Hiring A B2B Lead Generation Agency: 8 Pros And Cons
“Let’s buy some leads” is one of the most dangerous sentences in the marketing world.
Here are the facts: every business struggles with leads at a certain point. It’s only natural to seek out a fast solution to get an influx of new eyes on your business.
Your business needs leads, and you’re looking for a cost-effective and profitable solution. So, reaching out to a B2B lead generation agency might be on your to-do list.
After at least a decade of working with B2B companies, we can confidently say that hiring a B2B lead generation agency frequently complicates a B2B company’s situation rather than simplifying it. If you’re interested in the advantages and disadvantages of hiring an agency for your lead generation, you’re in the right place. In this article, we’ll review the pros and cons of hiring a B2B lead generation agency and the reasons behind each.
The Pros and Cons of Hiring A B2B Lead Generation Agency
There are several differences between a B2B lead generation agency and other growth marketing solutions. Let’s go over the types of lead generation agencies we’re referencing.
A lead generation company generates leads to then sell to one or more buyers. Typically lead generation companies make the most when they sell lead lists to many buyers. The lists that aren’t sold to B2B companies yet get picked up by lead aggregators. These lead aggregators are another resource for B2B companies to buy from. Other agencies are considered lead generation agencies, such as advertising and media companies.
In this article, we’ll go over the reasons why hiring a B2B lead generation agency can help your company and the ways an agency can hurt your company. We’ll also review our alternative recommendations that will lead to profitable lead generation.
Pro: New Sources of Leads Coming Your Way
Increasing your brand awareness is an excellent step in the right direction. Brand awareness is one of the most powerful drivers of your brand’s narrative. Without an influx of brand awareness, even if your conversion funnel is set up correctly, your company won’t convert as many people.
By making more connections, you’re increasing your likelihood of finding more customers. The critical thing to keep in mind is if the leads are qualified leads and nurtured.
Con: The Ethical Dilemma of Agencies
Once you get leads from a lead generation agency, their job is done.
They get paid no matter the results. The typical lead generation agency’s responsibility stops there. This business model is great for them! Not so great for you, unfortunately.
The ethical dilemma of a B2B lead generation agency centers around the fact that you could buy an entire lead list, get your marketing and sales teams to work, and still not profitably convert many leads. This is a common problem in the online marketing and sales industry. We see it all the time, agencies are paid for their services no matter the results, and the rest is up to your team.
An alternative to this situation is working with a growth marketing company that sees projects and lead generation all the way through, improving the process as they go.
Pro: Buying Leads is a Quick Solution
Buying leads or lead lists is a fast way to get a bunch of eyes on your business. Having an influx of new people for your sales department to contact means your sales staff is wasting less time finding cold leads. Usually, without an inbound lead generation strategy, salespeople have to find leads, and cold call them with barely any info. Once a lead list comes to a salesperson, they’re able to skip the search.
When buying a lead list from an agency, the key is to have your website set up and address your buyer’s journey. If your website answers your leads’ essential questions while addressing their fears, wants, problems, and goals - then you’re able to get more people who are genuinely interested in your website content and business.
Buying lead lists from agencies often is the first move for companies who don’t have a marketing plan or marketing team to handle their lead generation.
Con: Quantity Over Quality
Wow - 1000 leads ready to be called or emailed? It sounds like a huge win! That’s a ton of potential clients.
The next question to ask is - how many of these leads are qualified and ready to make the next move?
There are two main types of qualified leads: Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs). MQLs are likely to be interested in your business based on an action they take. An MQL action could be a webinar or lead magnet offer, for example. When it comes to SQLs, you should consider them ready to buy. They’ve gathered enough information to make their decision, they’re in your target market, and they’re ready to go.
When hiring a B2B lead generation agency, you might get details about the leads’ interests. You might know that they’re in the market for your service but haven’t decided yet. You might just know that they are the type of person you’re looking to attract to your business. If you’re going to buy leads, you should only buy MQLs or SQLs.
