Topic: Pricing leads

I have a potential lawyer client lined up.  I can do the whole information gathering portion, however I'm still very unsure about what to expect in terms of pricing leads.  I looked at the average CPCs for his main keywords, and they range from $4-$6 CPC.  Assuming a conservative 10% conversion rate, I should expect at least a $40-$60 payout for a 3-4 field submit.  Does this sound right?

Re: Pricing leads

I would try to go higher on a lawyer.  They have high profit margin and can afford to pay more per lead.  Besides, just w/ the numbers you have, if the cpc is 4-6 and you expect a 10% conv then $40-$60/lead means you only beak even.

Re: Pricing leads

I agree, with a lawyer I would try to go higher.  Plus while a 10% conv rate is certainly do-able, I would not use that in estimate a lead price. 

It never hurts to try to negotiate a high lead price.  But even if you end up in the $40-$60 CPL range it should be a profitable campaign.

Re: Pricing leads

I just spoke with the lawyer.  He just opened up his practice in late last year and he has been getting customers through referrals.  He hasn't done any form of advertising.  I asked him what his customer lifetime value is and he said he's hard to tell and he didn't know.  I asked him how much he can pay per lead.  He said if the lead matches his demographic, he can pay at most a couple bucks.   That won't even cover 1 click!

I'll be doing a followup email with him and see if we can get a reasonable CPA.

Re: Pricing leads

You need to drive home to the guy that this isn't just the contact information of random people in his demographic. He's buying leads of people that are actively searching for a lawyer in the specific niche that he practices in.

But... if he doesn't see the value in fresh leads from prospects that are in need of his services, then maybe his competition will. If he's a newb, and doesn't know anything about advertising, it may not be worth your time to attempt to educate him.

Last edited by kyleirwin (2010-04-20 09:19:49)

Re: Pricing leads

paycoguy- i work with several lawyers doing web dev. and tradish marketing efforts.  there are very strict guidelines on how an attorney can advertise and market (each state is different). I would suggest looking at the state bar associations website for guideline information.  I have found understanding these guidelines give you an edge over other marketers... something to look into if you plan to exploit this niche.

Re: Pricing leads

@kyleirwin
I just sent him a long email about ideas I had and also offering him a free trial.  I'll get the campaign set up for the free trial and if he doesn't want to pay $40-$50/lead, I'll seek out his competition.  http://www.getlawyerleads.com/cost/ offers leads for $20-$40 and I assume not as targeted as my leads would be. 

@jbcsmkt
Thanks I didn't realize they have these guidelines.  For those interested, here the are advertising guidelines per state:
http://www.abanet.org/legalservices/cli … tates.html

-Andre

Re: Pricing leads

I've talked to 3 prospective clients today: a lawyer, a realtor, and a motivational speaker (guru).  All three of them have never paid for clients before.  So when I ask how much it costs to get a customer, they don't know.  When I ask what the lifetime value per customer, they don't know.  When I ask how much they can pay per lead, they don't know, or they lowball me. 

Seems like it might be better to target businesses that are experienced in paying for customers.  They'll know what the market price for leads are.  What do you guys think?

Re: Pricing leads

There are a lot of business types used to operating on leads.  So you can definitely go that route.  But just because they haven't done it before and don't know how much a customer value is to them, doesn't mean you can't target them.  Most professions or businesses advertise in some way, maybe just explain to them this is a new type of advertising - one that only deals in results and no wasted ad dollars.  When you hit home the fact that its performance based the light bulb usually goes on in their head.

I'm in the mindset that any business can use this type of service, as long as its legal for their profession.

Re: Pricing leads

How to price a lead is a challenge for me too.  I want to maximize my profit while not scaring the client off with it being too high for them.

Giving a potential client a formula to have them figure out what a lead is worth to them could be helpful.

I was talking to a friend yesterday ( http://www.pinnaclelandscaping.biz )who is a landscaper and he was saying if he can at least get someone to hire him to cut their grass or do spring/fall cleanup even once then he knows they're a potential longer term customer.  I think the way he approaches the 1st job and then knocks on the door afterward to see if everything was satisfactory makes people feel good about his work.

So what popped in my head after he told me this?

My first real client!

But how can I show him that leads I sell to him can easily book a job with him and potentially be a long term customer?

Re: Pricing leads

kensavage wrote:

But how can I show him that leads I sell to him can easily book a job with him and potentially be a long term customer?

Offer to give him 5 or so free leads and if you can truly deliver quality leads I'm sure he'll have no problem paying for them.

Re: Pricing leads

Find out what their average sale amount is per customer and do a little discovery with them about how they extend this value over time or whether it's a one-shot deal.  You might just teach them something about their business. 

That being said, if a business owner doesn't know how much a new customer is worth to them then how good of a business person are they?