Our “Failed” $400,000 Business Acquisition (And The Biggest Change In My Local Marketing Agency For 2016)

Every few years a “Defining Moment” shows up in your business life that, when you look back, was the big game changer in your life.

For me that happened this winter and I’ll share exactly what it was below

For the past 3 years my own agency has been 100% focused on delivering the best Google Adwords marketing system for our niche. One where we own 100% of the assets, charge a premium price and can deliver immediate results (leads) and a guaranteed ROI for our clients.

I even did a detailed walk through video and blog post of our unique business model.

Then this past winter my eyes were opened up to the biggest missed opportunity in our business.

A guy who had a network of sites with good SEO rankings in our niche and generating leads approached us to see if we wanted to acquire his business. They were getting paid a small per call amount from Ring Partner (instead of selling the leads directly to businesses for the full retail rate) and they were ready to leave the business.

We were neck deep in due diligence analyzing the numbers when I had the BIG AH-HA…

     The Big Ah Ha!

With our current business model, on average, our clients pay Google $14.85 to make their phone ring. And our fee, on average across all of our clients, is 37.5% of that spend – so they would pay us $5.57.

So our clients are paying $20 for every phone call, however 75% of that ($15) is going to Google and only 25% of it ($5) is going to us!

Our business is already VERY lucrative with a profit margin of 61%.

However, if we were able to also generate calls via SEO (where we owned the website and all the assets, not the client), then we would keep 100% of the $20 per lead. (Plus we could charge $25 a lead and still be less than what they would pay HomeAdvisor.)

MoneyRainingGuy-545707_m-SmallIf we added an SEO lead service into our business as a second service we offered our clients, we would TRIPLE our profits!!

With this HUGE revelation, as you can imagine, I REALLY wanted the deal to work out… so we could “get into” the SEO leads business.

For the past 3+ years I solely focused on Adwords for local businesses and completely turned my nose at the world of SEO because it was hard, complicated, unpredictable and volatile.

And I felt to “get back into the game” of SEO would be a VERY difficult and long journey to figure it out again. (Thus, this $400,000 cash acquisition would be our VERY EXPENSIVE “short cut”.)

Luckily the deeper we got into the due diligence the clearer it became their approach to SEO was flawed and we backed out.

     The Call That Changed Our Direction

After we backed out of the deal, my desire to “figure this out” was in high gear so I called the smartest guy I know when it comes to this business model to see what’s working right now.

I was prepared for a grueling slog through complicated, overwhelming, boring SEO.

Instead he started off showing me one of his sites (in a similar niche to ours) that he ranked 3 years ago and has consistently gotten 30 to 40 calls every week FOR 3 YEARS!

I did the conservative math, 30 calls * 4 weeks = 120 calls a month * $25 = $3,000 a month and 100% profit.

In contrast, with our Adwords business model we would only be paid 25% of the $3000 ($750).

     It Was So Easy Even A $5/Hour VA Could Do It!

He then walked me through the process they use to get it ranked fast and it shocked me how simple and easy it was.

In fact, the process is so simple they have an overseas Virtual Assistant do 90% of the process for them at a cost of $5 an hour.

We are currently in the process of doing this ourselves as well, to add a second service to our business – an SEO Leads service where we own all of the assets.

We are absolutely not stopping the Adwords business model, instead we see this as an amazing 1-2 combination. (Plus, when you add in retargeting using Chris’s done-for-you wholesale platform from last month, it makes it even better.)

Hopefully you see the big opportunity this offers you as well.

If you like the idea of this business model… I got Joe (the guy who taught it to me) to share on this live webinar all the details of what’s working so you can copy it too.

-Kevin

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16 Responses to Our “Failed” $400,000 Business Acquisition (And The Biggest Change In My Local Marketing Agency For 2016)
  1. John Brack

    Kevin. The SEO Leads service where we would "own all of the assets" sounds cool. So… are you selling the How to methods? In Other words, where is your call to action?

  2. I'd love to know more about this — sounds like it could benefit our paid traffic specialty.

  3. Gary Braun

    Yes, I am interested. Please keep me informed.

  4. Holly Cotter

    I'd be very interested to see what you're doing. Please tell!

  5. Fred Bartholomai

    Kevin,

    Don't leave me hanging here. I absolutely want to hear his business model you are pursuing.

    Regards,

    Fred Bartholomai

  6. Shaun

    Wow….that's a big a-ha moment for you because I remember how
    keen you were on adwords…..BUT those figures would definitely change anyone's mind…
    Look forward to hearing more..
    Cheers

  7. Jim

    Yes…you've got our attention, do tell all!

  8. Paul

    Yrs, definitely interested to hear the detail Kevin

  9. Lon

    Yes! I like the idea. Please share!

  10. bruce kusler

    yep..like to know more..

  11. Simon Jones

    Sounds good Kevin.

  12. stance schudy

    Awesome! What time this wednesday??

  13. will kelly

    I'm ready

  14. I would really like to learn how YOU do Lead Gen.

  15. I've been thinking about the lead gen type of business for some time now, but I never seem to have time to get to it. but I like the idea to have the VA do all the work :) I'm in the process of contracting my first VA so hopefully soon I'll be able to incorporate lead gen in my business

  16. Thanks for sharing these tips! I am sure they will really helpful!

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