Lead generation is one of the most popular ways to monetize your website or to make money online in general. In terms of popularity, it is right after display ads and affiliate programs. In some industries, it can work extremely well. The most popular lead gen niches are insurance, mortgage, and home improvement. You can usually sell such leads for around $20 to $60. But this is a very rough estimate. The real price and your revenue will depend on many factors. Who are you selling your leads to? Is it the end buyer or a lead aggregation company? Is your lead exclusive or shared? How do you generate those leads? How many of your leads go unserved?
I am going to answer these questions (and more) in this article.
At the end of the post, I will give you three sample revenue estimations for lead generation business based on industry, traffic, and other factors.
Average price per lead by industry
- Insurance: $20 - $50
- Mortgage: $25 - $50
- Home Improvement: $20 - $60
One thing to note when talking about lead prices. Lead price is not the same as lead cost. Although these terms are very often used interchangeably, in this context they have a different meaning. The lead cost (CPL – Cost Per Lead) is usually used in the context of PPC (Pay Per Click) ads which basically means that it is an average cost of total ad clicks advertiser has to pay to get one lead. In most cases, this cost is much higher than average lead prices for which you will be selling your leads.
Does it mean that you cannot use PPC ads like Facebook or Google for your lead gen business? Well… not exactly. But more on that later.
Lead generation revenue factor: Industry
Besides the abovementioned industries there are plenty of others in which lead gen marketers can perform very well. You can generate leads for almost any industry. Yet not in all industries lead generation is the best way to make money. Every case is unique so you always have to use your own judgment, but here are a few things to consider before going all-in.
1. Is the demand is mostly local?
If you want to work with a local dentist or a car repair shop then lead generation is probably the only choice. But be careful, local businesses are hard to scale. A dentist can take only as many patients as he has hours in a day. Also, when growing traffic for your website you may end up being limited to local SEO only. This is both good and bad. There is usually much less competition for local keywords but in the same time, you are missing a lot of traffic from more generic, location-independent keywords. These long tale, informative keywords can also be quite easy to rank for and can bring you TONS of traffic. You still can use them to create leads for local businesses but you need to find a broker – lead aggregation company. This way you will be able to sell leads from countrywide or even global traffic without having to build your own huge network of buyers.
2. The demand is based on the urgent need
Have you ever had a car lock that just stopped working? What did you do? Did you wonder for weeks if you should fix it or not? Or maybe you just looked up some nearby car repair shops to have it fixed right away?
Or maybe there was a nasty problem with cockroaches in your basement (ugh!)? Did you search how to get rid of them in Google? Maybe you were reading some how-to article about where to spray that anti-cockroach-ninja-spray and then you noticed this little form between the paragraphs…
Yeap!
…that nice little form telling you to leave your phone number and someone will take care of that for you!
Doesn’t it sound like a good, warm lead for your future client?
In general, problem-solving niches are a good fit for lead generation. This is not a must, but definitely a thing to consider when trying to evaluate earning potential. Websites in such niches will have higher conversion rates on lead forms and lead buyers will have a much easier time closing those deals.
3. No easy way for sales verification
This is more like a general tip which niches can have good CPL programs.
Most of the eCommerce and digital-product based companies prefer to work on either PPC or CPS (Cost per Sale) models. If you have a proper audience you can benefit from both of these models by placing display ads on your site and promoting offers as an affiliate. But what when the sale process is more manual and is either too long or there is no clear way for you to verify if a prospect made a purchase? This is a case for the industries I mentioned above – insurance, mortgage, home improvement.
It is also true for many other high ticket niches where a potential buyer needs more time before they spend a big pile of money.
It is true for many SaaS businesses as well. Although usually, they have a clear way to verify purchase they may have a slightly different motivation. Many SaaS companies offer a CPS (Cost Per Sale) model with a recurring commission. This means that for each customer you referred you will be receiving gratification every single month for as long as this person or company keeps using the service! Some SaaS businesses prefer to reward you one time and they offer a CPL (or sometimes time-limited CPS) model. Also, many affiliate marketers prefer to get even less money but upfront.
Lead generation revenue factor: Type of leads
Not all leads are created equal. Behind each lead there is a human being. Even if you sell B2B leads then each company is represented by people. This people have different level of interest in the product or service your client is selling. When you Google for companies that sell leads you will find all different kinds of offers with all possible prices, ranging from just a few cents per lead to hundreds of dollars. It is easy to get confused. Here is a list of lead types you can find online.
