How Much Should You Charge For Lead Generation

Pop quiz. How much should you charge your lead generation agency clients? Is it 3,000, 5,000, $10,000 a month? Well, if you chose any of those options, unfortunately you are wrong because the answer to the question is not as simple as what you might think. And in today's video we'll be talking about how much should you charge for your lead generation agency clients? And make sure you stick to the end, because in today's video we'll be talking about three things. The first are the general pricing structures and tiers. The second is how to know how much you should charge. And the third one is why and how to actually charge a high ticket price for your lead generation services. So when it comes to lead generation agency pricing structures and tiers, there are really three primary pricing tiers. The first one are setup fees and performance. The second one are monthly retainers. And the third one is monthly retainers plus revenue share. Right. And I'm going to get into detail showing you exactly what each of these three pricing structures is and the pros and cons. The first one is setup fees and performance. This is by far the easiest to sell to cold traffic, which is the setup fees plus performance deals. And this is the pricing structure that you should use if you are starting your lead generation agency. Mainly because the pricing structure has a built in guarantee for clients while still allowing you to collect revenue for your business. So an example of setup fees but plus performance deals is $2,500 one time setup fee plus $250 per call. And the reason why this is the easiest pricing structure to sell is because the client is paying you one time, which should cover the cost of the infrastructure for several months. And the next time that they pay you is when you actually get them results. Meaning if you don't get them results then you won't get paid again. But obviously because you're charging the setup fee, you should still have enough money to cover all your overhead costs, plus leave a little bit of room for profit and to pay the time to set everything up. Which means as a lead generation agency, you need to be strategic and understand your cost to actually deliver the service. Because if you're unable to deliver results for reasons that are completely out of your control or it takes longer than you expect to deliver results, you might actually run into the wreck. So typically for one time setup fees, I recommend charging somewhere between 1500 to $3000 for your first few deals. Right? My first client paid me $3,000 setup plus $250 per call. Right. And what this also means is once you get really good at lead generation, there's a massive opportunity to profit. Because if you generate 20 sales costs in a single month at $250 per call, you can literally make $5,000 in a single month. If you're really, really good and let's just say you generate 40 calls, then you're making $10,000 per month, right? So you get the point. You're literally being compensated for your skill set. So the better you become, the more money you make, right? And it's just super, super profitable. And the return is literally infinite because the better you are, the more money you make and the more money your clients then go on to make. So that's the first pricing structure. The second pricing structure are monthly retainers. So this pricing structure provides stability and predictable month to month cash flow. However, it is a little bit harder to sell to cold traff. And it is very hard to sell if you do not have case studies. Right. While it might be hard and no, I'm saying it's hard, it's also not impossible. I've done it before to cold traffic. I know people who have sold monthly retainers without any case studies or experience. It just comes down to how you sell your service and how you position it. So it is possible. It's just harder to sell. Especially if you're starting out. You don't have experience, you don't have cases, you don't have testimonials. Right? So while this a pricing structure does provide more predictable cash flow, you're not going to be paid in direct proportion to your skill set. Meaning if you're charging $2,000 per month, whether you deliver 5 leads or 25 leads, you will still be invoicing your client for $2,000 at the start or at the end of every single month, depending on when you invoice your client. So that's the second pricing tier. The third one is what is called monthly retainers plus revenue share. This is a mix of the other two pricing structures that we talked about. An example of this is $3,000 per month plus 5% of revenue of closed deals. This is very hard to sell to cold traffic. And most of my clients at my own agency, Salesway IO is actually billed following this pricing structure because it provides the predictable cash flow of monthly retainers. So every single month I enter the month knowing that the client is going to pay me $3,000, $4,000, $5,000 plus I have the profitability upside of doing a great job of getting great results. For my clients, meaning I could profit more long term while still having that predictable cash flow that is needed for me to scale predictably. Right? So again, at my own agency, I only kind of only do these deals with good established clients. And this is the pricing structure that allowed me to scale to $50,000 per month while working with less than 10 clients