Pay per lead generation is a performance-based pricing structure used — somewhat rarely — in B2B lead generation. It’s simple; you only pay for the delivery of an actual lead, typically as opposed to paying a flat fee, per set of services or time spent on the project. You can also see it as a tactic to acquire potential customers without paying for advertising impressions or clicks.
There are a few variations, like pay per appointment, and pay per download, and we’ll talk about them in a bit. You get the gist though. Not a “per hour” rate, or “per project” basis. Only a fixed price per qualified lead.
Pay per lead generation companies are the marketing agencies or service providers that offer this model. They set a predetermined fee for each qualified lead or prospect that is delivered, usually upfront.
Let me break it all down for you in this guide. And if you’re already a pro at this concept, feel free to jump straight to the best pay per lead generation companies in tech that are legit (there actually aren’t that many!)
Why is the pay per lead model more important than ever?
You may be thinking – why should this matter to my team? Is it worth researching and evaluating this model?
We surveyed thousands of marketing leaders on the latest B2B marketing trends and found that the two biggest challenges they’re facing this year are exactly around qualified lead generation.
Specifically, 54% of B2B marketers are most challenged with improving lead quality and conversion rates, and 41% with generating more leads.
Plus, around 55% of marketers report barely reaching their targets for leads generated last year. Most stated that the majority of the leads generated were top-of-funnel with basic contact info being the information received – as you know, marketing and sales teams can do little with these leads.
Unlike other lead generation pricing models, the pay-per-lead model is a low-risk, high-reward investment.
Discover the latest trends and statistics — and the key actions B2B marketers and leaders need to take today.
What are some of the greatest benefits of pay per lead models?
Let’s look at some of its benefits.
1 — More control over performance
How many times in marketing do you get what you pay for without hidden fees?
In the pay-per-lead model, you avoid wasting money on empty promises and under-delivering agencies. You only pay for qualified leads, which gives you greater control over your budget and your cost-per-conversion.
For you and your team, that means being able to build a more repeatable B2B marketing strategy. Less feeling burnt out meeting quotas and thinking of new lead generation ideas, more predictable results.
2 — Higher quality leads
On a pay per lead basis, your lead generation partner’s success is dependent on your progress. That means, their success is driven by the effectiveness of their marketing tactics.
But there’s a caveat! We’re referring to pay per qualified lead models specifically.
Reputable lead generation agencies who contractually guarantee qualified leads are motivated to deliver good results. How “qualified” a lead is can be measured by their targeting fit, or even whether they engage with you after the handoff.
So, not only are you guaranteed better leads, but you also increase your lead efficiency and potentially decrease your cost-per-lead.
If your team is new to lead generation, pay-per-lead gives you the confidence to hand over that portion of your strategy to the professionals who provide a level of security with the leads you receive – they ensure the leads are serious and highly motivated to purchase.
3 — You don’t spend money on empty advertising
Hubspot recently reported that B2B companies spend 8.7% of revenue on advertising. If that isn’t shocking enough, digital ad spend is expected to be around $485 million in 2023.
According to Marketing Insider Group, “In WordStream’s analysis of $3 billion in annual PPC ad spend, the average click-through rate is 2.35%. More than 90% of those clicks bounce. So $3 billion gets you a 0.2% chance of finding a new warm lead.”
While we don’t take an inherently pessimistic view of digital advertising (we love it, in fact!), we do believe that most B2B companies struggle to get the ROI they’re looking for. With so many factors at play, ads take multiple rounds of A/B testing and a deep knowledge of Google’s algorithm to reap its full benefits.
With pay per lead lead generation companies, you’ll confidently know every portion of your budget that gets allocated toward it will reap a high ROI.
Now the cons… (insert dramatic music)
Are there cons of pay-per-lead models?
You may be wondering, “Is this too good to be true? What’s the catch?”
While there are cons (as with most things), we’ll show you how to spot them and avoid falling victim to faulty or untrustworthy lead-generation partners.
1 — Leads are shared by multiple clients
Pay Per Lead generation companies that operate in more common or B2C industries (such as Angi, which focuses primarily on home improvement and repair) sometimes provide a large number of leads that overlap across dozens of clients.
That means your competitors have the same leads.
When pay per lead generation companies’ sole focus is on providing leads and ignoring the benefit of qualified leads, they leave clients like yourself with the responsibility of nurturing leads and working them deeper into the sales funnel. You’re now working to build trust with your leads while competing for their attention – where’s the benefit in that?
Effective lead-generation partners will not provide you and your competitors with the same leads list. When working with a reputable company, the leads should choose to come to you rather than the other way around.
2 — Leads may not fit your parameters
This can be one of the biggest frustrations marketers face in pay-per-lead lead generation. When lead gen companies’ mindsets are quantity-first, you’re left with leads that have little need for your product or service.
What’s the point?
You may receive leads within your industry, but they may be lower-level employees, interested in software you don’t even provide — access to decision-makers can be your biggest hurdle.
