EF Staff

October 10, 2016

We have a special post today. One of my good friends, Mark Luckenbaugh, has decided to share his story of selling a local lead generation (lead gen) site with us. Local lead gen is a huge, lucrative market. If you’re unfamiliar with the space, it is basically websites or marketing funnels designed to send local leads to local businesses.

In this example, Mark talks about a site he sold for $30,000 in the dental lead gen space.

Mark is the owner of the popular SEO training site Local Client Takeover. He also owns a seven-figure marketing agency and another six-figure marketing agency targeting two different local professional niches.

Without further ado… take it away, Mark!

Hey Flippers!

I will keep the intro short and sweet because you guys want the meat and potatoes. Today, I’m going to show you another strategy you can use to generate revenue in the world of digital business and site acquisition.

My name is Mark. I own, build, and grow businesses across several industries. Some of you may know me from Local Client Takeover, a free coaching community with upper echelon courses for the more experienced local marketers. We are more than 7,000 members strong with over 300 training videos between our free and paid archives.

I own two client-facing agencies, one doing seven figures per year and the other doing six. I have also been aggressively monetizing local lead gen sites for quite some time and have recently been tackling affiliate opportunities.

As of late, I have been buying or negotiating equity in companies and using my digital marketing expertise to grow them. This has become a passion of mine. I love learning about new products and industries and presenting myself with new challenges.

I’m passionate about creating and utilizing strategies to make money in the local stratosphere, which oftentimes involves moving outside of the typical client-facing activities, even though, admittedly, client-facing strategies make up 70%+ of my income.

One way that I diversified was to actually sell websites.

Why I Love the Strategy of Selling Sites

Client work can be a nightmare.

Basically, you spend money to acquire a client, invest in the onboarding process and setup work, and then have ongoing expenses to manage the client, and so on. These investments do not include the money you spend each month to actually perform the service.

The growth and sustainability of your income depends not only on client acquisition but also on retention. If you sign someone up for a package at $2,000/month, but they only stay on for six months, that is $12,000 gross minus operating costs.

Not that impressive.

When you sell a site, it is easy to bill them for actually building it, plus X number of months, en masse. The one particular lead gen site I will talk about selling today was focused on a small suburb, and it would have been difficult to charge more than $2,000 per month for SEO exclusively.

I go over some pricing specifics in this post, and also share my client SEO pricing matrix. A quick perusal of this post will justify the statement that there is a ceiling on what we can potentially charge.

The likeliness of a client staying on board for 15 months is slim when the results are delivered within three to six months. Plus, in a client situation you are paying an employee (an account manager) to interact with the business owner. Once campaign goals are met, you will be expected to provide additional value lest they cancel.

This will cost money and cut into margins.

I love client work, but being able to eliminate reporting and management while also guaranteeing larger customer lifetime value is a win all the way around. There are also less components with this type of purchase or sale compared to the complexity that can come with typical business evaluation.

I will now walk you through that process, and, hopefully, some of you will take action and recreate my success with this strategy. Let’s begin.

Picking Your Poison — How to Recreate My Process

There are a ton of guides in this industry when it comes to selecting a niche. I am not going to make a definitive guide on this topic, but I will add some pointers for selecting a niche and city to move forward with. I chose to go with the dentistry niche, and hopefully after checking out some of the justifications below, you will understand why.

Lifetime Value Justified

Make sure the customer lifetime value is high enough to justify the acquisition of a site that is generating qualified leads. There are a lot of customer lifetime value calculators on the web and finding this data is not overly difficult.

Dig Deeper

Dig deeper into a broad niche and see how else you can provide value to a potential buyer. In my case, the dentist wanted new patients of any kind, but I was also delivering leads for cosmetic dentistry terms — something that grosses him a lot more money than cleanings.

Almost every niche has these hidden gems. Find them and dig deep to make your website even more valuable.

Another good niche example is flatwork concrete, which might cost a consumer $3-5/sq.ft. This is the lifeblood of their business for a lot of concrete contractors, so they will definitely accept the leads. However, if we deliver them jobs for colored and stamped concrete or decorative projects in general, the price tag can easily soar to $15-25/sq.ft.

Adding that extra value will exponentially increase the worth of the website.

Go to Where Your Network Already Is

Tackle an industry in which you have contacts or in which you are comfortable selling. If you have already been networking with business owners, then make your life easier by going after someone you can easily get in contact with to make the sale.

I have a large network in the dental space, so I knew creating a property there would do well.

Choose a City with Good Search Volume

Choose a good sized city, where the volume of potential customers that can be attributed to the site you want to sell is impressive enough to warrant the interest of business owners in your market.

If you are not comfortable generating leads in top cities, then at least choose a city that has a respectable search volume.

Local Site Selling

Notice that the SPM (searches per month) here are perfect. This is targeting Washington DC, which is not a large city by any means, but as you can see, there is enough interest to tell me we could generate some high-quality leads in that area.

