Lead generation companies will have a variety of ways to calculate their fees. And as lead generation is one of the most difficult problems for a business to solve, there can be a wide difference between the strategies, skills and knowledge to generate a sales lead or enquiry and the quality of the subsequent leads produced. So how much do lead generation companies charge?
The lead generation charges highlighted in this blog are indicative and are based on owning and running a full service lead generation agency for nearly 20 years. Like any professional service, you can pay higher, you can pay lower and you usually get what you pay for. A lead generation company could be a one-person sole trader operating out of their back bedroom, with a couple of years’ experience, or a global operation hiring thousands of employees, and everything in-between. For the sake of this exercise, the assumption is that it’s a small to medium sized lead generation company or agency working for a small to medium sized business.
Every successful company needs to systemise the process of finding new customers and it usually starts with lead generation. It’s one of the hardest problems a business will need to solve and whether you are doing lead generation in-house or using a lead generation company, the process requires knowledge and expertise which is usually the result of thousands of hours of training, testing, measuring and learning.
So how much do lead generation companies actually charge?
Some lead generation companies will charge by results, others will charge by inputs, others will charge by outputs and results:
Below is a list of the most common ways lead generation companies charge:
- By named contact: the output/deliverable is usually a list of cold data.
- By the hour: most telemarketing companies will work this way. The input/deliverable will be based on dials or calls or decision maker conversations. Most however, will charge by the hour, regardless of the results.
- Some lead generation companies will charge per lead. They are usually un-nurtured, cold leads at the top of the sales funnel. These lead generation companies will invariably share the leads generated with multiple customers to keep the cost of the lead low. These leads will be lower in price, and the quality and conversion rates will also be low. Expect to pay between £40 and £150 for these types of lead.
- Some lead generation companies will charge a monthly fee, (regardless of results). Fees will range from £1000 to over £5000/month depending on the niche and complexity.
- A few lead generation companies will be prepared to charge a discounted fee plus a commission on all sales generated.
- You may also come across a few lead generation companies who offer ‘grow together plans’ where the lead generation companies increase the fee with each new significant customer win/order.
Proven lead generation companies will know the annual and lifetime value of a new key account and the professional ones will focus on the rhythmic acquisition of these for their clients. See case study here.
When establishing how much do lead generation companies charge, we need to compare apples with apples; we need to define what a lead is and the typical costs a lead generation company might charge. We also need to distinguish between inbound and outbound leads and qualified and unqualified leads.
How Much Do Inbound Lead Generation Companies Charge?
Inbound leads are generated by passive activities such as SEO, social media and online advertising campaigns and are typically generated from digital marketing activities. Most digital agencies will offer plans starting at £1000-£2000/month, but charges can easily be higher, as the average hourly rate for a London based digital marketing agency is £105, so a campaign that requires an hour a day (5 hours per working week) will likely cost £27,300 per annum. 2 hours a day would cost £54,300.
Inbound lead generation agencies that offer a monthly fee-based service will map out the actions and processes to streamline and automate areas of the process such as reporting.
Search engine optimisation (SEO) campaigns will typically cost between £750 a month and £3000 for an SME. Fees will vary depending on whether agency generated content marketing, and digital PR links are required to deliver results for the campaign. Corporate organisations will likely invest a lot more.
How Much Do Outbound Lead Generation Companies Charge?
Outbound leads are generated from proactive outreach activities and are usually generated by finding a potential customer and reaching out to them to start a conversation. Both strategies have their place in a B2B campaign, but the latter will usually generate potential to work with key accounts
There are a number of different lead types, depending on where the prospect sits in the lead generation funnel. These are:
- Information Qualified Lead (IQL) at the start of the buyer’s journey where they are seeking information related to their search query. They will typically ask for information in exchange for their email address, and this occurs at the Top of the Sales Funnel (TOFU). Some people refer to them as cold leads.
- Marketing Qualified Leads (MQL) are Middle of the Sales Funnel (MOFU) leads, where a prospect expresses an interest to explore solutions after receiving initial information. Some people refer to them as warm leads.
- Sales Qualified Leads (SQL) are Bottom of the Sales Funnel (BOFU) leads and are when the budget holder wants to move forward. Some people refer to them as hot leads.
Here is a list of what some lead generation companies define as a ‘lead’
- Lead costs for purchased data. This is cold data that hasn’t been contacted; the leads are unqualified and un-nurtured. A lead generation agency might charge anything from £0.25 to £2 per cold contact depending on the data source. The main issue here is the contact still needs to be contacted, educated and nurtured before becoming a high-quality lead.
- Lead costs from SEO. These contacts are mostly at the top of the sales funnel (TOFU) and usually seeking information. Monthly SEO fees can range from a few hundred to many thousands of pounds depending on the size of the website, the number of keywords selected, the keyword competition, whether the competition is local, national or global and how fast you want to climb up the rankings. A web designer might charge a few hundred pounds to £1000/month to do technical SEO, whilst a marketing or SEO agency will also run audits, complete regular competitor research, add content creation, blog writing and backlink development. Expect to pay anything between £500 and £4000 for monthly content generation and PR. For an SME with a 10-20 page website and a long term outlook, a typical SEO plan will cost between £1000 and £3000/month and should generate consistent progress providing the agency has a good strategy and are completing regular audits, reports and the resulting technical, on-page and off-site activities required for success. If you need further advice on B2B SEO, please reach out to our B2B SEO team here at Stratique. Typical lead generation costs for Search engine optimisation are between £1000 and £2000 a month.
- Leads from social media. Top of the funnel leads from social media may indicate some interest in your product or service, but they may just be click-curious, a competitor or a marketing company trying to sell you something! Monthly social media fees can range from a few hundred to several thousands of pounds depending on the inputs required to generate engagement. In our experience organic social media activities are good for brand awareness but are not as effective as marketing directly to properly targeted prospects. Having said that, you could strike it lucky! Typical lead generation costs for social media marketing: £295-£2000 a month depending on how much engagement and content creation is required.
- Leads from LinkedIn. Top and middle of funnel. They may be interested in your services, but they may just be curious. They may also wish to connect with you just to pitch their products/services to you.
- Leads from cold calling: Top and middle of the sales funnel. Leads from cold calling should be well qualified with a decision maker. They may, however, not have a budget and they may have an incumbent supplier in place with no desire to move. In our experience these prospects need to be educated, nurtured and followed up rhythmically before placing a large order.
- Business development ready enquiries: A few agencies offer a virtual BDM service. At Stratique, over the past 15 years we have perfected a process to generate 5-star qualified B2B leads following a well-defined process. We have shared the process here to help you to understand the best lead generation process available. After initial contact on LinkedIn or from a cold call, (or from our digital marketing activities) our team properly qualifies the prospect. Then the prospect is asked if they would like to receive information that will help them solve a ‘pain-point’. Prospects who say yes are added to a multi touchpoint multimedia campaign to educate and nurture them. We establish their pain points and offer your potential solutions. They will receive several pieces of information from LinkedIn, be directed to carefully crafted website landing pages, receive telephone calls, emails and direct mail and when they are ready, they will wish to have a serious conversation about their problem/requirements. We call these hot leads/5-star enquiries. Fees range from £1k to £4k a month.