Why legitimate lead generation is so expensive

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Why legitimate lead generation is so expensive

If you've been reading through a decent amount of my discussions, you'll probably know that I had lead generation services.  This is because it's extremely difficult to tell who runs a legitimate service and who is simply scraping emails from websites and calling them "Hot leads."  I've worked with my fair share of lead generation services, some good and some bad, and the results were I would lose money or break even at the very best.

I know some people that put in the time to generate leads and others who scrape, package, and ship a customer their order without doing any other work, which is sad.  Genuine leads cost a lot more because of the work that has to go into warming them up and getting them to convert later.

Cold leads are ok, Warm leads are amazing
If you've ever done cold lead outreach, you'll know that they're ok, but you're not expecting much.  A cold lead is when you contact someone and pitch them your services in hopes they'll sign up.  This person has never heard of you and likely wasn't looking for something you're selling, but you pitch to them anyway.  A warm lead is someone that has shown interest in your services and would like to talk further about what you can do for them, and these leads are amazing.

Cold leads are ok if you're not paying more than $1.00 for them, and warm leads are amazing if you can get them for under $100 lol.  Yes, a warm lead is worth so much more than a cold lead because it takes time to warm them up.  Think about it; you could go through 1,000 pitches and get ten people that are interested, how much do you think you could sell those ten leads for?  How long did it take you to go through those 1,000 pitches?  Yeah, this is why legitimate lead generation is much more expensive than someone who is simply scraping emails and sending them to you.

Finding the right lead takes time
A great lead generation service isn't going to send you leads that have never heard about you.  They're going to talk to these leads about your services, what you've done for other websites, show them examples of your work, and pretty much do everything they can until it's time to bring you into the conversation and agree on a price for them to pay.

Someone who is generating cold leads, but saying they're Exclusive, is still going to charge you at least $15 for the lead even if it's just an email, and the person has never heard about you or shown interest.  This is the type of lead service that is rampant out there, and they are getting sales because they always tell people "30% of our exclusive leads close for at least $1,500 per month," which is total garbage. 

I've approached these SEO lead generation services and said

I'll give you $500 for each lead that signs up for my services
Their response was always
Well, we can give you a discount on our 50 lead package and you only have to pay $500 instead of the normal $750
This only proves that their leads are complete garbage because if 1/3 of their leads turn into clients, then they could get about $8,500 from me if they accepted my offer, and everything was legitimate, but they would rather settle for $500 lol.

Research is everything when it comes to leads
You won't get amazing leads for $5, $10, or even $15 a piece because the time that goes into this type of service is massive.  Sure, you could find some services that have a system in place that finds clients in need of your services, and they sell those leads for a fraction of what they could get, but those services are like finding digital unicorns because they're very elusive.

It could take you a full day or even a week to get a great lead on board, and that's typically the average if you're running any digital service like I am.  I can get 30 clients in a month, but I'll get a few big clients that take much longer to close on because they need more information.  If someone were to say "I have a list of whale clients looking for an SEO service and I'll sell it to you for $100," I would tell them they're crazy.  I would be enticed because of the potential, but I would know those leads are likely horrible and resold 100's of times before.

Legitimate high quality leads take time.

Final Thoughts,
If you're going to work with a lead generation service, be sure to do your homework.  Don't overpay for cold leads and never trust someone that says your leads are exclusive.  The main reason I wrote this discussion is because I've been burnt plenty of times by lead generation services, and I know they're enticing.  You need to understand that lead generation takes time, it takes an understanding of how everything works, and there aren't many systems out there that will be able to help you.  For this reason, I decided to start setting up my lead generation service because of all the bad ones out there.  I want people to be able to get actual leads, leads that have heard about their services or websites, and leads that are responding to my outreach for the clients that hire me Why legitimate lead generation is so expensive

Thanks for reading Why legitimate lead generation is so expensive

- Tommy


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Thanks for the thorough article. I agree... Cold leads are like shooting in the dark, and suck for establishing a long-term customer base.

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