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How to choose a pay-per-lead (lead generation) company

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If your business has seen sales decline in past months, you're not alone.  Our first instinct when cash isn't coming in is usually to cut spending, but the current recession actually presents a great opportunity to create future sales- if you spend wisely on these efforts.  Finding a quality lead generation company can be an especially good investment when the economy is bad. Think about it: most of your competitors are probably figuring out ways to save money and cut back, and advertising is low hanging fruit for company budget cuts.  Using an organized pay-per-lead strategy will give you a head start on sales while allowing you to make sure every dollar spent still has a positive ROI.

A quick search for "lead generation company" produces literally hundreds of results.  How can you separate the best companies from the rest of the pack?  Here are some of the things you should do before choosing one to partner or work with.

  • Lead Quality. Qualified leads should have verified contact information from a real person who remembers requesting price quotes. Ask for an overview of the sources they use to drive the leads (i.e. pay-per-click, organic traffic, or affiliate partnerships). Stay away from co-registration lead sources or incentive-based lead generation unless you are comfortable with the specific campaigns.

 

How is the company verifying the lead? Most companies use automated methods to qualify the leads which can work, but make sure the company has a refund policy in place then if you receive incorrect information.  We often see fax numbers come through as phone numbers which is a dead lead because no one is able to get in touch with the person. The company should call every lead before it is passed on to you, or at least, that is the method we use at Resource Nation. It obviously costs us more, but our businesses that use our service has a higher contact rate and can win the deal.

  • Example form. Ask to see samples of the forms used to gather leads. Forms should be detailed enough collect relevant information, but simple enough that potential leads will fill it out fully. Make sure the form clearly articulates what will happen once the visitor clicks submit. The last thing you want is to contact leads that are not really interested in your product. If the lead will be sold to multiple companies, make sure this is clearly stated in the form so you know how many companies you are competing against.
  • Following up and Best Practices. The lead company is responsible for providing leads from real people who are truly interested in your service. They should NOT be responsible for your ability to close the sale or to even get in touch with the lead. Here are a few tips to win business when using a lead company:

1. Try to contact the lead within minutes of receiving their information if possible.  The first 1-2 companies to contact the lead statistically close more leads than the companies that follow up several hours or even days later. ServiceMagic vendors tend to follow this rule which is why home improvement professionals using their program have success.  

2. If you don't reach the lead on the first try, leave a nice message and follow up immediately with an e-mail.  Make sure to provide information and some high-level pricing in the email.  Do not just send an email telling the lead to call you because your competitors are already calling the lead trying to close the sale. It is your job to track them down. 

3. If you don't receive a response from the lead after you've left a message, implement a system to follow up over a 7-day period.

  • Billing. Lead generation companies are a great marketing source because the ROI is very easy to calculate if you track the results. E.g. If you purchase 10 leads for $10/each, and you close one new customer, you are paying $100 for each new customer. For small businesses and companies just starting out, it is a valuable marketing tactic that still keeps your marketing budget low. If you test out this type of program, make sure you purchase enough leads though to truly understand your ROI. When signing up, ask about set up fees, return policies, and monthly minimums, and volume discounts.

 

All in all, lead generation can be a very cost-effective method to quickly scale your business. And yes, I'm biased!  If you offer a quality service and your sales team can follow up quickly and clearly state your value proposition, lead generation can help grow your business.

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