When we’re offering our lead generation solution to our customers, one of the most common comment that we receive is that, “We can pay X amount for X amount of leads, which means that we can get X amount more leads for this price than what you’re offering.”
Uhh….People automatically assume that paying a smaller price for a larger amount of leads means that they will receive greater value out of the leads, which is untrue.
Lead generation can be approached in many ways. There is the quantity way and there is the quality way.
Quantity way means that you buy leads that aren’t necessary qualified or researched, but you think those leads will match your criteria. For example, let’s say that you’re an email marketing software company that charges a minimum of $100/month for marketeers to use your software.
You might automatically assume that a lead would be some sort of VP marketing in any company that has more than 15 people. You can easily find a company that will provide you with 1000 VP of marketing from random companies, but how do you know if that company is actually a good fit for your software? How do you know if that company will actually use your product?
Quality or qualified leads on the other hand, are leads that have some sort of buying signal and matches your ideal customer profile.
For example, your marketing software might integrate with Helpscout (a support ticket software) and you know that Helpscout users would benefit a lot from your product.
Ideally in that situation you might be looking for leads that are VP of marketing, have more than 15 people in their team, as well as use Helpscout. Finding these specific time of leads take time, which cost more money, but at the end of the day, these are the type of leads that have a higher chance of using your product and converting to being a paid user.
So should I go for Quality or Quantity in Lead Generation?
There should always be a strategy behind lead generation and there isn’t a right or wrong approach to it. The approach that you take should be based on the type of product you are selling and the type of audience you are targeting.
If you are a software company that only sells a product for $20/month, then it might not make sense for you to pay a lot for leads because you can probably get a better return using an alternative channel like advertising.
If you are in an earlier stage, you might want to pay for a higher quantity of leads at a cheaper price to test the market and identify the product market fit.
If you are targeting bigger companies with a larger value order, then quality leads is a must. In addition to just having quality leads, you would also want to research each individual lead. This is where we stand out. We do a lot more research than other lead generation companies. We walk that extra mile to identify a buying signal or something unique so that we can use that to approach the lead.
The last thing you want is to waste a lead and ruin your brand’s image. That is why quality and research matters a lot when it comes to lead generation.
Use case example
Let’s use a quick example. You’re currently paying $1000/month at Company A for 500 B2B leads, which is $2 per lead. This lead generation company will give you VP of marketing at companies that have more than 50 people. You set up your email drip and blast these leads with a sales template. Only a handful responds and maybe 2 actually converts. In that case you are paying $500 per conversion/acquisition, which is ridiculously high.
Now Company B provides you with 200 qualified leads for $1000/month. These leads are fully researched and qualified and matches your ideal technology target perfectly.
You send out a batch of really personalized emails and set your drip followups. Out of those 200 qualified leads, about 30 of them respond and 10 of them turn into paying customers.
In that case you are paying $100 per conversion. Depending on the life time value of your product, that may be worthit, but it is certainly a lot more worthit than Company A. 10 customers might also become superstar customers and refer you to their friends which makes their lifetime value that much more effective.
Typical lead generation process
Assuming that you are paying for high quality leads, the typical process might involve the initial list building, filtering, then intensive research to ensure that the leads are qualified and matches your ideal customer profile. Anybody can do the initial list building for a cheap price and that does not define them as a qualified lead.
It’s what happens afterward that matters. Usually after the list building is finish, someone needs to filter them out to make sure that it matches the criteria based on the data points provided.
After that, every lead needs to be fully research to ensure that there is some sort of buying signal. This can be manually going to each one of their blogs, visiting their social media, or even reaching out to see what software they are currently using.
The whole goal is to find some sort of buying signal or something unique to approach the lead with, so that you don’t just look like any other software company in your field.
The amount of time and work that it takes to generate a qualified lead and to find their contact information should cost way more than just 25 cents per lead.
So next time a company offers you a bunch of leads for 25 cents, you should rethink the process and see if these are actually qualified leads that will convert. Personally I would pay more for leads that actually convert, rather than dump a bunch of money down the drain and not have any leads that convert.
Looking for highly qualified and targeted custom sales data/leads? Reach out to us anytime at GrowthOK