Part 3 | Lead Generation Arbitrage – Learn, Acquire & Make Money
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Part 3 | Lead Generation Arbitrage – Learn, Acquire & Make Money

Part 3 | Lead Generation Arbitrage – Learn, Acquire & Make Money

You will fail more than you will succeed. I can guarantee you that.

What’s more – you’ll fail nine out of ten times! 

But, I have some good news for you!

Even with 90% failures, you can still have a massive business. That’s the beauty and power of lead generation arbitrage.

At first sight, this big topic may seem confusing. I don’t expect you to get everything on day one. I’ve been in this business for more than 20 years, and I’m still learning.

That’s why I told you last week to listen to these episodes multiple times and make notes. 

It takes time to acquire all the numbers and principles. But the numbers make sense, I promise. 

And once you get lead gen arbitrage, you’ll never be out of work again!

In this episode, I summarized the things we went through during this brief course. 

If you tune in, you’ll also find out why a failure placement doesn’t mean zero revenue, what it means to optimize or kill, and what advantages certified Survey Detectives would have in this business. 

So, let’s dive in! 

 

Win Some & Lose Some

 

When you’re testing media, most buys will not work. 

But the best thing about this business – you really could fail 90% of the time and still win big. 

If you have one winning media buy for every ten that you test, it’s enormous!

Why? 

Because you’re going to scale that one buy, and then you’ll be able to overcome all of the costs of the nine tests that were not successful. 

Let’s do some math to prove this!

Let’s say your company has a $20,000 test budget. And you decide to test $2,000 to 10 different placements. 

If nine out of the ten fail, then you would have lost $18,000. 

But, it doesn’t mean zero revenue back. You could get half your money back, but it may not be profitable for you. 

If you generate only 500 leads (comparing to the 1000 leads we mentioned last time), that means you’ll generate 15 sales (remember the example of kitchen renovation company). In that case, you’ll earn $1,500 instead of $3,000 ($100 CPA). But you paid $2,000 for the test. So, you only lost $500. 

Let’s say you lost nine of the media buys in the same way. It means you lost $4,500. 

But, you’ll scale the media buy that works, and it will pay for all of those nine that you lost. 

If you test 10 placements a month and find one winner, you’ll have six winning placements six months from now, and you’ll be making serious money. 

Let alone building your database in the process. 

Because being able to control traffic is the most significant value.

If you generate 1,000 leads for each of those ten partners, you have 10,000 people in your database. For the time being, they only converted 3%. But you can send emails to those people again because they’ve permitted you to reach out to them. 

So you can try to get them later, or you can find other relevant offers that you can promote (not only kitchen renovation). 

You see – everything we’re doing here is designed for you to be profitable on the media buy. 

 

Fair Partnership

 

All this might sound a little confusing. There is a ton of numbers. 

But if you start plugging these numbers in, you’ll see it makes a lot of sense. 

All those CPMs, CPCs, and CPLs, are actually the same numbers. 

The only difference in buying on CPM, CPC, or CPL is in the partnership – who’s taking on more risk initially, you or your partner.

If you are buying and paying on a CPM, you are taking on more risk. If you’re going to pay them only when they generate a lead, the publisher is taking on more risk. 

CPC could be a middle ground – they’re mailing, and you’re not paying unless somebody clicks to see your landing page. And on your site, you don’t know if they’re going to sign up or not. So, you’re willing to pay for the click to get them there. 

The click basis usually makes the most sense because both sides take some risk. 

It’s a fair partnership – because, in any partnership, both sides need to win. If they don’t, it doesn’t work. 

But, in addition to the revenue, we also build our database. And that is the biggest value in this business, which allows you to control the traffic! And we said many times – if you own leads, you’ll solve all your money problems!

 

Analyze & Optimize

 

As you remember, last time, we went through six steps you need to take to succeed in the lead generation arbitrage business.

But there is the final one – step seven. After making all calculations and projections and completing the testing, you need to analyze the results. 

