My First Million - One Question Friday: How To Start A Lead Gen Business

Episode Date: May 27, 2022

Shaan Puri (@ShaanVP) and Sam Parr (@TheSamParr) answer one listener's question. On this episode, Neil Gupta, from Toronto, Ontario, Canada asks what are the first three actionable steps to starting a lead gen business and what industries should he target? To submit your question and hear yourself on My First Million, go to MFMPod.com and click on the circle with the microphone in the lower right hand corner. ----- Links: * Do you love MFM and want to see Sam and Shaan's smiling faces? Subscribe to our Youtube channel. * Want more insights like MFM? Check out Shaan's newsletter.

This is Neil Dupta from Toronto, Ontario, Canada. My question for you is, what are your first three actionable steps to creating a lead gen business and what are the three industries you would go after in small communities? Okay. We could do that. It's hard to come up with three, but I think we could just talk about it in general. Well, I got into this business a little bit. I was testing on a lead gen site.

What I did was I emailed another. lead gen site and I just said would you buy leads from me how much and they said if your leads were qualified using these parameters we will pay you a hundred dollars per lead it's for a trucking website that I was working on and they said if they are long commercial driver license folks and you are able to verify that by getting a picture of their license we will give you $100 and so I assumed $100 was the cheapest it would cost. And then if I, I also went on LinkedIn and I emailed the marketing and growth managers at the actual trucking companies. And I said, how much do you guys pay? And they said, $150. And that kind of gave me that range of I can acquire it for $100 to $150. And then what I did was,

I went and drove ads and traffic to a website that got this information. And I was able to get leads for $250. And I thought, huh, okay, if I just, if I just fooled around and got it for $2,000, $250 and they're willing to pay $150. Like, I think there's something there that I can actually make this profitable. That's what I did. Yeah, I think my first step would be because I don't know a ton about lead gen. I'd be like, okay, well, who's killing it with lead gen? And so I would just, my first step would be like, find a blueprint of success.

So who is a newish lead gen site? So I wouldn't be looking for one that like started in 1998 and has just been cranking since then. I'd be like, all right, what's a newish lead gen site? site. So something that started maybe the last two, three years. And I would go look at their stuff. I'd go read an article about them. And then I would contact them and be like, hey, I'm really interested in your business. And I'd either be like, I'm interested in buying your business. Can you tell me a little about it? Would you be open if, you know, at the right price, would you be open to selling your business? And they sell yes or no. Or I would say, hey,

I'm really trying to learn about the lead gen business for a different category. Would you, you know, would you be down to, you know, talk to me for 15, 20 minutes, whatever? And they might say yes, they might say no. If I wanted to make it juicier, I could say, hey, I'm doing an article on my favorite five, you know, truck driver lead gen businesses or truck driver recruiting businesses. I want to feature you guys. Just need to hop on a call 30 minutes. I'll ask you a few questions and I'll use it in the article. And then in that, you know, article, I would basically, while doing that call about the article,

I would ask them how they started, how they get it, how they get the leads, what's the hardest part, blah, blah, blah. And I would try to figure out a blueprint to figure out, is this even the business I want to be in? And is there a common formula that these businesses use? Like, oh, they all use Facebook ads as their traffic source, or they all use Google keywords as their traffic source.

Then they take you to a landing page with a quick email capture and then three question qualifier right after that. And then their business models that they sell those leads to whoever at certain price. And this only works if the leads, are like, you know, $100 worth $100 or more, the ones that are below that seem to struggle. And I would try to figure out how much money they make and how they do it. And that would be my first thing is I'd be searching for a blueprint, essentially, that I can remix. It's like, all right, I'm going to, 80% is going to be the same and 20% is going to be different. So the 20%

that's different might be, I'm in a different category or I do it from a slightly different, like, you know, I put a greater emphasis on copywriting or newsletters or whatever in order to generate those leads. That would be my first step. And which industry? So we have a couple examples here. So you did you did trucking on your own. Before that, you've shown me an apartment one. What was it?

