Lead generation agencies find customers for other businesses instead of selling to consumers directly. They charge retainers or pay-per-appointment fees and use paid ads or outbound sales, making it a beginner-friendly agency model compared to email marketing or social media management.
Hey, hope you're doing well. In this video, I want to break down exactly what a lead generation agency is and how exactly they go about making money as a business. Right? So obviously if you've seen a bunch of my other content, either on my Instagram page or on this YouTube channel, you realize that I talked a lot about building lga or you know, that's short for a lead gen agency, lead generation agency. So pretty much, what is a lead generation agency? Well, according to Google, if we search up what define lead gen agency, what is a lead generation agency? It does say that a lead gen agency is a company that develops and implements a strategy that helps businesses to attract more qualified leads, meaning prospects that are more likely to buy from that said business. But what exactly does this mean? That's the Google definition. What? Well, if we think about a restaurant, let's take a sushi restaurant, because that's my favorite type of food, sushi. How does a sushi restaurant make money? Well, the product that they sell is the actual sushi, right? Whether that's the rolls, the salmon sashimi, whatever that is, right? That is the product that they sell. How the sushi restaurant actually makes money is by attracting customers to come into the restaurant and pay them 30, 40, 50, even $100 for their Simon Sushi. Right? But how do those sushi restaurants go about attracting those customers? Right? There's a bunch of different avenues to do so. They could post a lot of content on the marketing, they could pay some influencers, they could reach out directly to different people, run ads, right? That is exactly what a lead generation agency does, right? They work with, let's say the sushi restaurant and basically say, hey, hey, we'll help you run ads, we'll help you work with influencers to build more awareness for your business and to get more people to come in as paying customers to buy your sushi, right? That's essentially what a lead generation agency does. Except the difference is lead generation agencies work with B2B companies. B2B meaning business to business. So basically any business that sells its product or service to another business. So think about, let's say recruitment agencies, right? The recruitment agency is selling its services to other companies that are hiring people, right? So it's B2B software development agencies, right? If you're a software development agency, you're gonna approach another business and basically say, hey, we'll help you design this app. We'll help you design the software for your business, right? So they're selling their service to another business, right? Or let's say marketing agencies, right? If you are an ads agency, right, you're running ad for another business to help them promote their product or service. Or even a software company. A lot of software companies are B2B. Those are the type of companies that a lead generation agency works with. It's the exact same thing as a sushi restaurant, except that LGA, a lead generation agency, helps and works with other B2B businesses, right? So now there's a bunch of different ways to generate leads. I know in the example of the sushi restaurant I mentioned, for example, running ads, that's just one avenue to generate leads. Typically speaking, there are two typical ways to generate leads. The first way is paid ads, right? Paid traffic. You're paying money to attract customers. So think of ads, think of SEO, stuff like that, TikTok ads, that is paid ads. Now the second way is more of an organic outbound strategy. So. So for example, if you've ever watched the movie Wolf of Wall street, you would know that Jordan Belfort, the main character, he ran a company that basically cold called a bunch of people to sell worthless penny stocks, right? What he's doing is cold calling. That is a type of organic way of getting leads, right? That's cold calling is one way to do so. Another way is cold emailing, cold DMs, whether that is DMing people on LinkedIn, which is a business platform, whether that's or Facebook or Instagram. And basically all of these ways, cold calling, cold emailing, cold dms, they're just ways of attracting people, talking to potential customers and basically saying, this is our product, this is our service. Any interest in learning more, right? The only difference is with cold emailing, cold calling and cold dms, they're not necessarily paid the same way that paid ads is, right? Paid ads. Let's say you spend 500 bucks on Instagram ad, you will get, you're expected to get a return. This is known as roas return on ad spend. Right? You're paying money to get more customers. Now on the cold calling, cold emailing and cold DM side, you're not necessarily paying money to attract for customers. You might be paying money for the infrastructure. So if you're cold calling, you might have to invest in, let's say a phone to pick up to actually call people, right? If you're emailing, you might have to invest in some email accounts, LinkedIn, you might have to get a LinkedIn profile. But at the end of the day, the cost of those channels are much, much, much cheaper than that. Of paid ads. Which is why so many businesses are interested in the organic outbound strategies as well. Right. So that's basically what a lead generation agency does to generate leads, right? They approach different businesses, pitch the services using cold emailing, cold calling, cold dms, right, As a channel. But how exactly do lead generation agencies get paid? Well, the good part about this model is it's very simple, very easy to get paid. There's typically a couple of ways of doing so a lot. I run a lead generation agency and the way I get paid is a flat retainer model. So every single month we make, you know, we charge our clients x amount of money, right? So whether that's 1,000, 2,000, 3,000, at our own agency, our own lead generation agencies, we have customers paying us anywhere from two to $5,000 a month. That is a flat retainer. So every single month we're making that amount of money. What a lot of other people do is they do retainer plus pay per appointment. So what that means is for every one appointment, for every one sales call, every qualified lead that they generate, they'll charge an X amount of money. For our business, we also have clients that are on that payment structure as well. So we charge them a set amount of money every single month. And if we generate, let's say five leads each lead, we will charge them 200 bucks. Generate five of them, we charge them an extra thousand dollars. Right? So that's more of a performance type of payment structure. It's extremely common. And then we also have setup fees, right? So a lot of people, when they start working, they finish pitching the lead gen agency services to different businesses, they often charge a setup fee to those said clients, right? To pay for email accounts, the email sending software, the LinkedIn accounts, the LinkedIn automation tools, stuff of that nature. So they make money off the setup set, they make money off of the setup fee plus the pay per qualified lead structure, right. And as a result they make a ton of money. Right? This is a business model where it's not hard at all to get to $10,000 a month. It's pretty simple to go from 10 to 20, right? And obviously beyond that, you have to start putting certain systems in place, hiring different people to help you achieve, let's say 50k per month, 100k per month. But basically going from 0 to 10 is extremely easy to going from 10 to 20 is pretty easy as well. And the best part about running a lead generation agency business is it's extremely beginner friendly. Now for myself, a little bit of backstory is before I built my lead generation agency business, I actually ran a klaviyo email marketing business, right? So if we think about email marketing, there's two aspects of it. Number one is generating clients and number two, fulfilling on the email marketing services for those clients that you just signed. Now obviously I mastered the first type which is finding the clients, but I also had to learn how to develop and deliver the email marketing service. So writing all the flows, the email marketing, the graphic design, and there's just a bunch of skills, quite frankly, too many skills for a beginner like myself to learn in a very short period of time. So it's extremely challenging. The same challenge applies for smma, right? If you run a smma, you have to, number one, figure out how to find clients and how to sign clients. And the second aspect is how to run, let's say, ads for them. Those are two completely different skill sets that you will have to master and it's extremely challenging for beginners. Now with a lead generation agency, this challenge does not exist, right? Because the same way that you go about delivering for clients, which is helping them cold email, cold call, cold LinkedIn is exactly what you do to get clients for yourself. So pretty much you're really only learning one key skill which is generating leads. If you're able to generate leads for your own business, then it's not too different from the process that you use to help your clients generate leads for them. So that's pretty much what a lead generation agency is, what that business model is, how they get paid and why. I believe that the lead gen agency model is one of the best online business models for beginners. That's pretty much the video that I wanted to make today. Hope you found this helpful. If you have any questions, make sure you drop that down below in in the comments section. And yeah, that's pretty much what the video. Hope you liked it. Thank you. Bye bye.
