A Guide to Understanding the Cost of Lead Generation

A Guide to Understanding the Cost of Lead Generation
Article by DesignRush DesignRush
Last Updated: November 19, 2022

“How much does lead generation cost?”

As a marketer, this is an important question to ask yourself, as lead generation is the lifeblood of any business.

Your company's ROI will correlate directly to how much you invest in lead generation and how much value it brings to your business.

Without high-quality prospects coming in the door, your sales team will go broke quickly.

Read this guide to understand the cost of lead generation and some crucial factors that impact each cost metric so that you can invest in the most effective techniques.

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What are the Factors that Affect the Cost of Lead Generation?

Lead generation is finding clients through online marketing efforts, such as advertising on social media or creating landing pages for leads.

It's a crucial part of any marketing campaign. It allows you to generate leads that increase the number of customers you have, which will raise your bottom line.

However, lead generation components can be expensive, especially when your budget is small.

Lead generation services cost will depend on several factors, including:

  • Management Fees: As a business owner, you already have a good idea of how much time and effort it takes to find and manage potential customers via traditional marketing channels like advertising or social media ads. The cost is reflected in their fees based on how many leads they produce per month or quarter.
  • Content Production and Promotion: To generate leads, you must create content that people will find interesting, helpful, and valuable. This can be done through blog posts, social media posts, podcasts, videos, and other forms of content.
  • Software: Many businesses think they can save money by using their software instead of paying for an outside agency's help with lead generation. Using software from an agency is usually more cost-effective because it allows them to scale up quickly whenever necessary while providing technical support if something goes wrong.
  • Audience: The cost of lead generation is determined by the number of leads you want to generate, as well as the type of leads you want to generate. For example, if you are looking for an extensive campaign, it may cost more than just trying to reach out to existing customers and keep them updated.
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Types of Lead Generation Cost

1. Email Finder Tools

Email finders allow you to generate lists of email addresses automatically. They typically utilize a list of email addresses collected from other sources.

The list is then used to send emails to individuals interested in your product or service.

There are several available options for finding email addresses, such as:

  • Snov: $0 - $738+ per month
  • Hunter: $0 - $499+ per month
  • Aeroleads: Up to $499 per month
  • Skrapp: $0 - $299 per month
  • Find that Lead: $0 - $399 per month
  • Prospect: $79 per month
  • VoilaNorbert: $0 - $499 per month
  • RocketReach: $0 - $2,388 per year
  • Nymeria: $39 - $159 per month
  • Lusha: $0 - $199 per month

2. Ads Placement & Distribution

Advertising and marketing campaigns are great ways to promote your products, services, and brand.

They can be effective in driving leads to your website or call to action, especially if you find the right audience for your ads.

You can run ads on various platforms, including social media platforms, websites, and apps.

Ads placement and distribution are different activities that can be done at once or separately depending on your goals.

Ad placement involves paying external sources (e.g., Facebook and LinkedIn) for the right to place ads on their platforms.

Meanwhile, ad distribution involves paying them directly for their services.

3. List Purchase

List purchases are direct mailing lists that are purchased from third-party companies. These companies sell their client lists to businesses looking for ways to generate more leads and sales.

If you buy a list of 100 names, you should expect to pay between 15 and 40 cents per name.

Database sales can be similar to real estate transactions, typically involving purchasing a database at a set price.

For instance, List Source and Data Discovery are marketplace sales, which involve setting a price based on the number of contacts, titles, industries, etc.

While some marketers believe purchasing lists can be a bad practice as some may be invalid, it can be an alternative for small organizations. All you need to do is cross-check for the credibility of your sources.

4. Agencies

If you cannot find an in-house team to lead your marketing and lead generation efforts, you can hire an agency to do it for you.

Agencies provide services such as lead generation, call tracking systems, landing pages, email automation tools, and social media management services, among many others.

The cost will depend on factors such as the size of the company, the number of team members, their previous experience, and their expertise.

But typically, the cost of hiring an agency for lead generation varies from $25 - $150+ per hour.

5. Campaign Creation

Once you have all the leads in your funnel, it’s time to focus on converting them into customers.

