Issue #46: The PPL business model stinks

🥅 Agency Tip: STOP charging per lead.
Do not, I repeat, do not charge per lead.
Sure charging per lead sounds like an easy pitch AND clients love this kind of guarantee. But the fact of the matter is, your agency’s growth is going to stall or potentially go in the opposite direction if you stay in this model.
Things might look good to start, you’ve got a few clients paying you cash per lead but what happens when you need to expand to new channels to boost volume or quality?
Answer: Your costs to deliver goes up and you start losing money.
Let’s do the math:
You sell leads to a company at $15/lead in bundles of 20 leads per week.
That gets you roughly 80 leads per month or $1,200/month/client.
If you have 10 clients, you’re clearing $12,000/month so ~$144k/year top line.
That’s not factoring in your cost per lead, but in the case of most PPL companies they’ll be working on networks that have the lowest possible CPL, which translates to much lower quality.
If you’re going to grow your agency, you’ll need to keep your clients happy with volume and quality. Which means you’ll have to expand to new channels, which can prove costly.
Instead of charging per lead, charge per service offered and factor in your costs while setting this price point.
This will level up the kinds of clients you get and give you more flexibility to deliver results.
📚 Event Invite: Agency Growth Book Launch
Over the last 12 months, we’ve been dedicated to creating more agency growth content and finding partners with the same mission. That’s why we wanted to literally write the book on agency growth.
Join us and 12 other agency growth experts on Thursday to set yourself up for spike growth in 2023.
Just some of the topics include:
  • Profitably acquiring new business
  • Preparing for the recession (and what that means to your agency)
  • Integrating AI into your Agency
  • How to plan for an exit (most of you are closer than you think)
Sound good? You can register for the event here.
Talk to you next week,
CEO & Chief Wizard