202 - AI SERIES: 18 - Why Directories Are the New Gold Rush in Lead Generation with David Jaeger

0:00You posted this and you said directories already killed lead gen agencies. They just don't know yet. Directories have driven$5 million plus to one of my businesses alone. That's freaking mind blowing. Everybody's talking about directories right now. Anybody could throw up a directory, but I haven't seen the like second half of it, which is how do you monetize it? So like I have to ask you, are they really dead or is this just for social media?

0:23Okay, David Jaeger, super excited to talk to you. Entrepreneur, digital agency, you're in healthcare. you and your wife own a practice for mental health care. But something caught my eye the other day on Twitter that I just had to talk to you about. You posted this and you said, directories already killed lead gen agencies. They just don't know it yet. Directories have driven$5 million plus to one of my businesses alone. That's freaking mind blowing because everybody's talking about directories right now and like, oh, anybody could throw up a directory, blah, blah, blah. But I haven't seen the like second half of it, which is how do you monetize it?

1:00And so when I saw that you said directories have already driven$5 million to one of my businesses, I knew I had to talk to you. And then you go on to finish the post with like a comparison of agencies and directories. So an agency, you have to convince one client at a time to pay you$5 ,000 a month, a directory of 12 ,000 businesses fighting to claim their profile, An agency, you beg for attention. Directory, they beg you for rankings. An agency, hey, we'll get you leads. Directory, pay us or your competitor will. The game has changed. Most are playing checkers still. So that was your post. I have to ask you, are they really dead or is this just for social media?

1:40No, I think that being in the agency world and quite frankly, not enjoying it, I've been on a journey of it, you're commoditized and it's only going to get worse with AI. It's the ability to knock out so much, really, really not, you know, for the right agencies, it'll turn them into superpowers and we definitely have superpowers. But at the end of the day, that value prop is lessened when you just drop AI into any entry-level person with processes or even without the person behind the wheel. And all of a sudden, the stuff gets done. So let's level set this for people who are listening. I think most people have seen like, oh, you could spin up a directory.

2:24And I think most people know, oh, an agency is a business that anybody could spin up. So we have these two things, directories and agencies. Can we just define really quickly, what do we mean when we talk about directory? And what do we mean when we talk about lead gen agency? There are many different types of marketing agencies, different models. But any of those, for the most part, most of those models are commoditized. It's very, very, whether you're paid on performance, whether you're selling SEO or you're selling Google ads, which I do. Facebook ads also do. Website design development. Those are all agents.

2:58That's what I would call agencies. and even lead gen agencies. Like I sell leads on performance in some verticals. And that also is a very challenging environment. Again, if you're successful, you can be wildly successful. And there are very many wildly successful people. So that's the agency side. The directory side is basically owning your own brands and being able to create your own. It takes a tech environment. You could just, hey, I'm going to, you know, get a directory and find one of these off-the-shelf softwares and build something. And I've done that before. I've never really been able to turn it into a brand, and I never really loved it because it was just really hard to build and didn't feel like I was adding value.

3:42Now with the AI side, I'm seeing a massive opportunity with using that to build your own brand. Help me understand. My understanding of directories is like, you say, oh, pickleball courts. I'm going to create a directory of pickleball courts. And it's like Yelp meets Craigslist where, okay, here are different businesses that offer pickleball courts. You can go and search and you'll find it and it'll be geo-fenced, yada, yada, yada. And then the agencies I understand because that's a business. I outsource my marketing essentially to an agency and the agency goes and then generates leads for me and hopefully I get business.

4:14Both of those can produce business results, but I'm having a hard time like understand like why have directories killed lead gen agencies? Are you saying like every company should have their own directory? What I'm saying is that an agency is a rat race. It's only until you're the next cool thing, only until the next space. And there's downward marketing pressure on the AI side. Whereas directories, you own the brand. And if you own any vertical where there are directories that are adding a massive amount of traffic or value, they just, they kill it. There are so many different models. And at the end of the day, they own the brand.

4:53They own the customer. And when they own the customer, they're never going away. In the post, you said, one of my businesses has already driven$5 million alone from a directory. You may not be able to share because this might be a client of yours, but can you give me in this example? We run a psychotherapy practice and 90 % of our leads come from one directory. I have my SEO is garbage. my like relationships with payers like not really there like there's it's literally one a one thing and we've and we've got other other traffic channels but the volume that we've gotten has built our practice and again we have 20 clinicians we have millions and millions of dollars on the directory so no that's the thing is i'm the client and i pay it and it's a no-brainer It is the dumbest, stupidest.

