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Is Paying for Lead Generation Worth It?

Although lead generation has become a popular strategy for businesses to grow their clientele, it can be an overwhelming and costly venture that leaves many companies wondering – is paying for lead generation worth it?

Is lead generation business profitable?

The proof is in the statistics when determining whether or not the lead generation business is profitable. By the end of this year, lead generation spending is projected to reach $3.24 billion. As lead generation becomes an increasingly popular way for businesses to attract new customers, more and more lead generation companies are trying to get a piece of those profits, especially since outsourcing business-to-business (b2B) lead generation increases results by 43% as compared to relying on internal teams. 

Is it hard to start a lead generation business?

With the number of lead generation companies steadily increasing, it can be hard to start a lead generation business. If you are going to do so, you need to come up with lead generation business ideas that focus on fulfilling a specific need or target a niche market in order to set yourself apart from the competition. A lead generation business model example that has been very successful is HomeAdvisor, which is a website that generates leads for home service professionals in exchange for a fee. Over half of marketers struggle with generating leads, so providing lead generation services to others can be profitable if it’s something you can do differently and do well.

Is it worth it to pay for leads?

Paying for leads and lead generation can seem like a costly expense, but you have to consider its effect on boosting awareness of your brand and growing your business. Though at first glance it may seem somewhat counterintuitive, when it comes to leads, quality is far greater than quantity. While it may seem like you’re getting more bang for your buck if you pay for 1,000 cold leads versus 500 warm leads, cold calls statistically only have a 2% success rate whereas the conversion rate of warm leads is around 15%. If you can obtain leads that are genuinely interested in your business and what you have to offer, paying for leads is definitely worth the money. In fact, a LinkedIn article highlights research that found that companies that nurture leads effectively make 50% more sales but spend 33% less than on non-nurtured leads.

How much should you pay for lead generation?

The sky’s the limit when it comes to lead generation costs. Very limited basic tools and software are available at no cost, but many of these may be more time and trouble than they are worth. More complex, comprehensive lead generation options are available, but they can cost your company several thousand dollars a month. How much someone should pay for lead generation is determined by several things. Many variables can affect the cost of lead generation, including industry, type of business and its offering, and size of the company, but HubSpot found that, on average, the cost per lead is $198.44 across all industries. It is imperative that companies consider their needs and goals for lead generation and management before investing money in a bunch of costly programs. Utilize free trials to determine which has the features that best fulfill your needs, and make sure to continuously evaluate the costs compared to your return on investment (ROI).


Factors such as industry, product and service offerings, type of business, company size, and, of course, budget should all be taken into consideration to determine what type of lead generation is best for your business and how much you are willing and able to pay for that service. While many businesses have found that outsourcing lead generation is more successful and more cost effective, ultimately, you have to decide if paying for lead generation is worth it for your company.