The Pros and Cons of Buying Leads For Your Business
Are you looking at buying leads for your business? If so, you might be asking yourself some of these questions:
- What are the pros and cons?
- Are paid leads as good as leads you generate yourself?
- Would a mixture of paid and ‘organic’ leads be a better bet?
Buying Leads: The Pros
If you are considering buying leads for you business, there is no shortage of people who are willing to sell them to you. A quick search on Google will give you over 45 million results.
Lead brokers (i.e. the people who sell leads) come in all shapes and sizes. In short, lead brokers market themselves in general terms. For example, they may advertise to people in search of insurance. They will provide general content and advice, and encourage people to provide their details for someone to follow up on. When people do provide their details, these leads are then sold to businesses that can actually provide the service or product.
Some of these lead generators will be tied to a particular company and others will sell leads to anyone who wants to buy them.
The benefits to you as a business that buys leads are clear. First and foremost you can get leads on demand.
If you know that you can convert 10% of the leads you get into new customers, buying 100 leads should result in 10 new customers. So long as you have done your research, there is no reason that you can’t buy as many leads as you want and grow your business that way.
To buy leads also gives you a fixed cost. If you market your business in the hope of generating your own leads, there are plenty of costs to consider – from creating your marketing and advertising to paying for advertising space, sending out direct mail or using a telemarketing company.
Depending on how good you are at marketing your business, this overall cost for each lead you get can vary. Buying leads can be a great way to build your business with predictable costs and predictable outcomes – once you’ve done some testing, that is.
Buying Leads: The Cons
Of course, buying leads does not come without a few drawbacks – otherwise that’s all anyone would do.
The first consideration is whether the leads you buy are of high enough quality for you to convert them into actual paying customers. If a lead costs you $10 and you convert 10%, then the cost of getting a new customer is $100. But if only 1% become customers, then the real cost is $1000 per new customer.
Before you buy leads you need to find out where the leads are coming from and how qualified they are. You should know what makes a lead a good prospect for your business – when you buy leads you want the best match you can get.
Here are a few more questions to ask before you commit to buying leads:
- How old are the leads? Older leads may have already found the product or service they were looking for.
- Have these leads been sold to any other companies too?
- If they are exclusive to you, is this for a fixed period after which they will be sold to one of my competitors?
- What questions have they been asked? Are they expecting a sales call?
- Does the seller offer any guarantees as to the quality of the leads?
Even if you do get your hands on high-quality leads, there is one major problem that may be difficult to overcome – the prospective customer doesn’t know you or anything about your business. To them you are just another faceless company – exactly the same as all the others. You will need to find ways to set yourself apart from the competition before they are willing to buy your product or service.
Summary
Buying leads can be an effective way to build your business but the quality of leads can vary greatly. So do your homework, test new lead sources in small batches before you make any big commitments, and always follow up with your leads quickly. Of course, developing your own leads through a high-quality lead generation program will usually offer a better long-term solution.
What Next?
- We Do It For You: If you’d like help with buying leads or developing your own, click here for more info about the lead generation services we provide
- Do It Yourself: For more lead generation ideas Download our free report
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