1. Cold contact info
This type of leads are usually of very low quality or they are total garbage. Very often these „leads” are other company’s contact databases. Sometimes they may be even scraped from random websites on the web. If you planned to sell something like this – don’t. If you don’t have someone’s consent you cannot sell his contact info to anyone. Even if you do – it is not a sustainable business model. You will not make money with that and you may get yourself into trouble.
2. MQL Leads
MQL stands for Marketing Qualified Lead. Typically, these leads are people who performed some action (like signup for a free eBook download) which proves they might be interested in the target product or service. Most of them are not yet ready to buy and requires further nurturing from the sales team.
3. SQL Leads
SQL stands for Sales Qualified Lead. Leads that fall under this category are contacts who directly expressed their interest in the target product. As an example, they could fill out the form to schedule an appointment or left their phone for salesperson to call them.
In many industries you can increase the value of your leads by asking your prospects a few additional questions. This can pre-qualify your leads and convert them from MQL to SQL. If you are afraid of losing prospects due to too long contact form, you can do it as a follow-up option. This way you will end up with both MQL and SQL leads in your inventory!
Lead generation revenue factor: Are your leads exclusive?
As it goes without saying, are you selling each lead to many buyers? If so, you have to disclose that your leads are shared and price them accordingly. Sometimes it is better to sell one lead to multiple buyers and sometimes it is better to go with the „exclusive” path. This very much depends on the industry so you have to make your own research before making a decision.
For example, in industries related to home improvement services, it is a very common practice to sell one lead to more than one buyer. This way someone who is interested in, say roof repair job, can get quotes from a few local contractors, not just one. It may even make it easier for you to collect that lead because you are providing higher value for your contact by saving their time.
Lead generation revenue factor: Who is your buyer?
There are two basic types of lead buyers:
End buyers – companies or people who want to sell something to your contact. Selling leads to them is the most profitable on per lead basis because you are cutting off any intermediary services. The downside is you have to build your own network of buyers. All the leads for which you do not have an appropriate buyer will go unserved and you will not benefit from such leads.
Pros:
Highest price per lead
Cons:
You need to build your own network of buyers
A lot of leads may go unserved
Lead aggregators – companies who work as an intermediary. They have their own network of buyers. Sometimes they also do the legwork needed to verify the quality of provided leads. It can be done either by some call center or additional email sequence. These companies can also generate they own leads.
Pros:
Less leads go unserved
Easier to start and to manage.
Cons:
Lower price per lead
The upside of selling your leads to aggregators is that it is much easier to start. The obvious downside is that price per lead will be lower. You can also mix both approaches and sell your leads to aggregators only if you don’t have a matching buyer.
If you want to find lead aggregators just look for companies that sell leads in your space and ask them if they are interested in buying your leads. Here are a few examples:
leadpoint.com (insurance, mortgage, loan, finance)
equileads.com (insurance, mortgage, loan, finance)
www.leadrop.com (B2B lead exchange market)
There is also a third option. In theory, it falls under end buyers category but it works a little bit differently. This option is all the CPL affiliate programs you can find on platforms like Commission Junction or ShareASale and even more private ones.
The main difference is you don’t send them contacts that you collected. You send them traffic to their own landing pages and conversion happens on their side. This requires trust but if you promote well-established business the risk is not that big.
Pros:
Bigger partners may have better conversion rates on their landing pages than you do.
Promotional materials from the brand (graphics, widgets, etc).
Cons:
Conversion does not happen on your website so you have to trust your partner.
Fewer options for customizations of the way you generate your leads.
Lead generation revenue factor: What is the source of your traffic?
Before you sell any lead you have to generate it. Pretty obvious, huh? But do you already have any traffic? If you own a website or YT channel and have plenty of targeted visitors then you can start collecting leads right away. On the other hand, if you are just starting out, here are a few things to consider.
PPC will not work… usually
Unless you are a very skilled PPC marketer with a proven track record with tons of generated leads, you will most likely fail. There is only one way you can use PPC traffic for your advantage.
Retargeting.
Yes, using those creepy ads that follow you every time you bought a new basketball ball. You already bought it! Why would you want to buy another one?
The facts are retargeted ads get around 10x higher CTR (Click Through Rate) and convert 70% more often (source). It does not mean it is always a good idea to run retargeted ads for lead generation but is a thing to consider. Especially if you have some articles which are visited by highly targeted audience.
Are you able to produce quality content on a subject?