Of course, a site in LA will be worth much more money, but the competition will be fierce.

building websites

Choose wisely.

Choose the Right Business Owner to Target

Target the right business owners for an acquisition. This can be tedious and may require some trial and error, but getting this right means you get more money. Simple as that. You can attempt to qualify leads using resources like InfoUSA, where you can sort by a ton of demographics.

Also, consider attempting to qualify based on psychographics where at all possible. Psychographics are behaviors and attitudes, some of the most powerful targeting tools that we have. Someone fresh out of college looking to get their start in a practice will not be the best person to approach with this type of proposal.

A $25-million-dollar construction company that has just bought a competitor and expanded its fleet might have an interest in creating a large spike in their business quickly. A great demographic to look at when selecting a company like this as a potential client is its $25 million worth, but their recent purchase of another company also indicates that they are looking for more customers.

Looking at behaviors like this can help you sort prospects based on their probable interest in growing their customer base.

Let’s shift gears and look at a case study. Most of the steps and concepts discussed in the following sections are not too difficult, but, if something eludes you, try a Google search. If you are stuck, just drop a comment, and I will be happy to help.

The First Steps to Selling a Local Site for $30,000

I actually had my prospect in mind before I ever even conceptualized the process of building and selling a website. A mutual friend told me he had just shelled out $3,000 for a domain name.

It was a partial match domain like bestdentistsuburb.com.

Nothing even that special, but it did happen to get the gears turning. He bought the domain based on some outdated SEO article stating that all you have to do is have the keyword in your domain name, and you will rank.

Based on these psychographics, I knew he would be a prime candidate for high-ticket items. So here’s what I did.

Conceptualize the Sale

I conceptualized the sale and created a small bucket of prospective interested parties to whom I could sell this website in the near future. This basically means I worked out how the sale would look on paper. I wanted to ensure I had the Unique Selling Proposition (USP) to encourage a sale, rather than sign another client.

I wanted to make sure that when I gave this presentation, it all made good sense. Conceptualizing the sale is pretty much just taking all of the research we gathered earlier and ensuring that it all makes sense for you and the business owner.

Registering a Partial Match Domain

Next, I registered a partial match domain. The business owner already saw the value in this domain setup, so I figured getting the site hosted would be a good strategy to start with. I love Liquid Web for hosting high traffic sites. I loathe EIG but any other shared hosting (such as HostGator, Bluehost, etc.) will usually work fine for these type of sites, at least initially.

Set up Email & Call Tracking

You can use something like Twilio, but it’s not for you unless you have some technical experience. Something simpler like Call Rail or Call Fire can work great. This allows you to get a geo-targeted phone number that you otherwise would not have and allows you to track calls forwarded through that number and record them.

Showcasing the number of leads the site generates makes it easy to extrapolate the potential sales for the business and prove the worth of the site. By being able to review the data, a business owner is going to see the value in the potential new business.

A site generating less phone calls and emails will not be as easy to sell. The best sale prospects appear when it’s clear that the product is going to directly improve the business’s bottom line.

Set up an email on the domain (info@domain.com) and forward all contact form submissions to them. You can then set that email up to forward to whatever other emails you wish or carbon copy it to notify whomever you wish.

The main point is to be able to quantify the amount of business the site will essentially be sending the purchasing party.

Build the Website

I know what everyone is thinking… “I am not a developer! I cannot do this!”

Good news! Neither am I.

I grabbed a WordPress theme from Themeforest and had an employee set it up.

It takes less than 60 minutes to go from registering the domain, hosting the site, installing WordPress, and adding the theme. You might burn some time waiting for the hosting to propagate but not much in terms of billable hours.

Content

I use low quality and duplicate content to get sites launched, unless they are already client-owned properties. I keep the launch of a project lean until it starts to become a proven concept (in this case, until the rankings start knocking on the door of page one and two).

I brought in-house writers once the pages start performing better. The content on the entire site wass redone, and we performed some very light CRO (conversion rate optimization) in an attempt to improve the number of calls and emails the business receives.

If you want to go for beautiful content right from the get go, then you can definitely hire competitively priced writers from places like Hire Writers or IWriter.

Keep in mind that if something doesn’t suit your quality expectations, you can reject the content and have them or someone else rewrite it.

Content writers are not a commodity. You do not need to accept lackluster work.

Ranking the Beast

You do not need organic traffic to create a site that can be sold. I am sure most of you know this. SEO happens to be one of my business’s core competencies, so we ranked the website and created value using that vehicle. However, you can use any vehicle, such as Facebook ads, to drive traffic for these kinds of sites.

I took up enough of your time talking about narrowing down your market, so there’s no need to get into advice on ranking.

Clever site sellers who do not want to touch SEO are probably already thinking about extrapolating this strategy outside the realms of organic traffic and how they can leverage their core competency to make some money selling local assets.