Apartment. What was the lead gen for? Well, what leads did they want? The company that bought my company years ago was called Apartment List. Originally, they were called Vertical Brands. And they just owned lead gen sites for senior living. they owned a lead gen site for a rent to own housing, which was like they bootstrapped,

I think like six or seven million in revenue. Then they owned apartment list, which eventually became the main company, but that was lead gen for apartments. And then they owned it for cars called autolist.com, which was acquired by car gurus for like $30 million. And so that was really effective. But I would,

the math is basically like, how valuable of a purchase price is the product multiplied by the frequency that they one person buys the product multiplied by the number of people who have that need. So for example, if it's lead gen for CEOs of large of like small to medium size businesses, so it's like a job board for potential CEOs, a small business would be one to spend like $50,000 on that. and but they're only going to hire once every eight years. So like that kind of gives you like help.

And there's like not that many people who are into that. That kind of gives you like the math behind the opportunity. Does you know what I mean? Yeah, exactly. I'd be looking for high ticket price things. So I was going to say senior living. My father-in-law does senior living and I see that like he wants customers. A customer to him is going to pay maybe six grand a month for a room.

So their customer and, you know, and they'll last on average, you know, two years at the place. Right. So you're getting 24 months times $6,000. So their customers are very valuable. They're willing to give you $6,000 for a, you know, for a customer if you can send them one. So their leads might be, you know, a few hundred bucks that they were willing to pay for if you're qualified, right?

If you're in the area and whatever else. So senior living was one I was going to say. And then the other ones are like, you know, I see this with like moving companies or construction companies or like pool construction companies. Like, oh, that's a $50,000 project to build a pool in this area. And maybe the pool. construction companies are not the best at SEO like optimization. So I'm going to go after that category because I think that that's that's one where I can I can beat them at their own game

and sell them back those those customer leads. So I would look for really high ticket price things like moving pool construction, senior, you know, senior care. There's one more that I was thinking of that's all right, slip by mind. But yes, things like that. I think those are those are great categories to go after. Can't find this client info. Have you heard of HubSpot? HubSpot is a CRM platform, so it shares its data across every application. Every team can stay aligned. No out-of-sync spreadsheets or dueling databases. HubSpot, grow better. Can I share one that I just heard about that I actually think would be pretty valuable here is because it's related to what you were saying about senior care facilities.

There's this new kind of facility that's coming online that's essentially like mental health. health triage, I think, is the way to think of it, which is essentially like you walk in and there's a bunch of lazy boys and they've got TVs in front of them. And if you're having like an episode, a mental breakdown, you go in there and they might help medicate you if you need that. And they'll set you up with a therapist on this big TV and just like make sure you're okay while people figure out what's going on because mental health issues are becoming more and more prevalent. Okay. So this is like actually just coming online. And this is like a new type of care facility.

And I feel like there's probably not a lot of competition yet for finding those types of leads. So there might be some opportunities to help. What's a call? What do you even Google? That's a good question. I know my buddy Dennis is like helping build one. So he told me about it. But I don't know what you would call them.

Yeah, mental health care treatment or something like that. But like I think that, you know, the general principle. is you want a high-ticket, you know, buyer of your lead, so you need them to be making a ton of money off of the thing. You want to have low competition if possible. The other thing is, can you use content as, like, your lead gen? So you're not just playing a Google Keywords bidding game or a Facebook ads keyword bidding game. But, like, if you are educating people about something, so, like, I don't know, let's call it, like, what's that, like, surgery that a bunch of people getting, like, Brazilian booty lifts or something like that? It's like, there's just. There's just. There's a lot.

some sort of some new thing that a bunch of people are curious about, right? And the topic itself, like, kind of lends itself to content or ratings or reviews or, like, you know, pros and cons and stuff like that. Like, can you create YouTube or TikTok content that's just talking about, you know, the pros, the cons, the good stories, the horror stories, the whatever else? And then basically if people, and then you capture interested parties who are like, they were Googling to try to learn more about it. And you as the educational source become like, you know, trusted. You never need to operate the underlying business. You just sell that lead, you know, farm them to a partner who's basically like, you know, your vetted partner to do that, that procedure

or do whatever it is in a given geography. Sick. Did we answer that, Ben? I think it's a good ass answer. That's it. One question Friday. All right. And if you want your question read live on, on the show, go to mfmpod.com and click on the microphone. Ask us questions. Bye