If you plan on writing each article based solely on brief research you should rethink your approach. Having your articles basically rewritten from a few others found on Google will take you nowhere. The same goes for hiring random writers from content mills like iWriter and the like. This can work only if you know the subject or hire a writer who knows the subject. Otherwise, you are not bringing any value to the table and you will have a really hard time getting organic search traffic. If this sounds too pessimistic I can cheer you up: except for most competitive niches and keywords most of the published content is at best mediocre. If you put an extra effort you will stand out very quickly. And Google is getting better and better these days in recognizing good content.
So, if you can produce quality content on your own then your cost is mostly your time. But if you plan on hiring writers then remember that outsourcing good quality content will cost more than hiring a random freelance writer.
So, is lead generation business profitable?
As I have been trying to show you, assessing the profitability of lead generation business can vary heavily based on many factors. That is why giving simple yes or no or any general rounded number is missing the point. Instead, I will give you three sample estimations for the three most popular lead gen industries that we have already touched on in this article: mortgage, insurance, and home improvement.
Case 1: How much can I make selling mortgage leads?
Average price per mortgage lead: $25 – $50
Approach: Website with mostly text content and pictures. Articles are targeted towards keywords and topics with various information that the target audience is seeking when looking for a loan or for a new house.
Buyers network: All leads sold to lead aggregators.
Lead generation methods:
Static form placed within each article. Readers can sign up to receive offers or to be contacted by lenders. Contact has to provide basic information for evaluating the quality of the lead to the lead buyer.
Contact phone within each article. Calls tracked and redirected to lead buyers using call tracking software.
Estimated conversion rate: 0.25%
Estimated average price per lead: $20 (The assumption is we are selling all of them to aggregators)
Estimated monthly revenue:
Leadgen revenue: $500
Ad revenue: $150($15 RPM*)
* RPM – Revenue Per Mille (per 1000 page views). The estimated RPMs may seem quite high but assessing potential revenue from ads is a bit complicated. In general, if you are below 10K monthly visits you are stuck with AdSense (which pays the lowest). When you reach 10K you can move to Ezoic which pays better and from around 100K you can move to AdThrive which pays much better. Also mortgage and insurance are topics that tend to perform way above the average and usually, you will have much higher ad revenue with them.
Total monthly revenue: $650
Leadgen revenue: $5 000
Ad revenue: $3000 ($30 RPM*)
* RPM – Revenue Per Mille (per 1000 page views). The estimated RPMs may seem quite high but assessing potential revenue from ads is a bit complicated. In general, if you are below 10K monthly visits you are stuck with AdSense (which pays the lowest). When you reach 10K you can move to Ezoic which pays better and from around 100K you can move to AdThrive which pays much better. Also mortgage and insurance are topics that tend to perform way above the average and usually, you will have much higher ad revenue with them.
Total monthly revenue: $8 000
Leadgen revenue: $25 000
Ad revenue: $15 000 ($30 RPM*)
* RPM – Revenue Per Mille (per 1000 page views). The estimated RPMs may seem quite high but assessing potential revenue from ads is a bit complicated. In general, if you are below 10K monthly visits you are stuck with AdSense (which pays the lowest). When you reach 10K you can move to Ezoic which pays better and from around 100K you can move to AdThrive which pays much better. Also mortgage and insurance are topics that tend to perform way above the average and usually, you will have much higher ad revenue with them.
Total monthly revenue: $40 000
Case 2: How much can I make selling insurance leads?
Average price per insurance lead: $20 – $50
Approach: Website with mostly text content and pictures. Articles are targeted towards keywords and topics with various information that the target audience is seeking when looking for insurance.
Buyers network: All leads sold to lead aggregators.
Lead generation methods:
Static form placed within each article. Readers can sign up to receive quotes or to be contacted by realtors. Contact has to provide basic information for evaluating the quality of the lead to the lead buyer.
Contact phone within each article. Calls tracked and redirected to lead buyers using call tracking software.
Estimated conversion rate: 0.25%
Estimated average price per lead: $15 (The assumption is we are selling all of them to aggregators)
Estimated monthly revenue:
Leadgen revenue: $375
Ad revenue: $150($15 RPM*)
* RPM – Revenue Per Mille (per 1000 page views). The estimated RPMs may seem quite high but assessing potential revenue from ads is a bit complicated. In general, if you are below 10K monthly visits you are stuck with AdSense (which pays the lowest). When you reach 10K you can move to Ezoic which pays better and from around 100K you can move to AdThrive which pays much better. Also mortgage and insurance are topics that tend to perform way above the average and usually, you will have much higher ad revenue with them.
