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Growth Marketing

How The Best B2B Lead Generation Companies Price Their Services

Written by Ryan Scott / April 3, 2018

is the Head of Marketing at Lean Labs. His experience ranges from higher education to SMBs and tech startups. When not doing digital marketing, he's sure to be enjoying some kind of nerdy pastime.

There are a lot of options if you want to get leads.

What you end up paying for these leads will vary on just about as big a scale. Regardless of the price, not all lead generation companies are created equal.

I want to start this article with a stern warning: paying for leads can be dangerous, especially if you plan on marketing to these leads. Buying leads from a provider, and loading them into your lead nurturing software, like HubSpot, breaks the terms of service, and can result in your email functionality being removed.

With that said, there are some lead generation companies that are legitimate. So, I’ll assume you will do your homework and only work with companies that generate leads ethically. Still, there’s the question of how they will price their services, and what you should expect to pay.

In this article, we’ll look at some pricing models lead generation companies use, and talk about the pros and cons of each model.

Lead Generation Services and Pricing

2 Things to Avoid

When you start shopping for lead generation services, you'll see a pricing range as wide as the Milky Way. That's because "lead" is a broad term today, and these firms mean different things when they use that term.

Cheap, unqualified lead generation companies come in two flavors.

  1. Lead Generation Software - This is software which you run to mine sources like LinkedIn for people with the right job title at the right kind of company. These sources usually range from $100 to $1,000 per month.
  2. Cheapo Contact Miners - This is similar to Lead Gen Software, but the company runs the searches for you and delivers a list of contacts. If you see a price of $5 per lead, or lower, this is the kind of company you're looking at.

The reason you want to avoid these companies is because they're not actually "leads." They're cold contacts that haven’t shown any interest in your company, service, or product.

We get contacted by companies using these types of services all the time. They do their best to sound like they are contacting us one at a time, but it’s easy to spot when you get a cold mass email.

My go-to action when I get these, is to mark as spam!

Notice what I said? I flag every one of them as spam.

If I do it, I’m sure a lot of other people do it, too. This is why this is not a long-term strategy - enough spam complaints, and your email provider will shut you down.

Two Common Lead Generation Pricing Models

In contrast to the options above, there are companies which use a variety of methods to make the first set of contacts for you. In this case, the contacts provided are qualified leads, and the leads have expressed some kind of interest in your product or service. Because the lead generation company has evaluated their interest and the contact has indicated an interest in more information, they can be considered a real lead.

Per Appointment Billing

Appointment billing lead generation services price their services in the range of $50 to $400 per appointment. The advantage of this arrangement is that you're paying for actual meetings with leads instead of paying for the lead generation company’s time and hoping you get enough appointments to make it worthwhile.

Per Month Billing

Some lead generation companies price their services in the range of $2,000 to $20,000 per month. These companies deliver appointments with qualified leads, not cold contacts. The advantage here is that you can budget for a fixed cost, and you could potentially end up getting better value than with a Per Appointment billing company.

Should You Buy Leads?

The problem with lead generation companies, for the most part, is that they are temporary. You might get the leads, but you’re not attracting the leads - the company is. When you stop paying, you stop getting leads.

Think of lead generation as a pipeline. When you pay a lead generation company to deliver leads, you're renting their pipeline and having them turn the faucet on. When you stop paying them, they turn the faucet off. In this case, the cash you shell out for these services is not a long-term asset. The benefits don't live on after the cash is expended.

Now, what happens if the lead generation company decided to increase their prices? You have to either pay more, or get less. And, that very thing is happening, as industries get more competitive.

A Better Long-Term Alternative

Rather than buying leads, why not build a lead generating engine of your own?

The upside is that you own the source of the leads, so you control the price per lead, to an extent. And, the money you invest in building the engine can pay dividends multiple times over, rather than one-off purchases of leads.

The downside is that it takes a lot of work, and most companies are used to paying for leads and calling it a day. They don’t have the infrastructure or human capital to build a lead generation engine.

That’s why you should consider hiring a marketing agency to build it for you. But, just like lead generation companies, marketing agencies have a wide range of pricing models as well.

Since we're on the topic of pricing models, we can show you how digital marketing agencies price their services with a free eBook. The conventional models are Fixed, Hourly, and Value, but we'll give you the inside scoop on a fourth model which we've found to deliver the highest ROI for your business. Lean-Labs_Price-wars

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