5:47There's no better ROI. I remember like I have a CFO does work or whatever fractional CFO slash bookkeeping company. And he has a whole bunch of behavioral health companies that he that they do the numbers for. So I get to benchmark my performance against other behavioral health companies. And he is like, hey, so what's your CAC? And I'm like, zero. out. Hey, I don't know if you remember this, but when we started this podcast, we entered into a social contract. I would spend time, energy, and money producing this podcast, interviewing these individuals and giving you insights into how to build, buy, start, grow your business.

6:24And you would like subscribe and leave me five-star review. Now out of that, we both get to talk to really cool people and hear really cool insights. We both get a ton of value, but I just want to help you keep your word. So would you do me a favor? Will you go leave a five-star review for me on Apple or Spotify? It would really help. And if you want, even share this with a friend. I don't pay CAC. The last time I ran Google ads was in 2020 for a month. And then my wife got mad at me, turned it all off. And we've been sailing ever since. Dude, you're kind of blowing my mind because it sounds like an agency could say, Hey, look, look, I specialize in mental health services and I'm going to go and target mental health practices.

7:07How would they go and get those practices in the past? They would go out and cold call people like you and your wife. You're like, Hey owner, we'll do digital agency services for you. We'll do pay-per-click. We'll do SEO. We'll do all this other stuff. But like there could be a place where this agency says like, okay, we specialize in mental health services. Let's build a directory. And the directory will not only be a lead gen for the patients, but it will also be a lead gen for like these companies to come after us. That's a brilliant model, dude. Oh, so that's why you're saying, okay, directories are killing lead gen agencies because it's like, okay, if you can get first to own like one of the best lead lead gen funnels, these directories, you're kind of staking out your territory.

7:49Oh my gosh. Okay. So the company who has this directory, right? That you get the majority of your referrals from, are they a digital agency? They are a publishing platform that like a prestigious journal in the space that also has a directory but there's like i don't know that's crazy there's probably a hundred directories in the psychotherapy world and like the top software company has a directory and it's a massive bolt-on to their business because it's like sign up for our ehr and you get listed in our directory and our directory In a directory. This is the only way to get in. It's not like I can go sign up.

8:26So for me, honestly, there's a part of me that if I knew there was enough traffic there, I'd spend 60 bucks a user a month to have my profiles there. Because you know what? There are other directories that charge 60 bucks a month without the darn HR. There would be some lead time, right? Like I'm in home health and hospice. So let's say that I wanted to start a digital agency targeting home health and hospice agencies. I'd have to build out the directory get to a point where It's generating enough traffic and lead flow to start sending to different agencies in different markets But then at that point I'd have a captive audience because i'm sending them business and I have a shoe and a beachhead into their business where I could Do other things for them.

9:05I know how long it takes to like build the directory. How long does it take to get it? Where there's traffic going to it because that for me that's the missing step is like okay Anybody can build a directory but how do you get it so that it's indexed on Google and so that traffic's actually going to it and that it's ranked? That's the part that I'm having a hard time with. Here's the, I guess, coming from the paid ad side, right? Like the, for me and my models, when I master vertical, it starts with the paid ads. So driving traffic is never a problem. The problem is always the client being annoyed, not being able to work the leads properly, having all these complaints and they have no fear of losing me because it's their brand, their ad account.

9:45And, you know, half the time when you're successful enough, they just, they'll take it in-house because they're like, why should I pay him? I'll just do it myself. It was me that was successful anyway. With directories, like you own the brand. So you monopolize and there's a sense there's a FOMO there. So there are a lot of traffic channels. Quite honestly, I don't even know how long SEO is going to hang out for With the whole AI and the transition in, you really have to build a unique content base. Just slapping up a list of vendors or providers does not cut it. So I'm not relying on my short-term plan.

10:21Wait, wait, wait, wait, wait, wait. Time out, time out. I'm so sorry. I'm an idiot. I'm a Neanderthal. Hold on. SEO traditionally has been, hey, I'm going to put all of these keywords and articles and backlinks, et cetera, so that I rank high when somebody searches for that in Google. Google's AI has kind of killed that, right? Because you'll search for something now and Google will have an AI answer. And now there's even links in the AI answer that people click through. So you can kind of optimize to get into the AI answers. But the rest of those results that people used to get really hung up on ranking for, it's changed.