Total monthly revenue: $525
Leadgen revenue: $3 750
Ad revenue: $3000 ($30 RPM*)
* RPM – Revenue Per Mille (per 1000 page views). The estimated RPMs may seem quite high but assessing potential revenue from ads is a bit complicated. In general, if you are below 10K monthly visits you are stuck with AdSense (which pays the lowest). When you reach 10K you can move to Ezoic which pays better and from around 100K you can move to AdThrive which pays much better. Also mortgage and insurance are topics that tend to perform way above the average and usually, you will have much higher ad revenue with them.
Total monthly revenue: $6 750
Leadgen revenue: $18 750
Ad revenue: $15 000 ($30 RPM*)
* RPM – Revenue Per Mille (per 1000 page views). The estimated RPMs may seem quite high but assessing potential revenue from ads is a bit complicated. In general, if you are below 10K monthly visits you are stuck with AdSense (which pays the lowest). When you reach 10K you can move to Ezoic which pays better and from around 100K you can move to AdThrive which pays much better. Also mortgage and insurance are topics that tend to perform way above the average and usually, you will have much higher ad revenue with them.
Total monthly revenue: $33 750
Case 3: How much can I make selling home improvement leads?
Average price per home improvement lead: $20 – $60
Approach: A website with mostly text content and pictures. Articles are targeted towards DIY, how-tos and home improvement advice keywords and topics.
Buyers network: A big number of home improvement contractors for several different geo areas. Rest leads sold to lead aggregators.
Lead generation methods:
Static form placed within each article. Readers can sign up to receive quotes or to be contacted by contractors. Contact has to provide basic information for evaluating the quality of the lead to the lead buyer. These leads should be primarily sold directly to contractors.
Contact phone within each article. Calls tracked and redirected to lead buyers using call tracking software. Due to technical difficulties, we assume this leads can be redirected only to aggregators.
Estimated conversion rate: 0.1% (we can suspect that the topics for articles will be a bit less targeted than for insurance and mortgage.)
Estimated average price per lead: $25 (The assumption is that most of the leads will be sold to contractors directly – that is why we assuming a bit higher price per lead here).
Estimated monthly revenue:
Note – this industry might be harder as it requires to have your own network of buyers. Otherwise, it may be hard to sell your leads for a decent price. On the other hand, it is much easier to get organic traffic because the competition is not as high as with mortgage and insurance.
Leadgen revenue: $250
Ad revenue: $100($10 RPM*)
* RPM – Revenue Per Mille (per 1000 page views). The estimated RPMs may seem quite high but assessing potential revenue from ads is a bit complicated. In general, if you are below 10K monthly visits you are stuck with AdSense (which pays the lowest). When you reach 10K you can move to Ezoic which pays better and from around 100K you can move to AdThrive which pays much better. Also mortgage and insurance are topics that tend to perform way above the average and usually, you will have much higher ad revenue with them.
Total monthly revenue: $350
Note – this industry might be harder as it requires to have your own network of buyers. Otherwise, it may be hard to sell your leads for a decent price. On the other hand, it is much easier to get organic traffic because the competition is not as high as with mortgage and insurance.
Leadgen revenue: $2 500
Ad revenue: $2000 ($20 RPM*)
* RPM – Revenue Per Mille (per 1000 page views). The estimated RPMs may seem quite high but assessing potential revenue from ads is a bit complicated. In general, if you are below 10K monthly visits you are stuck with AdSense (which pays the lowest). When you reach 10K you can move to Ezoic which pays better and from around 100K you can move to AdThrive which pays much better. Also mortgage and insurance are topics that tend to perform way above the average and usually, you will have much higher ad revenue with them.
Total monthly revenue: $4 500
Note – this industry might be harder as it requires to have your own network of buyers. Otherwise, it may be hard to sell your leads for a decent price. On the other hand, it is much easier to get organic traffic because the competition is not as high as with mortgage and insurance.
Leadgen revenue: $12 500
Ad revenue: $10 000 ($20 RPM*)
* RPM – Revenue Per Mille (per 1000 page views). The estimated RPMs may seem quite high but assessing potential revenue from ads is a bit complicated. In general, if you are below 10K monthly visits you are stuck with AdSense (which pays the lowest). When you reach 10K you can move to Ezoic which pays better and from around 100K you can move to AdThrive which pays much better. Also mortgage and insurance are topics that tend to perform way above the average and usually, you will have much higher ad revenue with them.
Total monthly revenue: $22 500