losing money on the yellow brick road
Jim Hamilton
October 07, 2024
I’ve taken a few “wrong turns” in my career.
- Trying to become an options trader
- Wasting 20k on native ads for affiliate offers
- Starting an ecom brand with dropship products from China
But the wrong turn that takes the cake is:
Starting a pay-per-lead agency in 2019.
In case you’re unfamiliar with pay-per-lead…
This is where — instead of selling advertising services & monthly retainers to clients — you simply sell them leads.
You generate a lead for X then sell it to them for 2X.
The allure for both sides is clear:
- Clients only pay for the result
- You profit on every lead you generate
Now, it only works in very broad niches where clients can afford to pay a lot for a lead.
Personal injury, insurance, debt consolidation, etc…
And reaching decision makers can be a bit tricky.
So…
I decided to go analog and sent out handwritten letters to 100+ firms across the country.
To my surprise, I got a handful of replies…
And was able to close 2 clients without case studies or testimonials.
They each paid for 100 leads up front.
I couldn’t believe it.
Mentally, I was already picking out the paint color for my new Ferrari…
But in the meantime, I promptly got to work on fulfilling those orders.
… Which is when I got acquainted with the one BIG downside of pay-per-lead:
You can lose money if your cost-per-lead is too high.
Imagine selling 100 leads for $30 bucks each…
… Only to discover it costs you $50-$60 bucks to generate them.
Yep, that was me lol.
In retrospect, I probably should’ve refunded them.
But I was hopeful my cost-per-lead would come down over time and desperate to make this business model work.
So I struggled on for a few months…
Losing money on every single lead I generated…
Until I’d burned through literally all of my savings…
And was finally forced to throw in the towel.
It was a devastating failure at the time.
And it was at that point that I thought to myself…
“Maybe I should find a job?”
I had no other options.
Thankfully, a few months later, I landed a media buying position at a boutique ad agency.
Not only did this provide some much-needed financial stability…
It’s also where I wound up meeting my future business partner…
Something I never even imagined when I started.
Anyway, moral of the story is:
Wrong turns are often just detours on the path to success.
And it’s usually just a matter of time before something you perceived as a terrible mistake…
Turns out to be a blessing in disguise.
So keep putting one foot in front of the other.
The yellow brick road is right in front of you.
And, as it pertains to your newsletter:
No matter which path you’ve chosen, my 7-Figure Newsletter Swipe File can help guide you to success.
It’s got 350+ examples of ads, sign-up pages, welcome emails, and much more.
Plus my assistant & I are adding new stuff to it every week.
If you’re interested, you can get lifetime access here:
Jim Hamilton
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