Seemingly, paying-per-lead is a highly attractive model as it provides a guaranteed result from lead generation investment.
But in practice, does pay-per-lead deliver greater sales growth and ROI than working in partnership with an agency that charge for their time and expertise?
There are some scenarios where a pay-per-lead model can and does work. But equally, particularly in B2B environments, there are many cases where pay-per-lead is counter-productive.
Lead Quality vs. Lead Quantity
Where the client pays the lead generation agency on a per-lead basis, naturally the focus of the agency is the volume of lead generated.
There will be times when the prospect is open to having an exploratory meeting, yet in truth, the lead is not sufficiently qualified to warrant a salesperson visiting.
From the agency’s perspective, it is a genuine lead. The prospect has agreed to a sales appointment, the meeting invite is sent, and the appointment progresses.
But were they just curious or genuinely interested?
The financial incentive of pay-per-lead, doesn’t and can’t foster the genuine two-way relationship between agency and client where long-term ROI is the shared objective.
Where there is a long prospecting cycle, typically a good lead generation agency would run lead nurturing alongside lead generation. This would often take the form of content marketing – writing relevant articles and guides, and sharing them with prospects via email marketing and social media.
However, as the focus is always going to be on immediate results, and to a degree, finding the low-hanging fruit, there is little incentive for the agency to invest in effective content marketing and lead nurturing; because the brand value this creates isn’t rewarded financially.
Culture Fit and Brand Reputation
To many businesses, their brand and reputation are sacred.
So, is it not a contradiction to incentivise an agency to generate leads at any cost? To help frame this, would you expect the agency to employ commission-only telemarketers?
Fortunately, the days of commission-only telemarketing jobs are long gone. But in effect, by paying-per-lead, you are simply employing an agency on commission-only. So, due consideration needs to be given about the behaviour and culture that this drives, and whether this is consistent with your brand and reputation.
Market Intelligence & Data Enrichment
Two of the key benefits from telemarketing are; market intelligence gained through human interaction with prospects and data enrichment. Data enrichment includes capturing decision maker contact details, account profiling insight such as competitor information, spend on or usage of your services, and pain points or strategic objectives of the business.
The value of this information is that it can drive greater return from other marketing activity.
Additionally, it can help shape Director-level decision making on areas such as pricing, product development and market positioning.
But here lies the dichotomy for the agency. If when initially engaging with the prospect, the telemarketer qualifies that there is not an opportunity in the short-medium term, where is the incentive to continue with the conversation? The pay-per-lead model prioritises moving quickly on to the next call, yet the risk is that by doing so, many of your best prospects are qualified out at an early stage, rather than nurtured and developed over time.
Agency Client Retention
The adage that it is five times more expensive to win new customers than is it is to retain existing ones applies equally to agencies, as it does to their customers.
The reality is that overwhelming majority of B2B telemarketing and lead generation agencies don’t offer a pay per lead model.
Agencies succeed by retaining clients, not by winning business they can’t keep.
Lead Generation Is Challenging
There is no point in pretending that lead generation for B2B business isn’t often frustrating, complex or challenging.
But the impacts of getting it right are significant – top and bottom line growth, through feeding your sales team with genuine sales opportunities that they can convert into profitable new customers.
Simple, Measurable, Effective
These are 3 words often used by our clients to describe Beanstalk.
We don’t claim to have a magic wand, or to be able to create short cuts to long term value.
But we’ve grown on the success we have delivered to our clients. So, if lead generation is a challenge or a priority, and you want an agency that understands that lead quality is as important as lead quantity then get in touch. We’ll share our experience in generating leads with prospects similar to yours, and outline a realistic program to help you achieve your lead generation objectives.