10:55It's totally changed the dynamic. Are you saying, hey, directories are a buffer against that? Like, hey, if you can get into the right directory or the right network, you're no longer at the AI's whims of whether or not they answer. Absolutely, because there's so many entry points. When you own your own brand versus running as an agency, you can say whatever the heck you want. And all of a sudden, you can start pursuing your own traffic channels. And there's so many. I mean, I hang out on X long enough. And there's so many guys going, or gals, doing so many innovative traffic channels that drive a massive amount of volume.

11:32As a paid ads person, it's every single commercial keyword is every single commercial keyword gets about 60, you know, 60 % of that generally can go to paid ads. If it's a local keyword, localized, like, I don't know, home hospice near me, right? The SEO is pushed down. You've got your paid ads. You've got your Google Maps results, which take out more than the number one, like you get 15 % of the traffic from the number one listing on the Google Maps side. And the Google Maps side is basically that number one listing gets you more traffic than all three paid ad results put together. Now, that doesn't include LFC.

12:16Yeah. So you want to optimize that Google business profile, basically. Oh. In order to rank. Heck yeah. Okay. One of my AI tools, but that's another concept. The SEO side, I'm not knocking SEO because SEO is a phenomenal value and it's never going away. It'll change, but it's never going away. And it's just, it's seeing the future of it. And I think from that side, building a directory and thinking that you're going to rank on Google for it is not, I'd be scared. That feels to me as somebody with an investor mindset to you, like that feels like one shaky leg that is going to fall apart pretty quickly, even if you're a very experienced SEO.

13:01out. Okay. So one of the things we were talking about for the call was like, you can get all these leads, but the question, and you said this just a minute ago, you get all these leads, but the question is, how do you service them? How do you handle them? Do you respond in a timely manner? And especially with directories, it's not exactly a directory, but like Angie's list or Thumbtack or Google LSA are similar to that, where you get a referral and it's like, okay, whoever responds to it first gets the referral. How do small companies, small businesses who don't have the budget for a full-time QSR or not QSR, what do they call them?

13:33CSR. How do they respond to these leads? It's a fantastic question. I tend to deal with a little bit of the larger client, like the ones doing one to five mil, but even my tools can work for smaller people also. And we basically, we talked a little bit about this, but the biggest thing is that especially leads coming in from directories or leads coming in from forms where the user's filling out more information about themselves, what happens is that lead just dies. They never get like 60 % of the time, nobody responds to that message until they can get around to it. Until the, well, you know, now I finally have time.

14:12Let me go look at all my leads that I've never responded to. Or they will follow up the next day, which by that time, your user, depending on the traffic channel is gone. Most of the time they're just gone. Because there's friction. Right. Because it's like, oh, this is too hard. I don't want to fill out the rest. Right. I don't know if this person's legit. I don't know. I don't know not. And that's one of, so one of the big things that we win with in our therapy world is we have an instant SMS that goes out and it's generic. I, in most verticals, I have an AI tool. It's just given the liability in the mental health world, I built the AI responder that personalizes based on their messaging, but it's instant and instant message, even a generic one that asks for a little bit more information.

14:57Ideally have an AI bot that texts back and forth. People do not pick up phones. People do not respond to emails. They do respond to text. It's just really, really freaking convenient. So you go back and forth via text. And this is one of the reasons why GoHighLevel or my white label grownow.app is so, so powerful is because you set up these flows. Again, we just set it up with an AI bot and we've spent hundreds of hours tweaking it in very combative verticals. And I'd love to show you that too, if we have time. Is this the framework you were talking about? The two by 14? Two by 14? Yeah. It's a mind blowing little tool.

15:36I was hoping we can get to directories because directories are fun, but the two by 14 is killer. And so we basically took all the work that we spent and automated it with AI, like three answers and bam, it knocks out crazy stuff for you. Well, I mean, directories are cool and I like directories. It just feels like it's one part of the equation. It's like, okay, cool. You're generating leads. But the next step of the flow is now that you've got the leads, what are you doing with them? It feels like there's less focus on that, which makes sense, right? Like it feels good. Oh, I generated all these leads.