concurrently. Right? So what almost always happens is when I'm sending cold emails for myself and I'm taking sales calls and people want to work with me, business owners want to work with me, I always start with either the setup fee plus performance or I start with a monthly retainer. And once I get them results, once they have made money from the leads, from the sales cost that I've generated for them, that's when I bring up the conversation and transition it to a monthly retainer plus revenue share. So these are the three types of pricing structures to be aware of for your own lead generation agency. So the next question is how much should you actually charge? And the answer to this question is very, very situational. There's not one size answer. The short answer is you will be able to charge more as you become more skilled and become more proficient at generating leads with cold emails. So don't expect to charge a high ticket price for your first ever client where you have no case studies and no experience. However, and I cannot stress this enough, do not work for free. Right? So if you go out and you sign a client for free and don't get good results, it's because you're not following the instructions and you went out and you are selling your services for free. So obviously I understand that there is value in working for free to gain experience and to learn, but you need to value your time. Why learn for free when you could be paid to learn? So people will also not value your services and they just won't like value what you have to do and bring for the table since it doesn't cost them anything, since they have nothing committed in the process, they have no skin in the game. So under no circumstances should you ever work for free and understand that another reason why you should never work for free is because there's also costs associated with cold email infrastructures, right? Because since cold emails, we're not sending them out of free Outlook accounts or free Gmail accounts, There's actually cost incurred with setting up these domains and setting up these email accounts, right? And obviously the month to month cost is variable based on the email accounts, the number of email accounts that you want to set up, and the Currency, because I'm in Canada, which makes the pricing a little bit different from someone who's in the States or India or UK or Spain or anywhere else. It's actually slightly different, but generally budget somewhere around 2 to $500 USD every single month. Right. And this is the USD currency. So if you're in other countries, it's going to be different. But again, this is completely variable based on the amount of email accounts that you are setting up. So as a general pricing structure, it is relatively simple to charge between 1,500 to $3,000 as the one time setup fee. And you can obviously call it an onboarding fee, a discovery fee, whatever it is, it's just a label for the term, but basically you're going to be charging a 1500-3000 setup fee and somewhere between 2 to $300 per qualified call. And obviously it's situational. If you know that your clients, they make $250,000 for every single client they sign, then obviously charge more for the qualified call because it's more valuable to them. Right? Every single lead is worth a lot more than two to $300. Right. Because they make so much money from, from each single lead and from each single client. So be smart about it. My first client, again was $3,000 setup fee plus $250 per call. And I personally know people who have charged this amount of money for their first client. So if you're watching this video or you're sitting there at home right now and you're telling yourself in your own head, I can never charge $2,000, $3,000, 1,500, because I just don't have experience or case studies. That is not true. There are literally people I know who are doing this. So for example, Jordan, right there, this guy's called Jordan. He signed his first client for $2,000 and $200 per lead. Right? Spencer closed his first deal for $3,000 setup plus $300 per call. Right. Kevin signed his first client for $3,500. First half due up front, second half due in the next month and $300 per call. Nelson, he closed his first deal for $1,500 upfront and $1,500 after the fifth cost. So basically $3,000 total and $250 per call, right? We have Tom's, who signed his first deal for $1,500, split within three payments to cover all his costs and $250 per call. We have Tyler close his first deal for $2500 set up $250 per call. Christian, 1500 dollars set up up front, plus $2000 monthly retainer. Right? So you see how there's room to be flexible between all of this, right? And with this guy who signed his first client for $2,000 setup and $150 per call, right? So hopefully you see that picture. These are real people who are going to the market. If you read these messages, if you pause this video or go back and read through the messages, all of them are saying that it's the first client. I had to go and scroll in my photo gallery for like 20 minutes to find these screenshots of them saying it was their first client. Right? And they're charging 1500, 2000, $3000. Christian is doing monthly retainers for their first ever client without case studies, without testimonials, and without experience. So this is 100% possible. It just comes down to how you sell it, how you position your offer, and how you position your service make it