Ask any sales organisation what they think of the quality of their third-party leads, and more often than not the answer will be ‘lackluster.’ But is the less than enthusiastic response really warranted?
It’s absolutely true that low quality leads can mean wasted sales rep time and decreased productivity, as well as lower close rates. Why, then, do fast-growing companies report a higher reliance on purchased leads? What do they know that you don’t?
Let’s take a look.
Contrary to popular wisdom, companies are telling us that purchased leads can and do yield favorable results. In fact, Velocify’s newest study, Lead Trends Report found that high-growth companies (those with more than 20% annual growth) are relying more heavily on purchased leads than any other lead source. Purchased leads account for a higher percentage of total volume for higher growth companies, regardless of company size.
You get what you pay for
But why are high growth companies more successful with purchased leads than companies experiencing less growth? Their responses show that the adage ‘you get what you pay for’ rings true when it comes to the quality of purchased leads. Fast-growing companies are more willing to invest more per lead to get high quality than are most other companies. The average spend reported by all lead buyers was $42 per lead but companies with significant revenue growth spend $86 per lead.
Another difference is that high-growth companies regularly and frequently re-assess the performance of their lead sources.
The study found that high-growth companies are 125% more likely than flat/declining companies to evaluate new lead providers at least quarterly. This is a strong indication that these companies have disciplined processes in place for measuring lead source KPIs and a willingness to change up their marketing program to optimise performance. In contrast, some flat or declining businesses even go a few years without evaluating new lead providers—a practice not reported by high-growth companies.
The good news is that many companies are also bullish on high-quality purchased leads (live transfer and/or exclusive leads), with almost half (45%) stating they plan to increase investment in high-quality leads in the next year.
Before diving into purchased leads here are a few pro tips to consider to ensure you are getting the most out of your purchased leads:
1. Follow up as soon as you get the lead
Ensure you have a way to automate lead capture into a lead management system that can distribute the leads within seconds to an available rep. Speed is critical when responding to purchased leads. The Ultimate Guide to Inquiry Response shows that conversion rates more than double when leads are called in under one minute.
2. Be persistent
Process and strategy are equally as important to success as speed-to-contact. Make sure you are not only following up fast, but also persisting beyond the first few contact attempts with multiple channels of communication.
3. Prepare for duplicate leads
Understand the policy for duplicate leads going into a relationship with a new lead provider and have a way to report back to your lead provider when you receive duplicates.
4. Frequently monitor key performance indicators (KPIs)
Take time each day, or at least each week, to better understand the quality of leads you are purchasing. Track KPIs like contact rate, qualification rate, and conversion rate and adjust your spend accordingly.
5. Meet regularly with lead providers
Keep an open dialogue with lead providers by meeting monthly, or at least quarterly, so you can tweak your program to meet lead generation needs.
Clearly, purchased leads are more of a staple in the marketing diet than common wisdom would suggest. Though generating a high volume of leads from free (or near free) lead sources like referral and web channels is a good strategy, our findings show the value of purchased leads cannot be ignored.
By Jorge Jeffery, Director, Research and Analytics, Velocify. Jorge joined Velocify in 2011 and has been instrumental in mining data from the more than 1,500 sales teams that leverage Velocify's solutions today. Insights gleaned help establish best practices for Velocify clients in order to maximise revenue potential.