The pay-per-lead idea was fair? Why did you not go ahead with that?
If you were planning on charging them $300 per month with an estimated 20 callers, that's $15 per lead. You can have said "sure" and let them pay for leads (which you can track by email or phone) and do it that way. There would be no problem in this case, as you still make the money you originally anticipated.
The only real problem in such a case is that you don't want to do it a pay-per-lead way because you know/think you won't get them any visitors. If this is the case, you are not yet ready to lease it out to anyone, because no one but yourself would be making profit.
I am not saying this is the case, it is just something I want to put out there. We need to help the business owners with measurable business, not just provide them with a site that 'seems' it might generate results. Don't worry, I am learning all of this myself now too - I have several sites ranked at the top of Google, and they get visitors but not many callers.
Having a site at the top of Google itself will net you sh*t all. Unless the site looks good. Unless it is easy to navigate. Unless it has good content. Unless it has an effective, clear & simply CALL TO ACTION - you won't be getting much from it.
That's why now I am working on the conversion rates for my site.
To further you offer, you could introduce Google Places and YouTubes videos all ranked on the first page, along with the website. In this case, you have 3 methods to attract visitors. More visitors with a decent site = more callers. Once you have a decent amount of callers, at least 5/month, you can them offer it to them for a free month to see how it works for them.
Of course, with 5 callers you'd need to SHOW them that they got the callers from you, from your call tracking. If on the other hand you're handing them 20+ callers, I'd say they could probably tell the difference themselves without needing to be shown statistics.
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