The Huge Opportunity With Local (Affiliate) Marketing

This was originally the 4th volume of the ShoeMoney Newsletter.  I had some deliverability issues (aweber go figure) and had so many requests to resend that I thought I would just post it here (with some enhancements).

Everyday people ask me how they can make money online.  In the past whenever I have found something lucrative, I have written a step-by-step guide on how to make money with it. The down side to having a massive reach, however, is that as soon as I write about something it becomes massively saturated. Right now, companies are tightening up their budgets.  Some of you may be out of work right now and trying to make ends meet.  Look on the bright side. Performance-based marketing thrives in this economy and right now, this is a great opportunity for you to take advantage of it. This following guide will show you how to setup local affiliate marketing, or commission sales deals. I’ll also give you real-life examples so you can see exactly how it works.

Getting Setup With Local Affiliate Marketing

Getting setup with local affiliate marketing is not easy, but once you get it down it’s like shooting fish in a barrel.  There are many different businesses that are great to market but the higher-end businesses include Lasik Eye Surgeons, Plastic Surgeons, Dentists, Car Dealerships and the list goes on.  Most local companies not only have no affiliate program but they will not understand the value of your efforts.

The best way to get their attention is to lay it flat our for them. Tell them you’ll charge them nothing for the first month and see what happens.  (This method has not failed us yet.) We know what we bring to the table and we know that after one month of new business they will see a HUGE value to it (or be scared to death we start to work with their competitors).   It would be pretty silly for the business owner to not take advantage of this opportunity.

Determining The Goal

Most of these companies have already done research about their demographics and what a new client, buyer or phone call is worth to them.  Obviously the number one goal of these companies is to make more money. However, you need to ask them a lot of questions to help develop the best target market for them.  I am going to use a local dentist as my example throughout this guide.

The local dentist I worked with explained to me that his goal was to get more clients.  I asked him more questions like if he knew any demographics or more information of that sort.  He revealed to me that he had done a lot of demographic research and knew that women age 30 to 45 schedule appointments for the whole family.  Boo-yah! Now we are talking.  So I pressed him to find out more information about the demographics’ interests. He already knew the answer. It was teeth whitening. I asked him what his markup on that was and he said that it cost them virtually nothing other than labor to perform this “teeth whitening” service (which they normally charge $600).  Now we know our target but how much is it worth to them?  I asked him if they have ever done metrics on what a new customer is worth versus a returning customer. That’s when he told me that a new customer to them is valued at over $250.  Boom!

Tracking The Leads & Determining Value Per Lead

Once you are ready to enter into an agreement with the local business, you’ll need to break down your compensation per lead.  You will probably be surprised to learn that most of these established local businesses have already done in-depth research analysis.  When we were working with one of the bigger car dealerships out of Omaha, Nebraska, they told us they knew every time their phone rang it was worth $14 to them.

Depending on your trust level with them, there are several ways for you to get paid by sending Internet leads to local businesses. One thing I have always learned is that greedy people will never settle for just a little bit of greed.  If they are cheating you, eventually it will be so blatant that it’s time to move on to their competitor at which time you are MUCH better positioned because you are kicking ass in the space.

