This article is part of the Tommy Cat Media quick-fire series, which discusses key marketing concepts and applications tailored to specific industries in under 800 words.
Affiliate marketing has grown in popularity because of its loose barriers to entry and the attraction of making easy money.
A microcosm of affiliate marketing is called “lead generation”. Depending on the niche or vertical, lead generation can be a very lucrative affiliate marketing category that can give you a lot of return on investment when done properly.
In this quick-fire blog entry, we’ll define what lead generation is as an affiliate marketing tactic and the pros and cons of lead generation as another revenue stream for yourself or your business.
Lead Generation as an Industry
Glimpse into Affiliate Marketing
One of the biggest hurdles any business has to jump is acquiring new customers.
Acquiring new customers can be daunting as it’s very expensive and could be very hard to do especially if you don’t have a talented marketing team.
Companies realized that if they create something called an affiliate program where outside companies or individuals market their products and compensate them only when the desired action takes place, they can save themselves lots of money, risk, and time.
There are typically three ways you get paid in affiliate marketing:
- Generating a click.
- Generating a sale
- Generating a lead
Lead Generation Defined
In the lead generation industry, affiliates or publishers create landing pages that match the vertical of the program they signed up for or the client.
For example, an affiliate of “Joe’s Home Services” (Joe Home Services is the client) would create a landing page promoting home services.
The affiliate will then run traffic to the landing page through any means (paid media, organically, email) to try to get people to complete a lead form saying they are interested in taking the offer being promoted on the landing page.
Once the lead form is complete, the lead data is sent to the client. The client would then contact the lead and try to get them to purchase their product or service.
The affiliate can get paid in several methods in lead generation.
- Posted Lead – when a lead is sent directly to the client’s system.
- Live Transfer – usually when the lead is called by the affiliate’s call center to verify if it’s ready to purchase, if yes it’s sent to the client’s call center to complete the sale.
- Click-to-call – there’s a click-to-call button on a landing page or email, and the user takes the action and is directly put in touch with the client’s call center. Also known as an inbound lead.
Pros of Lead Generation as a Source of Income
Payouts can be very good.
You can earn lots of money in lead generation especially if you are in a regulated industry like healthcare or insurance.
A posted lead can pay out north of $30 a lead and a live transfer can be worth close to $100 per transfer for the affiliate.
The thing that’s great about lead generation is that most likely you won’t be generating only one lead or transfer. You’ll be generating several.
If you generate 50 leads a day and post them over to the client at $30, you can land yourself a pretty nice revenue of close to $45,000 a month.
Easy to set up, return on investment is high.
The cost to set up a landing page is very cheap. You’ll need about $30 to get that setup.
The thing that cost’s a lot of money is the ad budget you need to acquire traffic. You should aim first to spend at least $3000 per paid media channel you decide to run on.
But let’s say you make $45,000 only spending $3030 on your landing page and ad budget, that’s an ROI of 1,385.15%.
Cons of Lead Generation as a Source of Income
Clients won’t take any lead
Clients will only take leads that convert. If you give them poor leads, they won’t pay for them.
You’ll most likely lose money first then make a profit
The secret to lead generation is that you need to create an offer path and sell leads to multiple clients. Relying on one client or one affiliate program will not make you money.
You need to create a path of related offers and get people to sign up for multiple offers to justify the spending you made to acquire them.
Conclusion
Lead generation can be a great side hustle if you understand how to make the most of your ad spend. If you go into this industry thinking that you’re going to make a quick buck, you’ll be mistaken.
