How Much Should You Pay For B2B Lead Generation? [Formula Explained]

February 16, 2024

ViB Editorial Team

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Are you having trouble figuring out how much to pay for B2B lead generation? There’s a ton of information online on various aspects of B2B lead generation. But when it comes to how much to pay for lead generation, the answers are all a bit vague.🤔

This is a problem for many marketers, especially those just starting out.

When you don’t know how much a B2B lead costs, it can wreak havoc with your budgeting and marketing spend. 

That’s where this blog comes in where I will help you figure out what to pay for lead generation. I will also discuss the factors that affect pricing and how to calculate lead generation costs.

So, without further ado, let’s get to it!

How much do B2B lead generation services cost?

If you go by this HubSpot study, the average cost for B2B leads is around $200. However, this number can vary by tens of dollars (or even hundreds of dollars, in some cases!) depending on the quality of the B2B lead.

To give you a more precise answer, the average B2B pay for performance lead generation service is around 1-3% of the fee of your product or services.

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Suppose that the average sales volume is 20,000. In this case, your estimated cost per lead will be 1% to 3% * 20,000 = $200 and $600. So, if you target 100 leads during a year, your cost of lead generation will be between $20,000 and $60,000.

I advise my clients to budget at the higher end to ensure they have a comfortable financial cushion.

It’s better to plan for unexpected expenses than be caught off guard!

Pay for performance lead generation vs. traditional lead generation

The pay-for-performance model has become popular quickly because it is more cost-effective than the traditional lead generation model.

I suggest going for pay-for-performance lead generation. This way, you only pay based on the effectiveness of your marketing campaign. The pay for performance lead generation model prevents wasted budget and helps streamline the amount you pay for lead generation.

The B2B pay for performance model can be pretty helpful for startups and smaller companies operating under a limited budget. 

For example, SaaS (Software as a Service) companies often employ the pay-for-performance lead generation model to minimize lead generation costs.

The lead generation costing approach matches fees with the delivered outcomes. You only pay for leads that meet specific predefined criteria like signing up for a free trial, requesting a demo, or completing a purchase.

So, the B2B pay for performance model offers a great value for money-saving lead generation costs.

How much should you pay for lead generation?

Depending on the type of leads you want (appointments, attendees, downloads, etc), a lead generation company can charge anywhere from less than $50 to more than $3000.

I wish there was a more clear-cut answer to this question. The thing is, every business operates in a different industry, which can affect the overall cost of getting leads.

To complicate matters further, specialists, C-suite executives, and other high-quality audiences demand a higher B2B lead generation cost.

So, let’s unravel how much to pay for lead generation. 🔍

3 factors affecting the cost of your leads

I always tell my clients to know the factors that affect lead-generation tactics. Understanding the factors that influence the cost of lead generation will help you budget effectively.

So let’s look at some of them:

1. Lead quality

Remember that the complexity of your target audience impacts the cost of lead generation.

If you’re targeting niche industries or highly specialized professionals, you may need to invest more to reach them effectively.

The costs will also vary depending on the type of leads, as mentioned in the image below.

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Additionally, B2B lead generation often incurs higher costs due to the intricate nature of business-to-business transactions. The complexity arises from:

  • Extended sales cycles
  • Multiple decision-makers, and
  • Customized solutions tailored to each client’s needs.

2. Level of competition

Another factor that affects the cost of lead generation is the level of competition. If your competitors actively invest in lead generation, you may need to adjust your budget to remain competitive.

With more businesses targeting the same audience, the demand for leads increases.

Higher competition leads to bidding wars.

This means you’ll have to pay more per click or impression, increasing your overall cost per lead.

3. Geographic targeting

The geographic scope of your target audience can impact lead generation costs. Your lead generation service might charge you higher if you want to target a broader geographic area. This can be due to localized marketing efforts, translation services, or expansion into new markets.

However, focusing on a specific region may result in more efficient use of resources. This can lower your overall B2B lead generation costs.

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    Tip: Pay for quality (don't fall for cheap B2B lead generation)

    If I could give one tip… Don’t always opt for a B2B lead generation company solely based on a low cost! Remember, quality comes at a price.

    A too-good-to-be-true low price often indicates low-quality leads.

    Conversely, if a company is charging a premium for demand generation services, it’s crucial to delve deeper with the following questions.

    Questions to ask if you’re quoted a premium price:

    • How much experience do you have in generating leads?
     
    • Can you guarantee the provision of qualified leads?
     
    • Will the leads you provide be exclusive to me or shared with competitors?
     
    • Have you nurtured the leads before passing them on?
     
    • Are the leads tailored to my target audience
     
    • What strategies do you employ to ensure lead quality and relevance?
     
    • How do you handle lead verification and screening processes?
     
    • Can you provide examples of successful lead generation campaigns you’ve executed in the past?
     
    • What measures do you have in place to adapt to changing market dynamics for lead generation?
     
    • How do you track and report on lead generation performance and success metrics?
     
    • What level of transparency can I expect in terms of lead sources and methodologies used in your lead generation process?
    Making an informed decision when evaluating the right B2B lead agency doesn’t have to be rocket science. Get the one-page checklist of the 15 must-ask questions, to cover all your bases, easily.

    Essentially, selecting the right B2B lead generation company is pivotal for the success of your sales pipeline. 🚀

    Be meticulous in your selection process; quality, experience, and a tailored approach are fundamental.

    Remember, the ideal partner acts as an extension of your team, ensuring the leads delivered pave the way for fruitful sales conversations and conversions. 

    Engage with a provider who not only promises but also proves their capacity to connect you with high-quality prospects.  Your diligence in this process will be the difference between merely filling your pipeline and genuinely enriching it with potential customers ready for engagement.

    How much does ViB's B2B lead generation approach cost you?

    At ViB, we keep our costs 50% lower than other reputable lead generation companies. We do this by offering mutual value to our clients and our millions-strong ViB Community.

    We use a leads-as-a-service approach.

    For example, for our pay per download service, we don’t just post the syndicated content on our platform for a fixed price. Instead, we actively promote this content to our community of high-tech professionals who are already seeking such offerings.

    The interested professionals are then delivered to the client as leads. And since they are already warmed up, it reduces the sales cycle. This makes it that much easier for clients to convert them to sales.

    Get started with affordable pay per lead generation

    To receive a personalized pay for lead generation solution quote that fits your specific needs, connect with our friendly reps today.

    Screenshot of ViB trial options - B2B email marketing, B2B appointment setting, B2B content syndication

    Want to test our unique approach to B2B demand generation with a low cost trial?

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