How important is lead quality when I purchase leads? Well it is very important but the real question is how much are you willing to pay for lead quality?
There are essentially five lead characteristics that a company buying leads needs to consider. These characteristics have a different value depending on the type of company purchasing the leads.
- Quality of the lead – is it a real buyer, is it targeted to what you sell?
- Quantity of leads – how many leads per day
- Cost per lead – cost per lead or group of leads or cost for specific lead requirements
- Exclusivity – are the leads exclusive or sent out to 3-4 other companies.
- ROI of leads – the cost of all leads purchased divided by revenue from the leads closed
One additional parameter in picking a good lead source is the companies service for example; return policy, background info on the lead origin, real human customer service etc.
There are many types of companies buying leads and therefore different types of lead companies catering to them. We can simplify most lead buyers into two categories, big companies and small companies. Here are some of the characteristics of these companies.
Small companies – could be a 1-10 person shop. They have a limited budget and lack sales resources. Small companies are very concerned about quality of the lead. They can not buy that many and often do not purchase enough leads to truly average enough to calculate their ROI. They usually want high quality leads sometimes exclusive leads and will pay more for them since it is more efficient for them to call fewer leads to close a deal.
Large company – usually have 10 – 100’s of sales people eager to make calls on leads. Have the financial resources to buy a lot of leads and negotiate group lead costs. Understand law of averages to calculate ROI. Can afford extra expenses on testing new leads. Large companies want a lot of leads to feed their sales machine. They will relax quality standards over having their sales people sitting around twiddling there thumbs. But they expect to pay less for leads since they are buying more leads that have a lower quality. In the end the leads have to pass their ROI standards to continue doing business.
Here are some guidelines if you are a small company looking to buy leads:
- Understand the lead return policies
- Ask where the leads are coming from, call center, email, white papers, web sites. If possible ask for examples.
- Ask how the leads are qualified? Do the call them, if they call them do the ask qualifying questions like budget and project time line? Are they scrubbed with other data to make sure the address and phone number and name match?
- Is there a minimum, number of leads that need to be purchased, is there a monthly or annual fee above and beyond the lead costs?
The bottom line is you will have to jump in and try the leads out. Keep a log of the calls you make for each lead. You can use this log if there are problems with the leads. Most lead companies will work something out and a good lead company will want to know if they are selling bad leads. Not closing a lead could also be the sales persons fault. A lead not closing due to competition, price etc. compared to never contacting the prospect are two different issues. Try enough leads to make sure you can get a good average at least 100 leads.