How much should lead generation cost?

by Erika Cannon
[email protected]

Lead generation is a valuable service to any sales team. It helps them focus on hotter deals while allowing a third party to develop colder prospects. In order to determine its cost, you must first define what types of leads you’re going to get and how you’re getting them, then compare that to the total revenue that lead is going to bring you when you close the deal.

There are four basic types of leads:

  1. Cold: name, phone, email, title, industry. Essentially, a list. There’s a lot of work for your team to do with this lead. You’d better have an inside sales team.

Cost: If there are no emails, pay a penny/record. If there are emails, expect to pay $1/record, with the anticipation of 40% of those emails will bounce. That’s just how it works.

  1. Nurtured: this lead has heard of you, knows what you do, and has expressed an interest – either overtly (responded to an email or a phone call) or electronically (visited your website, opened numerous emails). These leads will be delivered in groups, as part of a marketing automation strategy.

Cost: To operate the tool yourself, expect to pay up to $2000/month, and provide that list that you bought in Lead Option #1 (above). Rally fits in this category, and operates the tool for you, provides the data and manages your process; cost: $1500/month.

  1. Qualified: this lead needs you, has a budget, is in pain, and on a timeline to fix it. Your guy just has to get him talking and seal the deal. This is a difficult lead for third-party companies to produce, because they aren’t you, and most prospects aren’t interested in being “qualified” by a third party any more. They want to talk to the person who can solve their problem. NOW.

Cost: Depending on the value of your service, you should expect to pay $100s per qualified lead. If not, be wary of the qualifications.

  1. Appointment: this lead has agreed to talk at a certain time and place. Expect the majority not to show, or not to be qualified. Appointment setting companies are paid by the appointment, so they are desperate to get the prospect to agree, and usually on flimsy or non-specific terms.

Cost: If it truly is a qualified lead who agrees to a time to talk, that should be worth $1000s to you, so why are you paying $50? Think about it.

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