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Who doesn’t love shiny things? And when you’re tasked with achieving specific lead goals or targets, investing in a B2B lead generation agency can look like a very shiny thing. 

But paying for an agency is no small investment. For some organizations—and working with some lead gen agencies—that investment pans out. Other businesses may end up pouring money down the drain. 

So how do you know which side of the coin you’re on? We’ll walk you through the pros and cons of working with a B2B lead generation agency, introduce you to a few different cost and subscription models, and we’ll even help you with an escape plan if you’re already working with an agency but need a way out. 

If at the end of it all you realize a lead generation agency may not be the best fit for you, we’ve got a few ideas that might better suit your needs.

If the goal is to light a spark in your sales funnel and get leads as fast as possible, working with a lead generation agency isn’t a bad idea. The only thing to keep in mind is that lead gen agency tactics can be difficult—and expensive—to scale, as the cost directly increases the larger your goals or targets become. 

Another important factor to consider is lead quality. You don’t just want to treat your lead goal like a vanity metric. The priority should be drawing in leads that will convert to paying customers.  Agencies can’t always guarantee lead quality, so whether or not you need to invest in building a lead gen or sales dev team is an important consideration.

Working with a lead generation team can be beneficial in many ways, and fits into many strategic plans. Having said that, it’s important to weigh the cost and eventual outcome, and consider how an agency fits into the overall direction of your organization.

How Much Do Lead Generation Agencies Cost?

Pricing models vary depending on the service offering, and the type of agency you’re looking to work with. There are a few key pricing models that appear frequently in the market:

  1. Cost-per-lead
  2. Cost-per-opportunity
  3. Cost-per-activity

Cost per Lead

Cost-per-lead agencies will charge organizations based on how many leads they deliver in a given time period (often monthly, or quarterly). This can look like leads delivered as a CSV file uploaded into a customer relationship management platform like Salesforce, or if a direct integration is possible, leads funneled directly to the sales team as they come in. 

Cost-per-lead can be a great option for an organization that has a pre-existing sales development or business development team, as they have the capacity and skills required to convert these leads to opportunities.

Cost per Opportunity

Cost-per-opportunity agencies skip lead generation or lead development completely, and deliver booked meetings and opportunities directly to an Account Executive. This completely bypasses the need for a sales or biz dev team. However, what you save in cost with a business dev team, is made up for in the cost per opportunity. 

Cost-per-opp is generally the most expensive pricing model or service in the lead generation agency market, as they are driving direct sales opportunities, and delivering contacts that express buying intent.

Cost per Activity

If you’re hiring an agency that charges on a cost-per-activity model, you are essentially hiring an outsourced business development team. Activities include prospecting, emailing, and making cold-calls on your organization's behalf. They serve as an extension of your marketing and sales teams, and operate as if they were within your organization. 

This model can be great for a team who has developed certain marketing resources, and wants to test outbound sales and marketing. This can also be quite expensive, as there is often a monthly retainer involved.

Important factors to consider when selecting an agency is whether or not the cost outweighs your products average contract value, or average lifetime value of a customer. 

Lead or opportunity quality is never guaranteed, and the cost remains the same whether leads are good or bad. As a result,  it’s important to forecast how many leads you might have to pay for before you see a closed deal.

How Do I Get Out of Working with an Agency?

While you don’t want to enter a business relationship expecting it to fail,  having an escape plan is important when working with an agency. Important things to consider include:

  1. What are the terms of your contract? 
  2. What data, materials, or resources has the agency developed on your behalf?
  3. Do you get to keep the database of leads or contacts they sent your way?

For the most part, whatever an agency develops or obtains on your behalf is considered your material when you part ways. Having said that, it’s important to take these things into consideration before you start the relationship, so that you can ensure to protect whatever data, or resources should be rightfully yours.

Other Options for B2B Lead Generation

If after going through this article you’re beginning to question whether or not a lead generation agency makes sense for you, fear not. You have other options that may better suit your organization's go-to-market strategy. Organic marketing, and inbound marketing are great, scalable options for companies who want to partner with a growth and digital marketing agency. 

Working with a growth agency often focuses on developing SEO analytics, and keyword research, so that articles and resources can be developed in order to drive more traffic to your website. 

If the market is looking for something specific, or searching for something specific, a growth marketing agency can help position your platform or product as the best solution to solve their problems. A growth marketing agency often generates leads that are engaged, want to know more, and are expressing some sort of interest or buying intent. 

The main priority with growth agencies is to create, and execute strategies that are scalable, and will lead to exponential growth. Investing in a partnership with a Growth team comes with a cost that is scalable, as they will continuously create articles and content in order to convert you new customers.

Lead Generation Agency or Growth Agency?

Working with a lead generation agency is an important, and expensive decision. While it may make sense for some, it may not work well for others, and with these tips and suggestions, you can move forward with confidence that your decision is best for you.

Lead generation agencies often come with a monthly retainer, and include a cost-per-lead or cost-per-opportunity pricing model. While a great option, this may not necessarily lead to scalable growth and longevity, but it can get your sales team off the ground. 

The other option is to prioritize profitable marketing efforts, and build the foundation for more scalable growth. If this sounds like you, get in touch with us, and the team here at Lean Labs would be happy to help guide you in achieving that growth for your organization.

Post by Admin
March 08, 2023

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