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Some Pay Per Lead Niches To Avoid At All Costs

I’ve been running Flexxable for just over a year now, and we have a free Pay Per Lead group on Facebook called the Pay Per Lead ninjas. 

If you haven’t seen the latter, check out Facebook ASAP. They’re a great community to be part of, and I’ve seen so many fresh ideas. 

One question I get asked in both groups is: “What are the best Pay Per Lead niches to go into?”. 

It’s a great question, but nobody talks about the Pay Per Lead niches you need to AVOID. What can look like a great partnership on paper can go south before you know it. This can be due to business constraints, financial constraints or both. 

In this video, I’ll talk about what Pay Per Lead niches to avoid and why. 

(With a quick run-down of each below).  

Pay Per Lead Niches To Avoid Due To Business Constraints 

1. Local Businesses 

By local businesses, I mean: 

  • Dentists 
  • Gyms
  • Estate agents 
  • Plastic surgeons 

When it comes to finding your Pay Per Lead niche, this has got nothing to do with how useful these businesses are, but by how far they can scale. 

A local business is constrained to taking customers from its immediate area. No one will travel 50 miles to see a dentist, no matter how good they are. 

That leaves you with a target audience of around 200,000 people or less. 

Can you see why this isn’t a good Pay Per Lead niche? The first few weeks you’ll get great results… but then you’ll realise that your target audience has dried up. 

You can change your creative often and take in a slow trickle of leads month by month. This works well on a retainer contract when you’re generating leads for a fixed fee. 

However, the Pay Per Lead model means getting paid on quality and quantity. If you have 100 leads one week and only 20 leads the next, you’ll see your ROI start to suffer. 

 

2. “Mom and Pop” Businesses

Again, this isn’t a comment on how good the product or service is! 

If a business is a one or two-man band, chances are they’re going to be working any leads they get themselves. 

Along with all the other responsibilities that go hand-in-hand with running a business, do you think they’ll be able to handle 100 leads a week? 

If they have a small call centre, it’s also unlikely that they’ll be able to handle a large volume of leads. I have first-hand experience of this, as I own a small call centre myself. I have to turn on and off the leads when my staff get overwhelmed by calls. 

If the call centre can’t respond to leads within 20 or 30 minutes, then they’ll go cold. That lead is now basically useless – especially for non-search leads from Facebook, Twitter, Gemini and Taboola. 

And the “mom and pop” business will blame you and the lead quality

If they don’t have a follow-up system, like email automation or text message marketing, that could prove even more difficult for you – and them. If the client doesn’t get the return on investment they were hoping for, neither will you. 

If you think you can help them set up email automation and text message marketing, ask yourselves these questions first: 

What are your time costs? 

What are your stress costs? 

Would it be a quick fix, or would you save time and make more money providing to another client? 

Saying “no” to someone isn’t the mark of a bad agency owner. 

 

3. Business Owners with a God Complex. 

You’ve definitely met one before – that business owner who thinks he knows absolutely everything. 

They’ll stick their nose into your funnels, tell you what type of ad copy works, and fight you tooth and nail if they think you’re wrong. 

I’ll tell you now: these people are not good to work with. They’re rude, frustrating, and will always insist they’re right, even if the evidence points otherwise. 

In any Pay Per Lead niche, if you get bad vibes from a potential client, just say no. It’s not worth the hassle. 

 

Pay Per Lead Niches To Avoid Due To Financial Constraints 

1. Any Industry Where An Average Order Value Is Less than $1000 

Roughly. You can go down to $750, but $1000 tends to be the point where there isn’t much of a profit margin. 

If you’re supplying 100 leads to a client for $50 a lead, that’s $5000 for you. But what if the client only manages to convert 10% of those leads? 

At $1000 per conversion, the total a client will make is $10,000. Minus your $5000, and that leaves them with $5000. 

50/50 split, right? What’s wrong with that? 

Well, it’s not a good Pay Per Lead niche because the client still has to pay for their overheads like their office, insurance, sales team, any yearly bonuses, and so on. 

If the margin is too thin, it’ll be impossible for you to scale.  

 

2. E-commerce Businesses 

I’ve never tried e-commerce leads, but I don’t think they’d work at scale. 

If a client’s product is particularly expensive, it could take months before a customer is convinced enough to make the commitment and buy. 

Say, going back to our favourite example, that you’ve delivered 100 leads to your e-commerce client. They manage to convert 10% of those leads almost straight away, but another 10% takes almost six months to convert. 

That means the client will be struggling financially for almost half a year. If they manage to keep going, they must have deep pockets or some really good investors. However, I can guarantee they won’t be able to scale with you, not if the business is that slow. 

 

3. Clients That Insist On Back-End Payments 

Not exactly Pay Per Lead niche-specific, but sound advice nonetheless. 

Some clients will insist on back-end payments all the time. They don’t want to invest themselves, so they want you to put your money and time on the line. 

If they don’t get any conversions? That’s fine because all the leads were free. 

And, because there’s no risk for them, they’ll have a laid-back attitude when it comes to closing your leads. They’ve got a business to run, salespeople to train, content to write, and the list goes on. 

Leads can end up sitting for days and will go cold. When the back-end client finally gets round to following up on those leads, they’ll blame the lack of conversions on your lead quality. 

Try and convince clients in any Pay Per Lead niche to take a front-end or hybrid deal. Clients who insist on the back-end usually aren’t prepared to put their money where their mouth is and make an investment.

 

Free Training 

Flexx Digital is a PPC agency that uses the Pay Per Lead model – no retainer contracts. 

If you want to find out more about this Pay Per Lead model, and how we run the business, check out my free case study.

Inside you’ll find how I:

  • Severed ties with retainer contracts once and for all
  • Moved away from local businesses
  • Started working with national B2C companies
  • Land high-ticket clients
  • Found the verticals we work in
  • Consistently generate leads of the highest quality

Still unsure? Read Matthew Tenney’s and Graham Cox’s testimonials today. 

Click below to watch it now:

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