Is it better to pay lead generation per lead or per hour

There are numerous ways in which you can get leads. You may choose to keep your lead list building efforts in-house and attract them with interesting and relevant content through your website and social media. You can buy lists in bulk, hire a freelancer to do the lead generation for you or outsource it to a specialized agency.

There are three ways in which you grow your business. You either increase the price of your product or service which may result in losing some customers. You can increase the number of transactions a consumer makes over a certain period of time by giving them special offers and loyalty programs which they may or may not use, but these can be hard to come up with in B2B ecosystem. 

Finally, the third way is to increase the number of customers without changing your pricing or offers which also means you’re keeping the old customers. This will also mean way less hassle for you and the entire organization, which is usually included when it comes to significant changes within a company.

This is where the lead generation comes in, but you need to know how to acquire the leads that will convert and how much to invest to get the most in return. Also, in order to have a normal functioning sales department which helps your company grow, you need a constant source of leads.

There are numerous ways in which you can get leads. You may choose to keep your lead generation efforts in-house and attract them with interesting and relevant content through your website and social media. You can buy lists in bulk, which are usually not recently updated and sold per lead, even though the majority of those leads will be useless. You can hire a freelancer to do the lead generation for you, but you’re usually paying them per hour they spend looking for leads which may result in 0 or 100 leads depending on the industry of your target audience. 

On the other hand, you can outsource an entire lead generation process to a pay per lead agency or agency that charges by the hour.

Pay Per Lead Lead List Building

Pay Per Lead lead generation is the most common ones. The logic behind this is simple – you pay for the number of leads that you get in return. The agencies that use this method can provide you with already collected leads for your industry, type of business, what have you, or they can establish a program so that you get the most relevant leads.

The price of the lead can vary – but Growth everywhere website suggests you should use the following method of determining your lead price. Multiply your customer lifetime value with 1% of your total leads collected or bought, then 15% of those leads that are actually qualified and 20% of that number of leads that will most likely close. If your CLV is, for example, $1000 you should pay $0.3 per lead.

Lead generation agencies that pay per lead will usually charge from $0.5 to $5 per lead.

This may seem like a super cheap option comparing to your other marketing expenses, but some companies are so big that those leads may end up costing them much more. 

Plus, there’s no guarantee how many of those leads are actually fit for your business, service or product.

There is also a good question to ask – how do those companies find the leads for your business? Do they use co-registration programs that attract poor leads? Do they have a list that they just sell to anyone who pays? Do they sell those same leads to multiple companies? 

Pay Per Hour Lead List Building

Of course, these are the same questions that you should ask those agencies delivering leads based on hourly rates. Except, their very business model suggests one thing – they are doing the thorough research to make sure all the leads that are delivered are of highest quality.

This means they don’t have a prepared list of contacts that will be rearranged and sent over to the client based on their requirements. The web can be scraped for contacts within minutes, so why would they charge per hour? The only answer is – they are doing the actual research.

Market Republic, for example, has its own team of researchers that are dedicated solely to finding only the contacts that fill client’s criteria and sorting them into data sheets. That data can include as many points as the client requires – email, job title, company size, phone number, LinkedIn profile, etc. When using pay per lead services, these can significantly increase the price of the lead.

Normally, the number of leads found during one hour will depend on the certain industry specifications. It’s a lot easier to find VPs of marketing than wood pattern makers, but usually, you can get 10 times more leads with the same investment as if you were paying per lead. What is more, we can guarantee the 98% accuracy of leads delivered.

With this kind of lead list building setup, it’s easy to scale up or down whenever necessary, since you’re already paying by the hour.

Sure, everyone will tell you that lead nurturing is far more important, that having a captivating website, informative blogs and interesting social media profiles are far more effective. This is the truth, at the end of the day, there’s no fit lead that is going to buy a bad(ly marketed) product or service. 

However, one of Market Republic’s clients, Guidance, has seen more leads and therefore opportunities and clients from a high-quality lead list building than they have from all of their other sources combined. Meaning, carefully curated contact lists have proven to be more useful than website, partnerships programs and event attendances put together.

Should You Pay For Leads Per Lead Or Per Hour?

Which one of these two lead generation payments work for you depends on your budget and number of leads you need.

We can only recommend that you try to have a steady inflow of leads throughout the year and especially in Q1 so you can continue to nurture them all the way up to Q4 and beyond. 

Especially if your startup or small business has tendencies towards growth, there is a good chance you will need to scale up your lead generation requirements very soon.

If you would like to learn more about lead generation per hour – feel free to contact us.


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