pay Per Lead Works in the Real World – CASE STUDY
It’s better to show than tell.
That’s why we are bringing the AMI Global pay-per-lead case study up to show you just how powerful this marketing model can be.
The company had excellent facilities and staff in place.
But they were facing two very common struggles of similar businesses:
- Dried out sales pipeline. The client required a steady flow of leads in their pipeline because their sales department has had limited ways to acquire new clients, especially big accounts.
- Account-based sales. Targeting the tight niche of pump manufacturers and distributors, the client has a super long sales cycle and has found it challenging to acquire new targeted accounts.
They hired a pay per lead company to fix both of these struggles. And here is what they did:
- Nailing outreach content. They used the email channel to nurture leads and convert them into customer-ready conversations. Prospects responded positively, and the team gained traction with active conversations and engagement.
- Targeting big accounts. With enterprise-sized prospects, they cut through the layers and got to the core decision-makers. We are talking about large companies here, with over 10k employees.
- Adjusting approaches. They tweaked the initial strategy, played with subject lines and email copy to deliver more than clients’ expectations.
This pay-per-lead model brought extreme results you can see below.
After that, the company got all it needed to start working with these leads and close them into long-term customers.
How to Start a Pay Per Lead Business
In this section, we will take a look at the whole process of starting a pay per lead business from start to finish.
#0: Possess Necessary Skills
It might seem pretty easy – you generate a bunch of leads and get paid. But in reality, it’s much more difficult.
There is a set of skills you need to have in your arsenal to be successful, such as:
- Marketing skills
- Analytical skills
- Communication skills
- Copy & Sales skills
- Buyer Psychology
And so much more.
If you are unfamiliar with topics like split testing, Facebook & Google tracking, and optimizing sales funnels, this might not be the right path.
#1: Choose Your Niche
The first thing before getting into pay per lead marketing is choosing a niche.
You can’t try to satisfy everyone, and not every niche is profitable. You’ve learned about how to choose a previous and what niches are most profitable.
But there is one more thing to consider…
You should ideally opt in for niches where you have at least a bit of experience.
That way, you have a basic understanding of the niche and know about its dynamics, how it works, and what are the places to generate leads from.
(you can also be more personalized since you know the jargon.)
#2: Land a Client
This step is pretty straightforward.
Most companies are struggling with finding leads, so offering a pay per lead service from you comes in very handy.
Look for the companies in your niche on LinkedIn.
After you find a few, use email/phone communication to get to the decision-makers and propose your deal.
If you have all of the skills listed in the first step, that should be no problem for you.
After all, it’s what you do best – generating leads/clients.
#3: Know the Target Audience
Having a basic understanding of a niche is great.
But you also need to know the target audience of the businesses you are selling leads to. Ideally, you would create a target persona profile with tools like HubSpot.
That way, you will generate leads that are high-quality with a big chance of conversion.
#4: Create a Funnel
Whether you are using social media ads, search engine marketing, or any other channel, having a funnel in place is a must.
Ideally, you’d create a multi-level funnel consisting of different stages, such as:
It does not have to be complex.
But it should definitely be optimized and split-tested for maximum conversions.
#5: Capture the Information
Having a funnel in place will set you up for success.
But you still need to capture the information and provide an experience your leads won’t forget. And that’s where LeadsHook comes in.
We use quizzes as a mechanism to engage leads in conversations in a personalized way. This gives you 1st party and zero-party data that you can use in a number of ways.
For instance, you can use this info to create ultra-personalized reports, charts, calculators, leads, sales pages, and product recommendations within LeadsHook itself.
That means you get more insights, sales-ready leads, and super-high prices for leads.
Measure & Optimize
No strategy is perfect, and there is always room for improvement.
It’s critical that you monitor where quality leads come from – what are the sources and channels?
Take a closer look at each stage of the whole lead generation.
From the early beginning, where you attract a lead to the final conversion. Find out where you can improve and make the necessary adjustments.
Pay Per Lead Generation Software
There are a lot of ways to generate leads.
But most of them are old-fashioned and boring. People want a great and seamless experience rather than a boring lead magnet.
And that’s precisely what LeadsHook can provide you with.
It features interactive content, real-time experience, and so much more.
LeadsHook allows you to capture first-party data from your leads, segment them into lists, and give them the super-personalized experience they truly desire.
It’s also fully customizable.
All of this combined allows you to generate top-quality leads with a lot of valuable data.
Management Software for Leads Distribution
Having management software for lead distribution is a must for both parties – lead sellers and lead buyers.
For lead sellers, it allows for a smooth transfer of leads to the business.
Some tools even allow you to insert leads directly into the customer-relationship management software for immediate use.
It’s also a great place to store leads and all of their information.
For lead buyers, it allows checking lead validity and duplicacy.
You can immediately find out whether leads are not fake, duplicate, and prevent fraud. You can also track leads revenue and tons of other metrics in real-time.
Some of the best lead management tools include:
Pay per lead model is no picnic.
If you have all the skills necessary to start this model, it might be a very lucrative career, and you can help tons of businesses.
But, of course, the revenue is always proportional to the number of leads you generate. So there is no exponential growth.
If you are a business owner looking to hire a pay per lead business, It might be a great idea to gain valuable customers. But you might also risk getting low-quality leads and losing a lot of resources.
There is a lot better way to go about it, with minimal risk, but a little more work required. You can generate leads yourself and cut the middleman.
You can easily achieve that with LeadsHook, in our opinion, the most advanced and valuable tool for lead generation.
The best thing about it is that you can choose from plenty of pre-made lead capture forms, so you can hit the ground running with minimal setup. No need to create anything new or start from scratch. You can do all of that without lifting a finger…
You can then segment these leads, nurture them, and get the conversion.
Sign up for a 14-day free trial and give it a shot right now.