There’s a reason why more and more businesses are outsourcing their lead generation. Lead-gen is time intensive. It’s heavy on resources. And to put it bluntly, it’s hard work chasing around dead leads all day.
But the C-suite knows that an influx of new customers/clients is the only way to stay in business and thrive.
So if this is you, you have three options:
- Do it yourself and build out a sales team
- Hire out lead generation on a pay-per-service basis
- Get a lead-gen provider that only charges for performance (pay-per-lead)
We’ll throw out #1. After all, you’ve probably already tried that. That leaves us with two options. So which lead-gen model is best for your product/service/industry? And how do you choose a provider when it’s time?
Don’t worry, today I’m sharing exactly what to look for in a lead-gen provider. And spoiler alert: the pay-per-lead model is what I recommend, all day, everyday. It’s more cost-effective, efficient, and all-around effective when compared to the other option.
But first, let’s cover the main differences between the pay-per-lead and pay-per-service models.
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Pay-Per-Lead (PPL)
In the pay-per-lead model, you only pay for performance and results. To put a finer point on it, you are charged a dollar amount on each qualified sales appointment that is booked and held.
If you’re the type who doesn’t really care about a vendor’s “proprietary system” and “best-in-class approach” and you just want results asap, then a pay-per-lead provider is your best bet. You only pay for leads on your calendar, and nothing else. There is no hand-holding, no frills, just heavy-hitting lead generation (given you found a legitimate lead-gen provider).
With the pay-per-lead model, results are guaranteed, or you don’t pay. It’s the only way I recommend filling your pipeline.
Pay-Per-Service (PPS)
In the pay-per-service model, you will typically pay for strategy, outreach, lead nurturing, and meetings with the lead-gen provider (usually wrapped-up in a monthly retainer fee, with long contracts). Notice something missing from that list of inclusions though? RESULTS. That’s right, under this model, any leads that you happen to get from this provider are considered a bonus. Results are usually not guaranteed.
Now, this isn’t to say that pay-per-service lead-generation providers are all bad. You can maybe find a good one here and there. And some businesses would rather work under this traditional (ahem, dinosaur) model. Some C-suite leaders need that feeling of control they get from micromanaging the lead-gen process from start to finish. I somehow doubt that’s you, so keep reading to see why PPL is so much better than PPS.
Tip: I did say with the PPL model clients only pay for leads that are booked and held. Well, that’s not always the case. Some lead-gen service providers will charge you for each meeting that hits your calendar, whether they ‘no-show’ or not. So I recommend only working with a PPL provider that charges on meetings held, not just meetings booked.
Cost
PPL – In almost every case it is more cost-effective to pay for each lead booked on your calendar than it is to pay monthly retainers. The cost can range anywhere from $300 – $3,000 per meeting booked, with most coming in around $500-$1,200. And the better the meeting (industry, title, company size, relevance), the more you will pay for that meeting. For instance, a meeting with the CMO of Nike will cost much more than a meeting with a Director at Bob’s Five-and-Dime. And it should!
PPS – As mentioned, you will usually pay on a monthly retainer basis, likely in the range of $6,000-$10,000 per month. But don’t be surprised if you see monthly retainers in the $10-$20K range. Unfortunately, many of these providers will take your money and leave you high and dry.
Advantage: Pay-per-lead
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Incentive
PPL – On the pay-per-lead model, the provider doesn’t make money unless they book you appointments. So they have all the incentive in the world to work the phones, strike up conversations, nurture the leads, and get those appointments on your calendar.
PPS – Unfortunately, there’s not as much incentive with PPS. They get paid no matter what — leads or no leads. Remember, their payment is based on their time and effort, not outcomes. Of course, they will want to perform in order to keep you as a client. But the short-term desire to succeed just isn’t there like it is with PPL.
Advantage: Pay-per-lead.
Scalability
PPL – In some ways, PPL is like a faucet. You can turn it on when you want more leads, and turn it off when your team is at capacity. Or scale like crazy! It’s completely up to you. There’s usually loads of flexibility under the PPL model.
PPS – Under this model, it’s a little harder to scale, as there is likely a contract and predetermined set of activities that were agreed upon. Now, this isn’t to say you can’t amend the contract, but in some cases this won’t be feasible.
Advantage: Pay-per-lead
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Done-for-you Vs. Done-with-you
PPL – Typically a PPL service is done-for-you. Sure, you’ll have to collaborate up-front to help your provider understand your product, service, and target market. But after the initial onboarding, it’s usually smooth sailing.
PPS – This done-with-you model often requires your input and your team to strategize and collaborate over time. So by nature it ’s more of a time suck and energy drain compared to PPL.
Tip: When it comes to brand management, PPS can be better than PPL. Some PPL services take a scorched-earth approach to get you leads at any cost (since they get paid per lead!), no matter what it does to your brand image in the marketplace. So be cautious of these firms. Just do your due-diligence before pulling out the credit card.
So Which is Better? Pay-per-lead or Pay-per-service?
Pay-per-lead providers have the obvious advantage in most areas. These lead-gen providers put their money where their mouth is. They are so confident their service will work that they won’t even charge until they get you results. This performance-based sales model is becoming more and more attractive to companies everywhere.
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Final Words
If you’re a fortune 500 company with deep pockets and a scaled-out sales team, then by all means keep your lead-generation in-house. But even then I’d recommend augmenting your existing sales outfit with a solid lead generation service. Remember, a pay-per-lead service gives you everything from ROI prediction to risk management and flexibility.
Pay-per-service isn’t always a bad model, so long as you’re getting some kind of deliverable. Even if it’s just brand recognition or strengthened relationships within your industry… if you don’t get leads, you need to get something to show for it. Also with PPS, you might get better support, a more comprehensive strategy, and market research. So it can be beneficial if you don’t need leads asap.
My advice, though, is to only work with PPL providers. It’s your safest bet. After all, chances are you’ve been burned by so-called expert firms in the past, working on the PPS model. So why not only pay when you sit down and talk to real decision-makers? That’s what we do here at C-Level Partners. We put you in front of the right decision-makers, and you don’t pay unless we perform. It’s the only way to get qualified leads that convert.
Until next time…
Johnny-Lee Reinoso