It means comparing the real numbers versus your projected numbers to answer just one simple question – Did it work?

You’ll rarely achieve the results that are better than you expected. More often, you’ll have to optimize – to put additional efforts to get a winning placement.

In that case, you need to tweak something – either the cost of the media needs to be less, or you have to get more clicks/leads, or you have to convert the sale higher… 

This way, you’ll determine if the arbitrage can work or not. 

And if there is no response and nothing can be improved – then kill it. It’s just not worth your time. 

I’ll leave here the summary of all the steps we went through during this brief course. Now, you can check if you need to repeat certain parts to understand everything completely.

Because once you get lead generation arbitrage, you’ll be able to earn real money. 

 

Summary

 

Step 1: Know Your Value Per Lead (RPL)

Step 2: Margin Goal?

Step 3: CPL Allowable Based on Step 1 & 2

Step 4: Learn Distribution > Find New Media Partners

Step 5: Model Potential Partners > Projected CPL

Step 6: Evaluate > Compare #’s > Decision Time

Step 7: Analyze & Optimize (Repeat Or Kill)

If you find value in this content, join me next week. 

If you haven’t understood something or have additional questions, shoot me a message on social media and let me know! I’ll be glad to help! 

If you’d like to get bonus Performance Marketer content, sign up for my SurveyDetective VIP waitlist!

🕵️‍♂️  Sign up for the SurveyDetective VIP Waitlist HERE

See you next week!

https://youtu.be/A8keHBuaJhc

Kraj bloga

 

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Transcript…

Read Full Transcript

Eric Beer 00:00

These companies may not even be used to seeing so much volume. They’ll be like, what are you doing? How are you doing that? Because you’re taking more risk, right? You’re putting your neck on the line. And if you put your neck on the line, you deserve to make more money. If you can generate more margins, then Bravo! Because you’re the one that’s making this all happen.

I spent the last 17 years building my eight-figure performance business without using any of my own money, working with some of the most brilliant direct response marketers in the world today. Now I’m looking for entrepreneurs to join my affiliate army built on ethics, transparency, and good old hard work. Join me to change the perception of how people view the greatest business in the world, affiliate marketing, and follow along as I learn, apply, and share performance marketing strategies, working with some of the brightest people on the planet. My name is Eric Beer, and welcome to the Performance Marketer Podcast.