  1. You can just direct people to call a special number. – Most companies have a dedicated person or team of people who answer the phone.  Their job is conversion.  It’s all they do.  They have been doing this for years and they are much more knowledgeable about the products and services their business offers than you are.  They usually work on commission and this is all they do; they convert interested people into buyers.  The value to them is getting the phone to ring period. Car dealerships are perfect for this.  Above as we talked about, the car dealership determined that every time the phone rang it was worth $14.  I proposed a $10 per call rate and that is what we agreed upon.  In 2007 we averaged 4712 calls per month, which meant $47,120.00/month for us.  Our costs were about $6,000.00 per month in pay-per-click expenses and labor. That means a profit for us of about $1320.00/day (or roughly $41,000.00 per month). And with this one client, we spent less than 2 to 3 total hours per week running everything. They were so happy with the results in 2007 that in 2008 they cut their print media, radio, and TV budgets by 80% and gave us a much higher payout. They even offered to reimburse us to try some other online marketing tactics.
  2. Set up a special code that receptionists will ask for in order to take advantage of the deals. – In this instance, the local dentist I am working with does not have a team of sales people but instead has a receptionist who books the appointments.  She does not work on commission and has no incentive to get people signed up.  While he understands the value in marketing, his primary job is obviously dentistry and nobody in his office is specialized in conversion.  In order to cater to this situation, we developed an incentive program. For all new customers, they would be able to take advantage of plenty of offers, but only if they had a special promo code.  This promo code also helped us track which campaigns were doing the best and also which leads we should be credited for.  We negotiated a rate of $75 per new customer that was within the target demographic. In 2008, we have driven an average of 195 new customers per month.  After our expenses, we are profiting just shy of $14,000 per month from this deal.
  3. You can collect all the data yourself. (This includes name, phone number, email, age, demographics, etc., and then forward this on to the business and charge them per lead.) This method is ideal for businesses who have no online presence at all.   In this case, you will have to create a site for them along with landing page(s).  Basically, you’ll create a website along with a form to collect the user information that your business is seeking. I have used this method the most and it is usually a gateway to the previous two methods I mentioned. I have done this for such a wide range of local businesses, everything ranging from tanning salons, real estate agents, lawn services, and an in-ground pool company. You name it – I have probably tried it. Like I said before, most companies can be leery about paying for a new service off the bat and we understand that. That’s why we give them the leads for free for the first month or so.  You have to use some common sense with this.  If you rack up 20 leads in a day then that is probably enough to turn over to them and see what kind of feedback you get after they have contacted the leads.  If they come back and tell you they would like for you to continue it, then work out a price. Bonus Tip:  When you are working with someone and they have not done the research on what a new lead is worth to them, you might have to sit them down and walk them through it.  Keep in mind these companies might not see the big picture of the compounding value of a returning customer over time.  If you feel sour about the deal, walk at any time and go right to their competitor.  When negotiating a price, never be the first person to name a price per lead.  Let them give you a place to start.  If they keep saying they don’t know, then tell them to call you when they do know as you have other clients to deal with.
  4. You can charge them a flat rate above expenses to manage their campaigns. (boring) If you go with this approach, basically you’ll charge a flat fee to manage the Pay-Per- Click and other accounts for the company.  To me, this is unbelievably boring and I try to avoid it at all costs. Maybe it’s more up your alley?  For a performance-based marketer like me, I hate it. 😉

There are several different approaches you can take when generating local business leads.  The most important thing when looking where to spend money to promote these offers is demographics and obviously geo-targeting.  For those who don’t know, geo-targeting is when you target a user based on their geographic location.  For my campaigns, I am ONLY going to want to target the Lincoln, Nebraska, area.  Here are some of the various ways you can promote the offers:

Promote the offers Via PPC.

Search Engine Pay-Per-Click – There are many Pay-Per-Click search engines and I suggest you start with Google Adwords (the big dog).  Google Adwords is eons ahead of the other search engines in terms of volume, accuracy, and speed. Plus, by advertising with Google Adwords you are also advertising on all the properties they have deals with like Yahoo!,  AOL,  and   If you are new to pay-per-click advertising, I HIGHLY suggest going through all Google Adwords tutorials and even taking the test to get Adwords certified.  You get your certification after you have managed at least $1,000 in spending and have passed the test. (It will also help you get clients if you are certified.)

The secret sauce in pay-per-click marketing is keywords and ad copy.  Your ad copy for the PPC engines needs to convey the incentive (covered later in this article). It also HAS to convey that it is a local business.  A lot of people do not know you can enter phone numbers into ad copy within Google.  This can be great because it might not cost you a click to get a lead.  Also, people can easily look at the ad and see the area code. If it’s the same as theirs, the ad appears to be a legitimate local offer.

Get keywords.

Keywords on a local level are a different ball-game than on a national level.  For instance, when we took over the local dentist’s website, we did some basic SEO. Within no time it was ranking #1 for Lincoln. Seems like the target keyword, eh?  Not so fast.  Over 65% of the PPC traffic coming was from bidding on his company name or his personal name. To us, the magic was in bidding on the dentist’s name and business name. 

Also, much of the traffic was coming from people bidding on phrases surrounded by city/state/zip code names.

Money Tip:  If the local business you are promoting keeps logs… GET THOSE!  They will contain valuable keyword data of what people are looking for and give you a great head start.

All-in-all, keywords are going to be a trial and error process on the local level.

Promote the offers via Social Marketing Websites.