16:08But for the business owner, it's like, well, how many of those actually converted into revenue? How much of that was actually converted into paying customers? And if you don't have the systems on the back end, it doesn't matter how many leads you're generating. So that's why I get curious about how do you automate the response to these leads so that they end up converting? How do you make your own AI customer service rep? Absolutely. I can show that to you in a moment. But I think the more important thing is that when you're an agency, what feeds you is leads. your own like, like direct, like business owners, small business owners, large business owner prospects.

16:43And I mean, I run paid ads for pretty successfully. I can generate leads in most verticals of business owners, but there's a lot of friction. The directory, honestly, I'm about to just spin up a ton of cold email and go reach out at 12 ,000 providers in my directory list. I'm going to off. It's a basically a sneaky backend in to open up a conversation and sell them something. And it doesn't make a difference what the hell I sell them. Claim your listing. Here, questionnaire. Bam, bam, bam. Do you need help with funding? Are you looking for acquisition? Can we like, what's your number one challenge?

17:16And I can go through, I've built that. Needs a little bit more tweaking. But that right there, how many responses do you think I'm going to get when I say, hey, referrals for X? And it's like, hey, we're running this directory. We've created this listing for you. Maybe I'll share it, pick the ones that have amazing reviews. send it to them first. We'd love to have you claim your listing and customize and blah, blah, blah. Can you go through this question? You know, and then if they respond, send them the link, hey, claim your listing here. Bam. Done. Now I've got, it's mandatory. What are the things that they struggle with?

17:50Now I have a conversation opener. Great. We've approved your listing. By the way, I noticed X to, would you like to schedule a booked call or automate that on the backend. And as soon as they do that, drop a thank you page message with that in there. So it's a sneaky backend in that can open me up to the whole freaking industry. And now the question is how do you monetize that? So I don't even care about the lead issue like that. Yes, I can sell that, but I need to know that that's a problem first because different business owners, even with the same problem, there's a certain amount of solution awareness and predisposition to issues that they have.

18:28It's like I have clients that use our two by 14 system and they don't, they customize it. Like I'm giving them, I was like, here, let me hand it off to you. And then they just don't use it. Or there's a ton of support that's involved. And it's like, dude, like follow the damn lines, the dotted lines. And so every single business has like, you can't just hand something over necessarily. And every business has their own pain points. Some of them have cashflow challenges. Some of them are just burnt out. Some of them want your marketing. Some of them hate paid ads and they want to do SEO. And all you got to do is open up a conversation.

19:04And that's a give. It's a give first. It's like, hey, can I have you verify your information, claim your listing so that we can send you resources, we can send you referrals. So what do you want to show me? Like, did you build something for that in particular? Or is that just your thesis of how I entered the market? It's built. it's about to get launched on the marketing side. So you can have a little sneak peek. Can I see it? Can I see the preview? Yeah. Yeah. Shoot. We don't have a lot of time, but I have to tell you that this business, this vertical that I moved into actually came from you.

19:38From me? Yeah, from you, dude. So video's cool, but I have what scientists call a face for radio. And so what's even cooler is long form audio via my podcast and my newsletter. Nickonomicspod.com. go there for free subscribe to my newsletter it's one email per week super tactical and then go to my audio podcast i do three to five episodes a week depending on how curious i am and it's stuff like this it's all free no sleazy sales pitches nickonomicspod.com so remember you posted like a year ago you're like somebody gave you 100 grand would you build or buy what would you build and at the time i'm deal i was dealing with we have hundreds close to 500 clients a week that we see and you've been in the billing space it's out of control primaries secondaries who's the managed care plan this that and you're just like your ar goes crazy and it's just noxious and i was like i looked at it and it's like my clinicians cost a boat ton of money i'm competing with venture capital funds so our payroll keeps going higher to receive the same thing and so margins get squeezed a little bit it's still a damn good business but it's challenging and i was Like, oh, you know what?

20:45Like, I like ABA. ABA sounds really exciting. Like, instead of 450 clients, I can have 45. And I make the same amount of money at a better margin. And anybody can be a behavioral therapist. Like, this sounds amazing. And so I posted about that and how I build instead of buy because the marketing chops I have. And I actually have a client in ABA because of that. Guy reached out, started opening up. No way. Yeah. And so we've added millions of dollars in ARR in the ABA space. And we're talking about how do we go national? Like, what's the play? What's the so - That's amazing. Yeah. So I owe - Okay.