You will fail more than you will succeed, I can guarantee you that, OK? When you’re testing media, most buys will not work. It’s just... it is what it is. And that’s the best thing about this business - you really could fail 90% of the time and have a massive business, right? So, like, if you have one winning media buy for every ten that you test, it’s huge because what happens is that one buy you’re going to scale. You’re going to be able to take that buy, and you’re going to be able to overcome all of the spends on those other nine tests to be in a place where you have a winning placement. And now you turn the dial-up, right? So, if you think about it, right, let’s say, you know, earlier, we said we had a $2,000 budget. You know, someone who is starting out, a newer, wouldn’t have this type of budget. But bigger companies like mine, we might have a $20,000 test budget. And we test $2,000 to 10 different placements, right? Well, if we do that, and nine out of the ten fail, well, then we would have lost $18,000, right? Well, that doesn’t mean that it’s zero, by the way, OK? When they don’t work, it doesn’t mean that you got zero revenue back, right? You could get half your money back, right? You may generate leads, and then you may only generate 500 leads versus 1000 that you generated earlier. And in that case, you’re going to generate 15 sales, right? And in that case, at the $100 CPA, right, instead of making $3,000, you make $1500. But you paid $2,000 for that. So, you only lost $500, right? You’re going to get money back in return from the advertiser for the sales you generate. It just may not be profitable for you, right? So, in that scenario, let’s say you did that, and you lost nine of the media buys - your loss is 500 bucks a piece, right? All right, well, you lost $4500. If all nine were like that - some may break even, right, some might bomb, just some may not hit your margin. Maybe, like, you make 10%. That’s not that as exciting for you, right? Things need to... you need to tweak something. Either the cost of the media needs to be less, you got to get more clicks, right, you got to get more leads, you had to convert the sale hire - all these moving parts will determine the arbitrage if it can work or not. But the thing is, is that that one media buy that works is going to pay for all of those nine that you lost, and then some so if you think about it over a six month period if you’re working with a partner, and each month, you test 10 placements, and you find one winner, by six months from now, you’d have six placements that are winning, that are awesome that convert sales for your, for your partner, you’re generating leads, and now you’re getting paid out on that sale, but you’re killing it. Now haven’t even got into the fact that you own those leads when you generate those leads, and you can now make money off of that data. But that’s, that’s true later day. All right. We’re not going to get into that right now. But bottom line is, the biggest value is you controlling traffic, right? And when you do that you’re generating leads, if you generate 1000 leads for each of those partners. If you tested 10 partners 1000 leads now you have 10,000 people in your database that signed up interested in kitchen renovation. Now, they only converted 3%. But that doesn’t mean you can’t remark it to those people, right? Yeah, you can send emails to them. You can reach out to them. They’ve opted in, they’ve given you permission to reach out to them. And you can try to get them at a later date. And even when they’re ready to show interest in renovating their kitchen, or perhaps there’s something else and that’s where you can find other relevant offers that you can promote. So, you can monetize that list. Right? If you can make $1 per record on 10,000 leads that’s $10,000 a month 50 cents you make five grand a month, let’s say in six months from now if you do that right and you do the one wins out of the 10 you Generate 10,000 leads a month times six, right now you have 60,000 leads, if you’re making 50 cents, for every record, you’re making $30,000 a month on that data internally. And that’s, that’s just hitting the bottom line. That’s ancillary revenue, that’s extra net profit. Because everything we’re doing here is is ultimately designed for you to be profitable on the media buy, right. So, that’s why like, later on once you can figure out what the value is on the back end, if you can monetize the data, that’s where if you’re doing things like this, where you’re arbitrage in leads, you may not even have to be profitable her to be worth your while, because you’re building your database up and you’re able to monetize that data at the backend. OK. Make sense? It’s a whole different story there. So, I’m trying to explain to you guys, there’s, there’s tons of upside here, there’s a lot of opportunity.
So, step seven, here is we want to analyze, and we want to optimize so often what that means is we want to have the ability to look at it and say, Did it work? Are we going to do it again, or did it back out? Right, we’re either going to optimize it, or we’re going to kill it, right? optimizing it means we’re ultimately going to scale this business, we might change, some creatives might do some things here, or we’re going to kill it, it’s not worth it, it just was so off. And it’s not worth it, there was no response whatsoever. It didn’t work, it’s not worth our time. So, well summary here to go over this. And I know this was long, but this is guys, this is very valuable.