valuable, right? So the next aspect is why you need to be charging higher prices. So for me, I personally found a direct correlation between the amount of money that you charge and the quality of the client. So, for example, if you're charging $3,000 for versus $500, the type of businesses that you work with are actually completely different. I have found that clients who typically pay less money to be more likely to micromanage, they likely have more or worse offers, they're more likely to be less profitable businesses, and they're just less serious about your offering as a whole. And it makes sense, right? If, for example, for me, at my own business, if I was working with someone as paying them $10,000 per month, I would take it very seriously versus if I was only paying them $100 per month. Right? The $100 is not the largest amount of money, and I might not take it that seriously, as opposed to me paying $10,000 in a single month. Now, another good reason for why you need to be charging more money is in order to get to $10,000 per month. In order to get to 20, 30, 50, $100,000 per month. Which do you think will be easier for you to manage? Right. Strictly to get to 10k per month, do you think it'll be easier for you to sign 20 clients paying you $500, or do you think it'll be easier to sign four clients paying you $2,500? Now, the answer is the second one, right? It's way easier to sign four clients paying you $2,500 than to sign 20 clients paying you 500 bucks. Right. And in 99% of the time, when I talk to people and they struggle and they're stuck in the low ticket prison, the cause of the reason is literally their mindset. So for most people, $3,000 is a substantial amount of money, and it is. Right. And the reason why they believe this is because when you look at it from an individual point of view, the average person, for the average person, $3,000 is a lot of money. But you have to understand that we're selling to other businesses. Businesses are not the same as regular people, as individual people. So as an example, this for my own business, at my own lead generation agency, Salesforce IO, for us to process $50,000 in revenue in sales in a single month, we literally spend more. We lose more than $3,000 each month just to process our money through stripe. Right. Or if you're using PayPal, it's a little bit more than stripe, actually. Right. So I'll be losing more money to PayPal than I would be to paying for agency services. Right. So with this perspective in mind, it if you're pitching businesses that are proven, that are actually making money, there's a decent chance that they won't even flinch when you say our services is $3,000 at the end of a sales call. And all of this is a mindset thing because if you're still doing similar amounts of work, Whether you're charging $3,000 or 500 bucks, you're doing basically the same thing. Whether you're making more money or making less, you're still doing the exact same thing. The scope of work is very, very similar. Personally, I think if you're doing yourself and you're doing yourself and your business a massive disservice when you're charging less money, because less money equals to less cash flow equals to less resources to then go back to invest back into your growth. Understand that charging $500 will not be enough for you to go out to hire employees down the line to hire team members, which would then allow you to buy back your time to actually focus on growth. So you will not be able to scale to 10,000, 20,000, $30,000 in a single month by charging 500 bucks. Right. However, if you charge $3,000, that will be enough to pay for all of your infrastructure costs, your overhead, cost of your business, and you will still have tons of profit left over to reinvest back into trying new tools for your business, hiring new team members, hiring experts and knowledgeable people which then fuels long term growth back into your business. So the reason why I was able to scale my business so quickly go from 0 to $50,000 per month in less than a year was because I was charging a large amount of money. I was charging 2,500, 3,000, 4,000 $5,000 in a single month. And as a result I had money left over to go back to reinvest into hiring people, into buying better tools, into making sure I get better results for my clients, which then means I'm making more money. Now another thing to consider is I actually know people. I have a few friends who run lead generation agencies themselves and even other service based businesses, right? SMMAs, web design, all of these other business copywriting. And there isn't a single person that I know who is making tens of thousands of dollars at their agencies who are not at least charging $3,000 a month minimum, right? Some up to tens of thousands of dollars in a single month for their services. Right? So hopefully you understand that the key to scaling to $10,000 per month, the key to scaling past 10k per month is charging more money. Because you're just not going to make a substantial amount of money by charging 500 bucks $1,000. It's just not going to happen. So hopefully in this video you have a better idea as to how you should charge your services. The over idea is never work for free. Charge higher amounts of money, go with a setup plus performance fee up front and once you get good, transition it to a monthly retainer. A monthly retainer plus revenue share. So hope you found this video valuable.