The problem is that you’re taking someone who is possibly in the MQL or SQL stage for someone else’s business. You’re also hoping that this lead list is reasonably recent and that these leads haven’t made a purchasing decision recently.
Pro: Access To Lead Generation Professionals
Depending on the type of B2B lead generation agency you hire, you may have access to lead generation professionals to help your overall marketing and sales process.
Although this isn’t typical for lead generation agencies, we’ve seen some agencies offer it before. This usually looks like a lead generation consultant that helps onboard your team with the new lead lists and even helps you through the conversion process. If you’re going to opt-in for a lead generation agency, we recommend working with a team that specializes in B2B and who can see your project entirely through until conversion.
Con: Non-Exclusive Leads
Out of all the problems with hiring a B2B lead generation agency, this one takes the cake. As discussed earlier, lead generation agencies are looking to profit the most from their lead generation strategies. This usually means either selling one list for a premium price to a company like yourself with the promise of exclusivity or selling that one list to you and your competitors.
This concept is discussed thoroughly in the book Blue Ocean Strategy. When your business is constantly battling for leads’ attention with your competitors, your water is bloody with the competition. This is referred to as the red ocean. The blue ocean strategy is an uncontested and unbloodied space, where your solution is a new, unique approach with no competition.
When using a lead list or cold lead generation strategies, you end up in the red ocean. When you and your competitors have the same lead lists, it becomes a race to the finish: Who can capture their attention first? Who can convert them the fastest? Who can offer the cheapest rates?
An alternative solution to ending up in the red ocean is to create thought leadership in your company and different brand positioning. This process will help attract leads to your blog because you’re answering their questions and building trust by nurturing them.
Pro: No More Cold Calling
Yay! No more cold calls! (Maybe…)
Depending on the type of lead generation agency you hire and the type of lead lists they provide, you may be getting leads that have already been warmed up or nurtured to some extent. Maybe these leads have opted into a webinar somewhere or downloaded a particular e-book, or attended a specific conference.
Even though they might be “warm” leads or MQLs, they might not know about you. This puts you at a disadvantage to your competitors that have already reached out to that lead, but there is a bright side. This also allows you to do some brand positioning (similar to the blue ocean strategy) and position your business as the unique, new solution to their problems.
Con: Lack of Conversion Strategies
Hiring a B2B lead generation agency means their responsibility stops at the end of a lead list. No matter the outcome of those leads or your sales efforts, that lead list purchase is still out-of-pocket for you.
Lead nurturing and conversion strategies are essential to convert awareness into revenue. Without a proven framework, accomplishing both lead nurturing and a conversion strategy or funnel, conversion becomes fairly tricky. Instead of the traditional marketing funnel, we at Lean Labs use the six levers of growth.
The six levers of growth are a great way to examine how impactful brand awareness, lead acquisition, and lead activation are to your revenue. Our clients find this graphic helpful because you can visualize how your leads are navigating and interacting with your business.
BONUS & The B2B Lead Generation Agency Alternative
The one thing we haven’t mentioned yet is the potential for low profitability with lead generation agencies.
B2B business owners usually come to us after they’ve gone through a couple of rounds of lead generation agencies. This usually happens because they’re looking for a more targeted, profitable way to attract qualified candidates to them and cut out chasing after leads. Working with an inbound growth marketing agency can help improve the conversion and productivity of your sales team by only giving them qualified leads and help your marketing team attract more qualified website visitors.
Now that you know the pros and cons of hiring a B2B lead generation agency, let’s review the bonus resources we have available for you to dive into. Check out our Lead Generation Resource Pack and our mini-video series that walks you through how B2B companies attract qualified leads profitably.
Samantha is a Growth Marketer at Lean Labs, working with brands to ignite their growth engine through conceptualizing, implementing, and optimizing growth marketing strategies.