I’m giving you a business model to start a lead gen business, my SurveyDetective platform will literally help you be able to generate leads that you can sell to partners using this model, this lead gen arbitrage model of taking my platform, creating survey, segmenting the data, getting interest, finding people that want to sign up and find out about more information about kitchen renovation, and then you sell those leads to the kitchen renovation company, right? And you’re doing it all through SurveyDetective, I’m literally giving you everything, right, it’s there’s going to be jobs being created businesses being created off of SurveyDetective, people that need leads, like the advertisers, the coaches, the consulting agencies, will be able to use my platform, right? But they’ll be flooded with come in, at don’t have any of that, that can come in and just start their own businesses with my platform and build huge businesses, right? There’s gonna be people that are gonna come in, that are the coaches, the consultant agencies the evidence, and they don’t want to go and build the service they want somebody else to do it can be somebody that’s inside, who knows how to use my service, attack the platform, right? That’s why we’re going to certify people to be SurveyDetective, right? Once you stamp that you’re a SurveyDetective means you know what you’re doing, you know, everything that I know, and anybody that sees that stamp should feel comfortable that you know what you’re doing, right? Because you’re past everything that I’ve taught you on how to use this platform to generate leads.
Just to go over this simple lead gen arbitrage summary is number one, you want to learn and understand what your revenue per lead is on the offer that you’re looking to arbitrage, you want to then determine number two, what margin goal you want to work on, so that you can then figure out what your cost per lead allowable is to go out and buy media. Then once you have those numbers, you know your revenue per lead, you know what the margins are, you know what your cost per allowable is, you got to go out and test you got to go out and find new media partners, you want to find new media partners that are similar to the numbers you just modeled off of the tests that you performed, so that you can now figure out if this is gonna work, right? So, when you’re finding these partners, you want understand how are they charging you to get traffic, right? You want to figure out what the CPL is that you’re going to be paying them. So, if they’re willing to get paid on a CPL, then great, then you don’t have to worry about stuff of converting it from a CPM, or CPC. But there’s a lot of good media out there, then they won’t run on a on a CP O, if you want to go out and buy media on Facebook, or Google or Bing, or some native platform, let you buy them on a CPL, you got to buy it on a CPM CPC. So, you got to work your way backwards to figure this part out. You got to figure out what the CPL is to you, based on what you’re making. So, once you do that, Step six, as you evaluate, you want to compare your numbers to make a decision if you want to move forward or not. If the answer is yes, then you actually look and analyze the real numbers versus your projected numbers to determine Is this something that you can scale if it worked, is it something that is close worked, OK, but you can optimize and willing to work harder to make that work or is it so bad that you need to kill it? So, those are the seven steps in this lead gen arbitrage model that you would follow to determine If this is a business for you, if you can do this.
And anybody can do it, I’m telling you, anybody could do it. Yes, it might sound a little confusing a lot of numbers. But if you start plugging these numbers in, you’ll see it makes a lot of sense. And it’s, it’s really a beautiful business. Right? You know, I’ll tell you right now, just as a bonus of how this would work. Yes, you buying a CPL? But we talked about this, right? From a CPM perspective, we just did it. Right? The partner, one of the charges, $2 1000. So, we took the million emails, we knew we were making $3,000. So, our revenue per 1000, right? So, how do you figure that out? You look at what’s the total revenue and you divide it, right? You take the 1 million, divide that by 1000, multiply that 1000 times 3000, right? That’s medium math, works out the thralls 1000. So, you’d be paying $2 1000, you’re making $3 1000. It works, right? If you want to buy in a CPC, if someone’s like, Hey, you can only pay me on a click. Well, you got to figure out like we just did earlier with CPM, what are you making on every click that is generated? And I went through that number for us earlier. And we got 5000 clicks, right? Remember, we got 5000 clicks in that email. And of those 5000 clicks, we’re generating about 60 cents for that click right? Who making 3000 bucks. So, you take $3,000 divided by the 5000, you get 60 cents on that click. So, the cost per click, what are we paying, you take whatever you are paying the $2,000 divided by the 5000 clicks, and you got 40 cents, CPC, right? So, you’re able to afford 40 cents CPC for mailer. Now paying on a CPM and CPC. It’s really it’s the same thing. Same exact numbers, right, you’re making 20 cents net on a CPC making $3 to the $2, CPM shipping $1 on a revenue per 1000. on a on a on a CPM, we’re making $1. On the CPC, you’re making 20 cents on the CPL, you’re making $1. They’re all the same numbers, really all the things, the only difference is in the partnership that you have with your media partner, who’s taking on more risk in the beginning.