The best way to do this is to create a marketing campaign that focuses on one product or service at a time. 88% of B2B marketers use content marketing to generate leads.

This campaign includes:

  • Researching keyword data to find the right audience for your content
  • Developing a strategy for your campaign
  • Creation of an email campaign or SMS/text message outreach
  • Creating content that's optimized for search engines and attracts the right people to read it (this includes writing, editing, and publishing)
  • Testing and iterating on the campaign's copy and design until it is fully optimized for conversion rates and ROI
  • Operating and maintaining that website or landing page

The cost of campaign creation can be as low as $9 per month for an email service provider alone and as high as $12,000 per month for outsourcing.

6. Incentives

These are rewards such as discounts or gifts that encourage customers to take action on your products or services.

These promotions entice customers to click on an ad campaign or get involved with a sales funnel.

This will allow you to get your foot in the door and get the prospect to give you their contact information.

Once you have their information, you can convert them into leads and customers. Remember that any incentive you offer must be readily available to anyone who signs up for it. You can't promise something exclusive only to specific prospects.

Most Common Lead Generation Pricing Structures

Retainer ($3,000 - $10,000 per month)

The retainer is a payment plan that includes advertising and lead generation services.

The retainer model is ideal for companies focusing primarily on lead generation while leaving their advertising campaigns more flexible.

This is because the retainer model allows you the freedom to decide how much of your budget goes toward paid search and how much goes toward display ads.

Cost Per Appointment ($150 – $350)

This model charges you based on the number of appointments you make and the time your customer spends on your website.

Many companies use this model because it gives them an easy way to calculate their costs without tracking every sale individually or figuring out how long each sale takes.

Cost Per Lead ($40 – $190 per lead)

Cost per lead (CPL) is a common term used to describe the cost of generating a new customer or lead.

The CPL is the amount a B2B lead generation company charges to generate a new customer or lead.

This method is used when an organization wants to maximize its leads, but only wants to spend a little bit of time or money on them.

This pricing structure is based on the number of leads generated and the cost of each lead. The cost per lead will vary from $40 - $190 per lead depending on the type and how valuable it is.

How to Calculate Your CPL?

One of the most important metrics you can use to measure the success of your digital marketing program is the cost per lead.

This is the amount you spend on a digital marketing program, divided by the number of leads that come from that program.

CPL = Total cost spend / Number of leads

For instance, if you spent $1,000 on an ad and it converted 50 people, your CPL is $20.

CPL = $1,000 / 50 = $20

The goal is to find out how much it costs to acquire a lead, so that you can compare it to other options and decide what works best for your company.

It also lets you see if your return on investment is increasing over time, which will help you decide about what types of resources to allocate in the future.

Best Lead Generation Agencies to Hire and Reduce Costs With

1. EmailMiners

  • Location: S.NO.65, Handewadi Rd, Pune, Maharashtra, Pune, 411028, India
  • Average Hourly Rate: $20/hr
  • Expertise: Lead Generation, B2B Digital Marketing, Digital Strategy, Appointment Setting, Email Marketing, Digital Marketing for Start-ups, Social Media Marketing, Small Business Consulting, Business Consulting, Outsourcing Software Development, Software Development, Mobile App Development.

Based out of India, EmailMiners is a B2B Lead Generation agency specializing in digital marketing, digital strategy, email marketing, social media marketing, software development and mobile app development (among others).

First opening its doors in 2020, EmailMiners has since helped its clients fill their calendars to the brim by applying its expert knowledge in Sniper Targeted Prospecting, LinkedIn Lead Generation System, & Cold Email Machine. Allow them to handle all your outbound email lead generation and sales and to build large prospect lists for your specific industry trends and target market.

Some of EmailMiners most notable clients include Amazon, BoardBooKit and Coding Lab.

Cost of Lead Generation: Conclusion

If you're a B2B marketer, you know you can't have a robust lead generation process without excellent leads. But to get those leads, you need to invest time and money in lead generation activities.

While the return on investment of these activities is not directly measurable, you still need to understand how much lead generation costs to optimize their processes moving forward.

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