An impromptu Twitter discussion from May still has me thinking.
@ppcbz: Has everyone given up on local seo yet? What’s the next big guru circle jerk gonna be about?
@smaxor:
@ppcbz local leadgen is a nightmare. Saw that coming a mile away. I’ve got “Barman’s Magic Inside Secrets” coming soon. Hope you don’t mind.
I reply
@smaxor @ppcbz IANAG (I am not a guru)- but I will say local SEO/ lead gen is a stable, consistent income stream. It’s just not scalable.
@adhustler replies to me
@phillian its scaleable but you need to form an entire company…look at reachlocal… I believe they are going public.
@smaxor replies to
@adhustler going public isn’t always what its cracked up to either. Have 2 partners that said its the worst thing they ever did. ;)
I reply to both of them
@smaxor @adhustler re local- even though it’s reliable (and thus hard to move away from) it’s still trading hours for dollars. Even if its not me doing the work, but an Odesker or an employee, overhead still walks around on 2 legs.
@smaxor responds
@phillian I’ll make a leadgen to create local clients for you. And everyone one else that wants to do it. Aggregate and post data then scale. I’ll sell you the lead then you can do all the work and deal with clients :P
Then he starts getting into the good stuff.
When it comes to local lead gen I think a way better way to go is niche specialty over many areas. Chiropractors for example. Then start local and keep adding more and more cities. Become a leadgen aggregator for the chiropractic niche.
That’s a very scalable business.
Look at something at 1-800-dentist. Working in 20 different niches in a local area really seems to be like starting from scratch each time with a whole new business to learn how to market and deliver a message people have to act on. Much easier to develop a message then grow to man markets.
It’s a whole new business to learn how to market and deliver a message people have to act on. Much easier to develop a message then grow to man markets.
The other nice part is to get 20 chiropractors in a zip and then have them bid up the lead price so you keep your cost the same and increase your return.
B2C is what I’d stick to if you’re making a margin as there will be more volume then B2B.
Pest control would probably be a good one to start. Realtors, mechanics… Who’s got other ideas? Gardeners?
Any real life continuity service would probably be good, house keepers. Or high cost service, remodels.
The mold, flood cleanup guys is a great niche. Talk about a scam it’s like 10k to have them dry your carpets. But its paid by insurance companies.
To which I add
Mold / asbestos remediation is becoming a hot-button certification issue in some states. Here in PA it’s still wide open though. but – you could upsell asbestos remediation lead gen on mesothelioma attorneys.
And @smaxor replies
All the better reason to be an aggregator :) sell the leads 3 times let the cleanup guys bid, then do the same to atty’s.
When people compete you win right? :P
I still believe there are tremendous barriers to entry to take a local lead generation business from comfortable (which I define by replicating the income I would have had if I were still working a job as an IP paralegal, somewhere between 85-95k with overtime) to seriously scalable profit (2-3x “comfortable” and growing).
What Jason Akatiff (Ads4Dough and @smaxor from above) was talking about, however, is the conglomeratization of effort by creating systems. Letting the work work for you rather than replicating that work in new industries or niches. I revisited this discussion recently because that is the direction I’ve decided to head with my local lead generation business.
I’ve worked and had clients in about a dozen different industries, mostly B2C in the blue collar trades. There are some big scaling problems with clients like this:
- More education. This client base is going to need a lot of bringing-up-to-speed to understand what you are talking about when you pitch them. That means you are frontloading a lot of effort in the pitch that may not result in profit.
- Rapid lead cap. You can only scale your business at the rate with which they can scale theirs. If you have a major Philadelphia plumber, no matter how many broken toilets you can find in the city for him to fix, his resources (trucks, employees) will only allow him to get to so many, at which point you have to turn off the valves on your traffic. And your profit.
- Squeaky wheels. Because your profit is limited per client, you have to engage with a much larger volume of clients to increase profit margins… and with an increase in volume comes the inevitable increase in squeaky wheel clients; the kind who will call you in the middle of the night to ask why your day-parted ads aren’t running.
So I am reorganizing this business to be more streamlined and effective going forward.
- Niche selection. I’m choosing industries that I already have a working knowledge of and sticking to no more than 3 at a time while I build out…
- Systems. Creating and testing best practices for lead generation within those niches that can be moved to a variety of locations. This minimizes the opportunity cost and effort I have to put out to be profitable. From there, I want to investigate…
- Data Sales. Specifically finding a way to multiply the monetization of every collected lead either through aggregate data sales or upsells (with highly-targeted, applicable affiliate marketing programs). There are some ethical questions involved here so I’m not yet 100% sold on this idea. (For more information, check out More Money, Same Traffic: List Building and Paths)
What do you think?
Is Local Lead Gen a scalable business, yes or no? Any recommendations for increasing profit per lead?
