Ask any entrepreneur and no one will claim that there is an easy business model. Each idea needs grit and hard work for the business to become profitable. However, many entrepreneurs are drawn to lead generation because this type of business does not require a company to develop a product to make high and consistent income every month.
This article will delve deeper into the lead generation business model, what makes it profitable, and how to start building a scalable lead generation venture.
The lead generation business model
Lead generation is sometimes compared with affiliate marketing. While both rely on earning commissions, the difference is that the leads garnered by lead generation companies does not require a purchase to occur for them to earn. Instead, they earn income with every lead they direct to the client company which contributes greatly to the business’ expansion, long-term profitability and growth.
Many companies opt for this model as it can lead to a steady cash flow because many types of businesses, big or small, are constantly looking for leads to convert to customers. In addition, starting a lead generation business provides low startup costs and can sometimes even be run by a solopreneur.
Starting a lead generation business
A Forbes article written by business consultant Philip Smith lists the different ways to build a scalable lead generation business.
Choose a particular industry to serve
…and learn everything that needs to be learned and understood about the common business models for the chosen field. It is tempting to cater to all types of businesses at once but niching down can help a company to stand out more as an expert.
It is better to choose a field that is currently high in demand. Auto finance is one example as millions of people are looking to take out car loans every year, but some of them may not qualify to get one from traditional platforms.
As a lead generation business, it is your job to make sure these people looking for ways to buy a car will be directed to the right auto financing company—which would be your client.
Set a marketing strategy in place
At its core, lead generation is a part of marketing. This data from Hubspot reveals that companies are able to garner leads from both traditional and digital marketing-related mediums and practices.
As a company that primarily earns from every lead garnered, it is important that you’re attracting quality prospects to your client’s door. A digital marketing strategy does not end with offering the product to the customer.
Starting with a buyer persona can help identify the needs and buying path of the company’s target leads. Figuring this out will help determine which channels they frequent the most and you can start setting a funnel, whether it be through social media, SEO, Google Ads, etc., from there.
Set up an automated and user-friendly process from the get-go
Unlike traditional marketing where a salesman is sometimes needed for a prospect to complete a purchase, the automated process is considered the heart of a lead generation company.
Companies with sound lead generation practices are able to achieve 133% more revenue which can be set up with a form that the lead can fill out. Keep the user interface in mind when creating the landing page and form to ensure the ease for the consumer to fill in the form, producing more leads signing up.
This also opens opportunities to monetize your leads as you can upsell them to another company whose offers are in line with their main interest. As an example, a lead may be looking to invest in a contractor for their company. An additional step in the funnel could be asking if they need an interior designer to help them complete their property project to potentially sell the same lead to an interior design firm.
Since all types of business need customer and clients to earn, there will be no shortage of both prospects and leads in any industry. This makes the lead generation business one of the most scalable models an entrepreneur can consider—provided they are constantly updated on new marketing trends and best practices.