Why cost per lead won’t work in Local Affiliate Marketing

This is a guest post by Dennis Yu, CEO of BlitzLocal, a company specializing in local Internet marketing.

Affiliates are used to being paid per lead, so why not the same in local? After all, it’s less risk to the small business owner, and it’s the model we’re familiar with. Here’s why it sucks– and if any of you have real experience managing local clients, I’d love to hear your thoughts:

• It creates an incentive to argue over what leads count: If you’re doing cost per call, you’ll range between $20 and $100 per call depending on the category and geography. If you’re a Denver liposuction surgeon, maybe it’s $50 a call– a Boulder massage therapist might be $30, and a New York securities lawyer could be $200. Perhaps 2/3rds of these calls is from people who are not good leads– rescheduling appointments, folks who are not really interested, or even other competitors. The small business owner will not want to pay for those leads and you get into nickels and dimes.
• It draws the wrong type of client: Typically, it draws folks who don’t have any money– the needy clients that Brandon Hoffman likes to talk about. The catch-22 of marketing is that it takes money to make money and a lot of desperate folks who deserve to go out of business will be hoping you can save them. Run in the other direction when they come– not worth the headache, as they’ll nickel and dime you.
• It’s not your fault if they don’t convert: If the client doesn’t answer the phone, why should you have to eat the cost of the clicks? Clearly, the small business owner wants to pay for results, but there should be sharing of the risk.

There’s a lot of hype and little experience about local affiliate marketing– I’d appreciate hearing from folks who are actually doing it– let’s share our experiences!

1. Dennis Yu says:

   October 13, 2009 at 2:49 AM

   Ricky,

   Thanks for the guest post. Happy to return the favor on my blog– let’s spread the word on how to do LOCAL right!
2. Ricky says:

   October 13, 2009 at 2:59 AM

   Hey Dennis, thanks a lot for the great feedback. Look forward to working with you.