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Lead Generation

Empires

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So I may be getting ahead of myself but I was running the numbers for a lead gen site, and am questioning the best solution for this problem.

To get traffic to the site I am using adwords and fb ads, if I convert 10% of visitors into leads it'll cost about 6 dollars to acquire one lead. My question is, when selling leads what is the best way you charge the businesses you sell the leads to?

Method 1: Charge them weekly/ monthly for the leads given in that period of time?

Method 2: Charge them daily for the leads given that day

With method 1 the problem I would run into is not getting the return on my cost per lead fast enough to put the money back into the business and would quickly run out of capital. But with method 2 is that hassle for the business to constantly have to be paying and possibly turn them off from purchasing leads?

Thanks!
 
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BigBrianC

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I would never register for daily payment. And as a business you don't want that. The longer you have $ secured, the better. If you can't last from one payment period to another you won't last.
 

Empires

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I would never register for daily payment. And as a business you don't want that. The longer you have $ secured, the better. If you can't last from one payment period to another you won't last.

I agree, I dont like the idea of daily payment. The question becomes then whats the optimal way to last between payments with limited capital?

Limiting daily spending on acquiring leads? Getting more capital isn't realistic until I have a proven track record.
 

BigBrianC

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If you get paid on Monday and can't make it to next Monday, you're doing something wrong.

Yes you may have to put your own money into it to start. Or if that's too hard, don't.
 
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Tom.V

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Totally depends on your setup. If you have tools which can automate the process of billing at recurring times, daily can work fine so long as you QA process is top notch (aka you aren't providing shit). It also depends on what kind of lead gen model you are planning to run.

Daily recurring payments at the end of the day work fine to limit capital restraints and ensure that YOU get paid for all services delivered. If you're running a large scale operation and do this manually, it could become nightmarish. If you've got it automated with all of the appropriate checks and balances, it's definitely the lowest risk option.

Weekly or monthly works fine as well, but dependent really upon what market you are selling leads to, could be enough time for businesses to belly up and disappear with free leads. This just adds more risk on your end IMO.

Personally, I like to have more than one payment method on file and incentivize to achieve that.

Edit: Also keep in mind, you could have customers setup for daily billing to start and once they are more established, aka you've had time to further build the relationship and can trust them, you can start establishing lines of credit for them, different payment terms, etc.
 

Empires

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Totally depends on your setup. If you have tools which can automate the process of billing at recurring times, daily can work fine so long as you QA process is top notch (aka you aren't providing shit). It also depends on what kind of lead gen model you are planning to run.

Daily recurring payments at the end of the day work fine to limit capital restraints and ensure that YOU get paid for all services delivered. If you're running a large scale operation and do this manually, it could become nightmarish. If you've got it automated with all of the appropriate checks and balances, it's definitely the lowest risk option.

Weekly or monthly works fine as well, but dependent really upon what market you are selling leads to, could be enough time for businesses to belly up and disappear with free leads. This just adds more risk on your end IMO.

Personally, I like to have more than one payment method on file and incentivize to achieve that.

Edit: Also keep in mind, you could have customers setup for daily billing to start and once they are more established, aka you've had time to further build the relationship and can trust them, you can start establishing lines of credit for them, different payment terms, etc.

Good points, theres a lot to consider. I suppose testing methods is the best option to just find out what works best and seeing how the businesses respond.
 

Andy Black

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Method 3: Get them to prepay?
 
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Empires

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Method 3: Get them to prepay?

Thats not a bad idea, that would be great during start up. The only obstacle I see is convincing them to prepay before they have a trust built with me. Unless I give an incentive for prepaying.
 

mrarcher

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save 10 - 20% on amounts of time prepaid. The more time paid for the bigger discount.
 

Andy Black

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The only obstacle I see is convincing them to prepay before they have a trust built with me.
Give them free ones first?


I've by no means cracked this myself, but you can see some of what I've learned in the third link in my signature.
 
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Empires

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Give them free ones first?

That was already my plan to get the initial interest from them, and I think thats a good plan to get their business, Im just questioning if thats enough to get them to pre-pay for it and not turn them off.

The larger competitors in this niche charge per click for posts to their site (.5-1.50 per click) with hundreds of thousands of visitors that can get expensive when anybody can click your link, they also have a free option with less promising results. So Im trying to bring a different revenue model and improve the lead quality.

Reading into your thread now
 

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I think the testing methods is a best option to just find out what works best and see how the businesses respond. As using this method, if you got the good traffic and leads for your business then you can proceed for further.
 
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