21:24So David, while David's pulling that up, basically, I love the ABA space. And for those who don't know, ABA is Applied Behavioral Analysis. It's for children who are on the spectrum, who have autism. What's crazy is I want to say when I was born, it was like one in 500 kids were diagnosed with autism. And just last year, it's now like one in 28. It's crazy. An insanely high number. And so these children need more and more services. And there's just simply not enough services for them to meet the demand. And they need people to help them understand how to navigate the real world, how to navigate their feelings.

22:01These kids are on a massive spectrum of, you know, some of them are nonverbal and some of them are highly verbal, but it's growing like crazy. I think it's an amazing business. I think it's an amazing mission of a business. And so it's something I want to get into someday. That was what I posted about it, but it's freaking cool to hear that you like took it and just ran with it. Yeah. It's funny. You just posted like what vertical would you be in? That was what I posted. I just need to, I want to find one more thing. It's just a little bit awkward. Well, cause I love, I love businesses with tail lens behind them.

22:29That's why I love healthcare, especially elder care, because our population is aging so fast and there's not enough demand to meet the supply. So you can kind of be anybody and be successful if you enter that space, just because there's so much demand. I can ride the tidal wave. ABA is like that as well, right? Like there's so much demand. Honestly, when I was in healthcare, I didn't know what CAC was. I didn't know what LTV was. I didn't know about pay-per-click ads because we don't use those, at least in my home health and hospice. We don't acquire customers online. There's just so much demand that we kind of have to just go out physically and let people know that we exist and then we get lots of patience so so funny because we're the opposite like the directory is just true of everything for us and i was like it was the one biggest most affordable directory and everybody talks community outreach and google ads and all this stuff and we just we did i had a no index no follow on my freaking the home page for three years and i was just stupid i just threw it up and i never came back to it and i was just like came back i'm like oh my goodness rookie mistake three years later and we should just get full amazing yeah so but yeah no aba is really big you're doing something meaningful it's recession proof it's high revenue per client very very high revenue per client margins are defensible it's a tough business from the insurance space but again other conversation bottom line i love it and I won't be in more and try to get my greedy little hands in.

23:58So for me, a lot of it is the healthcare side. These practices, a lot of them aren't necessarily well run. And so I'm always looking for acquisition opportunities too. And even if it's not my own money, go put something together and like, hey, let's do it. Single asset fund, multi-asset fund. Go bring it to people that are already in the industry. Bring it to new people. There's so much reeling and dealing, and it has so much more value than the agency side. So even if I don't get paid by the business owner, like this is gold. So the problem that I have - So you built an ABA directory? Mm-hmm.

24:33Oh, I'm so excited. All right, sorry, keep going, keep going. Yeah, I mean, you can go see it, it's live. So basically up until I tried the WordPress thing and Frey on YouTube and ship your directory, guy's awesome. He has a lot that he does around this. I don't plan on building a brand around the directory world. I'm just, I need to be locked into what I do. But the WordPress side did not do it for me. I tried to get a guy to like build something on lovable disaster, just absolute disaster, overthought. And it's just, it's a pain. And I have development shops, but I was not going to give this to my developer, A, because lots of other things to do.

25:12B is I want to kind of mess around with it myself. And so I got my tech stuff done. You can see right here, I got it to a place where a I scraped 12 ,000 plus ABA providers. I also downloaded all of their reviews from Google. Now, hopefully, maybe you have to delete this on off of YouTube whenever Google starts getting nuts, but I'm not. And so basically, I just I've been chatting with Windsurf. I've been using Windsurf and Claude Code with a whole bunch of things. And I'm not really a developer. I'm a fake developer. I have a developer that works for me, but he's front end. Like we've never always struggled with getting good backend enterprise guys.

25:55It's expensive as heck. And Claude Opus and Claude Coder, like the last like month, it just nuts. Like I've messed around with this stuff for years, different ways. And like, this is just, I can be a dumb ass, excuse my language. And it just can get built. So going to here, there's a lot here. So I have like a little matching quiz and this is to generate leads. Oh, sweet. And again, there's still a little bit more work, but it's pretty highly conversion optimized. You can literally just go into Claude or Windsurf and say, hey, look at this, you know, build me something like this. And so this is to get the lead for the product, for the prospective client.