Local Leads Gen or SEO/PPC Services?

Hey everyone,

Im trying to nail down my business model/process, as I feel this will help me when pitching my services, make pricing easier and make my business more scalable.

The issue that I am having is that I am struggling to decide if I should go down the route of offering leads to local businesses or offer straight SEO, PPC or Social media services.

I have tried the leads based approach in the past and I am currently working for an SEO agency, so I have a little experience of both.

Local Lead Gen - This approach generated the most money for the two clients I had, and I liked the whole setup of being able to own and control my own sites, ads performance etc. The only problems with this approach 1: Was very hard to track conversions of the leads 2: Any negative feedback came up on my google places listings and on other review sites. Plus managing the payments of money owed for leads was a hassle.

SEO service - The good thing with SEO is that when you have good clients (which is rare) you can just do a little work each month and get paid a nice chunk without having to do anything drastically different (compared to the beginning of the campaign). The issues here are that the money is lower, clients expectations are high but they don?t want to spend more. The beauty on marketing online (imo) is that you can tweak the shit out of stuff to get it to convert and figure out ways to get more traffic. But when doing this for SEO clients you will have to charge them for the time spent, which is not something they want to do. Plus once a client has decent rankings, nothing stops them from thinking they will pause the work or stop using the service as they will most likely keep the rankings for a while (in non competitive niches and towns)

So I hope anyone who has had experience of local lead generation or even both to chime in and share any experience they have and give me some opinions and guidance on the best route to take.

Cheers for reading this.

A few quick things that come to mind. I have no idea what your niche(s) are, but let's say its pest control. I'm so tired of dog and dental niches.


1) How exactly is it hard to track conversions of leads? Are you talking about the client making a sales from the lead, POST issue or something else?



2) There will always be a mixture of good and positive reviews, so I wouldn't let that get you down. If a vendor doesn't have a negative review I get VERY paranoid.



3) Did you charge on a per lead basis, ask for an initial deposit to use to deduct the lead received or bill monthly? Easiest way around this is to setup account with X amount of initial money and automatically bill when the account reaches a specific threshold. Of course, the client should know this in advance as it will be spelled out in the contract.

4) Since I only buy and/or generate my own leads I cannot say with 100% certainty what would work because there are so many factors involved from a sales perspective. However, one thing to keep in mind is that people like to have a few options and ALL business people think about is, "how much money will this make me." Listed below is a quick approach I just thought about.
Here's an example using fictitious numbers.


Paul's Pest Control
a. Average Sale is $500 (1x per year)
b. Gross Profit Margin is 60%
c. Customer Lifetime Value is $2500
Onto the fun stuff..........


Scenario 1
I buy 1000 leads from your company a month for $5 each. The average sale is worth $500 and the Customer Lifetime Value is $2500 (5 year client). I need to make sure that AT LEAST 10 sales (1% conversion) are made to break even. But I'm shooting for a 5% conversion. For argument sake, let's say I close 25 sales each month using your leads. These new clients of mine no longer have bug problems until I bill them again next year when it's time for Bob and Jose to come out and fumigate.
6 month Gross Revenue = $75K and my COA is the same (a rarity these days, but a good example for brevity). Using the standard ROI formula of revenue/cost * 100 my ROI is 250%. Overall, I'm happy until I find somebody else who can offer me leads for cheaper.



Scenario 2
I purchase your SEO services for half the cost and I have to write you a check for $2500 each month. Each month the number of leads I get continually increases as your work progresses, however, it's nowhere near the 1000 leads a month " I COULD HAVE GOTTEN" because my rankings are increasing. But, I feel awesome because I can tell people to go Google me and my wife lets me sleep in the bed again.



Let's say it takes 12 months to achieve 1,000 leads a month and I'm open to giving you a 6 month commitment because you have really nice hair. Month 1 I generate 200 leads and it increases 20% every month for 6 months. In total, I have gotten about 1,987 leads and it has cost me $15,000, however, I have made $25,000. My COA is $300 and my ROI is 167%. On a personal note, the numbers suck, but it's a good example to think about.



You should know what the approximate numbers of A,B and C for EVERY business you pitch because that allows you to set yourself up as an expert.
Why not just offer both services as package deals and let the client pick one. Package 1 could be X amount of leads over X time for X price to test things out. You should already know the average sale and lifetime value of those leads, so you could set the price accordingly or do a bidding system (one of my favorites). Package two could be X SEO services on a monthly basis for X amount of money and X expected outcome (leads, emails, etc.). Package 3 could be both (if you are ok with given your top positions away to work on a clients site.



I hope this helps.

For the Lead Gen.
Setup a seperate number that has call tracking. Then foward your number to the client's number. You can then track the number of calls you generated and listen to the calls. If your leads are weak then you can work on it. If your client can't close them then that is their issue.

But I agree with Merlin22, why not offer both options?

You mentioned SEO servics - you seemed to mention them in the context of traditional SEO.

You might want to look at Google Places SEO. I have found that it is an easier sale. And, it is a decent chunk of change ($400-$500 each month) a month.

Just my 2 cents.

Red

How do you guys find the clients? Do you guys call them up?