If you want to learn more about SEO, there are a ton of guides out there for free. Local Client Takeover, one of my companies, offers a ton of free value when it comes to anything digital. Sorry for the shameless self plug, but you can check us out on Facebook or get the free SEO training from the main site.

If you do not want to even touch the SEO stuff yourself, there are a ton of white label providers that can help you with various aspects of an SEO campaign.

Web2.0 Ranker offers a lot of a la carte services that can help push rankings, and gives great quality for the price. The cool thing is you can actually call the office and speak to someone specifically about your needs. Very few vendors offer that level of upfront support.

If you want to work directly with an agency that also offers white label, then consider First Rank. Jacob, the owner, is a long time friend and great at SEO. I can attest to the results he provides as we have worked together in the past.

There are plenty more out there but those two can get you started.

Keep in mind that the rankings are not what drives the value of the sites; rather, it is the leads generated that directly impact the bottom line of the purchasing business.

Use your imagination if you do not want to go the SEO route, and have some fun building a profit-generating machine.

Selling the Site and Cashing Out

I had a few cool sales tactics at play here. I wanted to get as much money from my buyer as possible, without having him to pay 30 months worth of SEO at $1,000 per a month. That just would not have made sense for him.

Thus, I pitched the deal this way:

  1. Domain, hosting, and website build — originally $10,000, discounted to $6,000 when I pitched the product
  2. SEO services — originally $2,400/month

Keep two things in mind. While I probably could not have gotten them to sign for $2,400 per month, I wanted to frame the deal properly so it looked like they were getting a steal, so I floated an easy number for them.

When I pitched to the dentist, his consultant, and his in-house office manager, I told them that, without ongoing maintenance, rankings were not guaranteed to stick, which is very true. I also said that if he decided to acquire the entire site, a handful of dental implant clients throughout the year would not only cover the initial investment but also see a positive ROI for the entire deal.

Knowing the dental industry, I also reminded them of the customer lifetime value of each dental patient that the site would bring through the door. Fifteen new patients over the course of a year, regardless of their initial transaction, would also be enough to make the investment lucrative for the business owner.

My final phase of the pitch was their up-front payment for the domain, site, and hosting as well as 10 months of the SEO, which would allow them to own the property free and clear. I also promised them six months of premium support and ensured them if rankings fell, we would work together to bring those back.

The deal was facilitated, and a $30,000 check was cut.

If you guys want some more information on deal facilitation and selling in general, I would recommend checking out The Ultimate Sales Machine by the late, great Chet Holmes. I use a lot of his strategies in higher end deal construction.

Final Thoughts and Celebrations

This is not a model that every business owner will move forward with. Your phone is not going to be ringing off the hook with people ready to line up and hand over $30k checks.

However, building sites like these could make for a gold mine when you sell them on Empire Flippers.

Keep an open mind, and do not be afraid to modify the strategy. Heck, you can ditch the strategy all together and move forward with a similar model inspired by this concept. I just wanted to take some time to show you guys a different side of site selling and encourage you to diversify and conquer.


Make a living buying and selling websites
Sign up now to get our best tips, strategies, and case studies
Discussion
Leave a comment
  1. Marcelo says:

    I love this strategy and this is a great article , I’m in the same space and just wondering what are the best verticals for local lead generation I know a few but need more ideas. By the way is this the Aussie site that you sold? p*****-fencing.

    • Greg Elfrink says:

      Hey Marcelo!

      Glad to hear you love this strategy.

      One of the best ways to decide on the industry is to see if they sell high ticket items. For example, cosmetic dental services can cost a lot of money, and can be very profitable for the owner of that business. Therefore, they would be more willing to pay a larger marketing fee to get those leads.

      There are hundreds of different industries like this. Here are a few ideas to get you started:

      Limo services
      Crane rentals
      Plastic surgery
      Plumbing services
      Architect firms
      Driveway repair / installation
      Septic tank services

  2. carl says:

    Interesting article, I have a few questions?

    Is it a directory type site, listing all the local businesses, or just a content site?
    If content, what is the sort of content you are using (site structure/content length)?
    Do you mention businesses in the local area by name?
    How are you competeing with Google local results?
    How many pages on average would you add to this type of site?

    Thanks
    Carl

  3. Josh Bruce says:

    Hi Mark. Love the flippers website. Recently took the plunge from client SEO into affiliate so will definitely be looking utilise this in the future. Whilst I think flippers is perfect for selling businesses/lead gen/affiliate websites, do you offer anything for selling contracts with individual clients? In the past I’ve sold clients’ contracts through this company which worked really well. But do you do that also?

    Cheers,
    Josh

Leave a Reply

Your email address will not be published. Required fields are marked *

Have a site to sell?

Click here to find out how much your website is worth

Sell Your Site