Websites like Facebook and Myspace are the best bang for the buck that we have found.  They already have each user’s exact location, age, and sex, so it’s very easy to target your demographic.

Here are a few of the current ads we have running on Facebook for our local dentist:

Failure Tip: One lesson we learned pretty fast is that you do not want to run multiple versions.  Run them long enough to figure out which one converts best, then only run that one.  From our experience, we determined that the same person who is likely to click on one ad out of curiosity to see the offer but does not convert is just as likely to click on another version of the ad – costing you more money for no lead.  With Facebook advertising, we have yet to see the same IP address for the same ad.  I am guessing that Facebook does not show the same ad to a person once they click on it but I am not 100% about that.  Anyway, just run them to get data. Then go with ONE ad.

Promote via SEO.

You should not discount the value of Search Engine Optimization, but just make sure that the site you are optimizing is owned by you and you can take it with you (the domain).

Promote via Craigslist.

Promotion done via Craigslist can be very lucrative if done properly.  You have to be very careful not to be “spammy.”  For instance, if you can find any way to promote your offer along with the current events or say a local concert, that would be a lot less spammy than if you were just to advertise the offer. In Lincoln, Nebraska, it is best for us to tailor some of the offers around the Nebraska Cornhusker football team. That means our ad may read, “Hey Husker fans! Limited time offer! The Husker special! Come in next week and get a free XXXXX.”   You also want to be careful to not get your postings consistently flagged for spam.  Try to come up with a creative way to promote the local business mixed with some value to the Craigslist user.  It’s quite an art!

Landing Pages

As I stated before, there are going to be some businesses for which you will create a landing page that contains contact information or a form for users to fill out. If that is your case, I have some very useful tips.
1) If the landing page is part of a larger site, then keep the landing page with the same look and feel as the rest of the site.  The user should get the impression that the site was tailored to them. 

Whenever I create a landing page for a client, I do a ton of split testing on the page with heat-maps (more on that later) to find out what layout works best and provides the highest conversion rates. On some landing pages, I will use the title and context to let the user know the page was custom made for them, such as a Facebook user.  The bounce rate (length of time users stay on the page) show that this is a huge thing.  Also, the “promo code” is properly placed for ease of use.  At the bottom of the page I usually includ a ton of information about promotion details and other offers that the dental practice provides.

Tools Of The Trade

  • Crazyegg – Crazy Egg is a heat-map tracking utility that will show you where your users are clicking on your page.  It’s very useful when conducting split testing.
  • Google Website Optimizer – I cannot say enough good things about the website optimizer.  It will rotate all of your different combinations and then show you the data on what the best possible combinations will be.  We have seen 20-45% improvements using it.
  • ClickTale – ClickTale shows your mouse tracking.  It’s amazing to see what people do with their mouse movements.  It’s an absolute “must-have” for those who are using forms to collect leads.  It will show you where visitors stop to pay attention, where people stop to read more, and even where people quit and give up on your form.

Other Things To Think About

  • Integrity  – One of the key things to think about is the integrity of the business that you’re promoting. They have spent a lifetime building up their reputation and you single-handedly could destroy that.  Always keep that in mind.
  • Legalities – Always have all contracts thoroughly looked at by your lawyer. You do not want to get caught up in some non-compete or nondisclosure agreement. By the same token, in certain cases, you will want the local business to sign a non-disclosure agreement in regards to your methods.
  • Go with your gut. – If you talk to a local business and you just do not think it’s the right fit, walk out the door and find another one. I can’t tell you how many times I have worked with local businesses when I knew in my gut it was going to be a train wreck. Sure enough, it always ended up costing me more money, time and stress than it was worth.

Right now, I can honestly say that I believe local pay-per-click marketing is the new gold rush. Actually, I think it’s even better than that. It’s really like shooting fish in a barrel. It’s really that easy.  I’m sure a bunch of people will post comments with all of their excuses as to why this will not work for them.  Do not be discouraged by them.  Find a local niche and try it.  Its going to take a little bit of hard work but it’s really the new frontier.  There is a HUGE dislocation in how cheap it is to advertise on these social networks – probably bigger than the ringtone market of years ago when I wrote about it.  Get after it!

(BONUS: The folks at Facebook are giving a free $50 to new users of their advertising platform.  Just use code “shoemoneynl”.)