That’s it, if you are buying and paying on a CPM, you are taking on more risk, if you’re going to pay them only when they generate a lead, then the Publisher’s taking more risk, because you’re only paying them when you generate a lead, right. So, a middle could be a CPC, right? So, they’re mailing and you’re not paying unless somebody clicks to see your landing page, right. And on your site, you don’t know if they’re going to sign up or not. So, you’re willing to pay for the click to get them there. And that seems like always like a fair comparison. So, so the click basis usually is like the the middle ground that makes the most sense. And both sides are taking some sort of risk. It’s fair partnership, right? Because in any partnership, both parties need to win. If, if both parties aren’t winning, it doesn’t work, right. And we know on lead gen, how the three people that need to win. Number one, the consumer, it needs to make sense for the consumer, we need to bring value to the consumer, right? They need to be happy with what they’re what they’re doing, we’re getting them something that there’s in this case, they want to renovate their kitchen, right? So, if they find a good deal, turn it into a kitchen, we help them, right. If we were profitable doing that, now, we’re happy, the advertiser, now sold to person and now they have a new customer, they’re happy, the person that’s selling us the media, or paying them what they want, they’re happy, choose for people in this in this scenario that’s for, right, the media partner, us, the advertiser, and the consumer says for the right, consumer needs to be happy about buying it, the advertiser got a new customer, we’re able to arbitrage this and make money and be profitable. And the affiliate partner is making money on the spend that we’re we’re doing with them. And for us, we also just build our database, biggest value of all of them. Bottom line is biggest value that is going to allow us to build the business into a much bigger entity by owning the data. Huge, huge, huge.
Yeah, man. It’s pretty exciting. That’s it - lead gen arbitrage, ABC 123. I know this was long. I hope it was helpful. I’m telling you, I could sell this as a course for thousands and thousands and thousands of dollars. Should you be able to get it on day one? I don’t expect you to. No. If you do - Bravo! You’re awesome! It takes a long time. This is me doing this for 20+ years, right? It’s taken me a long time to do this. But if you’re willing to sit here and try to learn this, it’s powerful, guys! Like, once you understand this, you’ll never be out of work ever again. Unless you don’t want to do it, or you’re just not in the mood to do it. But you can build a business off of lead gen, on any day of the week… on any offer, right? Whether they want to pay you on a lead or sale - that’s it, right? And if you’re going to people that are paying on a sale, and you’re able now to go out and scale it by generating more leads, these companies may not even be used to seeing so much volume. They’ll be like, what are you doing? How are you doing that? Because you’re taking more risk, right? You’re putting your neck on the line. And if you put your neck on the line, you deserve to make more money. If you can generate more margins, then Bravo! Because you’re the one that’s making this all happen. So, I hope this was helpful. I know people in my community have been asking me to do this. So, I promised I would. And I know that it’s extensive. But the people that get this will be killing it one day - killing! So, go back over this, take out a notebook, listen to it, watch it, take notes, watch it very slowly, get a piece, pause it, write it down, write your notes, start it again. Write down step two, right? Until you understand it. If you don’t understand it, ask me, reach out to me. All right, you can join my text community at 917-636-1998. Shoot me a text. You’ll get opted into my text community, where you can communicate directly with me, which a lot of people do. And I try to answer as many as I can. Certainly weekly, I try to get to it as much as I can on a daily basis. I can’t answer all of them because there’s a lot, but I do the best I can. But I do try to respond. This today was done because people were asking me inside the text community. So, I figured rather than going back to each one individually, I would do this. So, I’ve answered. I’ve answered your prayers. Whoever you know who you are out there that asked for this. You could obviously follow me on Instagram. But subscribe to the podcast. Subscribe to my YouTube channel. Share this with anybody you think that it might be helpful for. And yeah, say hi to me, man. I love to hear from people, love to hear your thoughts. You have any comments, comment below. Let me know what you’re thinking. And I appreciate you all. I appreciate you being here. Appreciate you listening to me. I hope this was helpful but changed somebody’s life today. One person, I did it for one person - that’s meaningful for me. And that’s all that matters right now. So, with that said, I appreciate you all. Performance marketers, you guys rock. Thankful for all of you. Be well, be blessed, and have a good day.

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