InsideUp Lead Generation Blog
Acquiring and Managing Sales Leads
A high number of leads purchased at a very low cost per lead usually result in anemic sales results. True, you can buy “leads” in large quantities for as little as $1 each, but these simply represent companies that may—or more likely, may not—be interested in actually purchasing your services.
There is an enormous gap in quality between a list of “leads” and real-time leads that represent buyers who are actively seeking your services. If you’ve been reluctant to purchase leads from a lead generation company, you could be missing out on one of the richest sources of leads available.
Some marketers hold back simply due to their uncertainty over how much to pay for leads. But a seasoned lead purchaser will gladly pay more for leads when those leads represent pre-qualified and verified prospects who exhibit an active willingness or readiness to buy.
Before purchasing leads from an online generation company, however, be sure it offers filters that allow you to precisely specify the type of leads and associated demographics that are most likely to purchase the services you offer. This increases the relevancy of your leads, which means you get targeted leads based on your lead selection criteria.
Professional, high quality lead-gen companies also follow another best practice: They employ live operators to contact every potential lead before offering them for purchase. That way, lead buyers receive correct and accurate contact information. This factor alone greatly increases the speed, ease and profitability of working a lead.
Lead Quality Depends on Lead Source
The source of your leads also affects lead value and, therefore, the price you should be willing to pay. The best lead suppliers offer leads at various value-based pricing levels, allowing you to buy, for example, premium, real-time leads versus slightly older leads offered at bulk rates, or a combination of the two. Many slightly aged leads represent real prospects who simply have a longer time-to-purchase cycle.
Leads from any source should be tested to determine value, and return on investment is the best measurement. When determining ROI for purchased leads, the most important factor to measure is not the initial cost per lead but the Customer Lifetime Value (CLV) of each new customer over several years. The repeat purchases from each customer can add up to several thousands of dollars over the years of your business relationship. (Check our blog on CLV here.)
Results: Compare, Compare, Compare
One of the best ways to get an accurate picture of how purchased online leads perform versus other lead sources is to create a comparison table or model based on transaction data and campaign results. Include revenue, market share and profits, volume, conversion of leads and direct response metrics.
After weighing such factors as lead-to-sale ratio and average profit margin for each sale, many marketers have found that higher priced leads usually have appreciatively higher performance results.
Once you’ve gained a thorough understanding of the cost to value relationship of leads, you’ll find that complementing your own marketing efforts with quality leads from a lead generation company can be a very cost-effective means of reaching your sales goals.