Hi everyone - I operate a B2B digital engagement marketing agency. Normally my charges would include fees for consulting hours / services, content development, platform rental (marketing automation platform) and platform operation.
Recently a potential client in the tech sector asked me if i'd be willing to charge on a per lead basis - something i'd never considered doing before. I see pros and cons to this approach and was wondering if anyone had any experience with this and what worked out to be better.
If you have experience with this beyond "what would Google charge for this and this is what i'd charge per lead" i would get on a call and hear your thoughts!
All the best,
Charging per lead shows that you are setting your pricing based on the value you bring to clients, and that you are willing to put a personal stake in getting them results.
Interesting well it has happened some times even with me as well and we didn't go further and restricted it to 600 because it's a waste of time on our efforts since we run marketing automation.
let me know if you need some help with marketing automation platform
I run in a similar space (lead generation for law firms) and the options for partnership are similar despite the deal size. You basically have (from least to most involvement):
1. Set up only
2. Retainer for service
3. Pay Per Lead
4. Commission on closed business
5. Equity ownership
I also get offers for pay per lead arrangements regularly, and have also paid for services to generate leads for my own business in the past. Here are the challenges I see with the model.
1. More demanding on cashflow. My company uses google ad funnels to generate leads but even if you're pure play service you have wages to take care of before you're seeing money. Much more challenging to take on a client like this.
2. Very high touch. I consider myself a pretty easy customer with most things. When I was paying $XX per lead for emails generated, I became very aware of the quality of each individual lead. If someone responded 'k' and that was forwarded to me with the same enthusiasm as 'yes I'm interested let's book some time to talk', I wasn't too happy. I would get in touch with the lead generator and say that's not a lead I want to pay for.
You're setting yourself up to be questioned on every lead if this is the case. Also, due to point #1 you're also in the hole financially when this happens.
With a retainer it's easier to look at things on aggregate and accept the bell curve of lead quality that will come in a given billing cycle.
3. Lack of commitment. In my experience clients are seeking arrangements like this because they don't have the budget to commit to a retainer which almost always has more upside. You could spend a lot of time and money on a client that has none and will never have any.
That's why I don't do pay per lead. Hope this helps!