3 — Data might be non-compliant
Buying only the most compliant B2B lead lists is crucial. You want to be sure that the leads you’re acquiring have opted in or provided consent to receive communications from your business. Non-compliant data can lead to legal issues, fetch costly penalties, and damage your reputation.
With some pay-per-lead providers, there might be a risk of receiving leads whose data collection methods don’t meet legal standards. It’s vital to work with reputable lead-generation partners who prioritize data compliance and adhere to regulations like GDPR or CAN-SPAM Act, depending on your target market.
Remember, while buying lead lists offers many advantages, it’s essential to carefully vet your lead generation partners to ensure you’re getting high-quality, compliant leads that align with your business goals and values.
Variations of the pay-per-lead model
Staying competitive in the B2B tech and SaaS space means operating ahead of the curve. It’s no secret that B2B lead generation companies are the most effective and streamlined way to obtain qualified leads faster than your competitors.
When working with pay per lead generation companies, you may be presented with different pay-per-lead models depending on the service provided and the desired goals — this shouldn’t confuse or overwhelm you.
We’ll walk you through the different models, so you can make informed decisions that lead to the highest ROI for your team.
Model 1: Pay for performance
Pay for performance is the umbrella term referring to a compensation model where a company gets paid by a client based on how well they performed their services.
A pay-for-performance model — and all its subsets — is aimed at providing qualified leads to their clients because their main goal is to provide as much value as possible (aka perform the best).
If you’re evaluating a vendor with this model, remember to clearly define the same KPIs to measure performance.
- Great for smaller companies with lower budgets.
- Can be implemented on a per-project basis.
- Ensures the leads the client receives are quality.
- Can be an overly broad term with different expectations at each agency.
Model 2: Pay per qualified lead
Pay per qualified lead is considered a subset of the pay-for-performance model, zeroed in on the leads most likely to convert. To meet that expectation, pay-per-qualified-lead companies go one step further in vetting your leads before you receive them.
This model usually requires an acceptance threshold, especially when it comes to identifying a client’s target audience. The leads delivered are leads most likely to turn into paying customers.
- Engages decision-makers in your target market.
- Highest likelihood of conversion.
- Each lead must meet a vast set of requirements identified by the client.
- The number of leads captured is smaller.
- Not offered at most lead generation agencies.
Model 3: Pay per appointment
Pay-per-appointment is a pricing model in a B2B appointment setting where a client only pays for leads that have expressed interest and request an appointment — whether it’s a demo, consultation, or casual chat…
The risk to clients is typically even lower because appointment-setting campaigns tend to be mid to bottom-of-funnel services, which means the lead is more qualified.
Pay-per-appointment is a highly effective way to generate more SQLs efficiently and minimize the time through the funnel for your marketing and sales teams. The likelihood of conversion is high.
Within the pay-per-appointment model, there are several subsets:
Pay per appointment scheduled
Pay-per-appointment scheduled is a model where clients only pay for scheduled meetings. Clients pay for every planned appointment, regardless of the likelihood of prospects showing up.
Pay per appointment held
Pay-per-appointment held is a model where the client only pays for successful meetings held. So, if 10 people signed up for meetings but only 2 showed up, you’d only be charged for 2.
Pay per qualified appointment held
The ViB approach.
Unique to the industry, the pay-per-qualified appointment held is a model where the client only pays for successful meetings with prospects that meet the standards that ViB and the client have set.
“ViB delivered what they promised. We were blown away by the quality of the leads, the quality of our meetings, and the high rate of conversions.”
Model 4: Pay per attendee
With the pay-per-attendee model, clients only pay for each person who attends their online event or webinar. Some lead generation companies and services (like ViB Webinars) guarantee a certain number of attendees within your target audience for each event held.
- Saves your team money.
- Guaranteed minimum at every event.
- Increases brand awareness and credibility
- Attendees may not be in your target audience.
- Attendees may not be actively looking for solutions.
Model 5: Pay per download
The pay-per-download model is a unique approach specifically for content syndication marketing. It’s tailored for businesses seeking to distribute valuable content assets, such as whitepapers, ebooks, or research reports, to a wider audience within their target market.
In this model, clients pay based on the number of times their content is downloaded by users. It’s a much more performance-driven model that measures the success of content distribution, by quantifying the audience’s engagement and interest in the provided materials.
Looking for a pay per download content syndication vendor? Try ViB Syndication.
- More measurable content exposure and ROI
- Guaranteed content-driven lead generation.
- Attendees may not be in your target audience.
- Attendees may not be actively looking for solutions.
The pay-per-download model can be a valuable addition to your content marketing strategy, especially when aiming to expand your reach and capture potential leads interested in your industry-specific insights and knowledge.
Model 6: Pay per impression
Although not a pay per lead model, pay-per-impression is a common advertising model worth mentioning. Here, companies charge customers based on how many users have viewed their content.
The pay-per-impression model is much more of a top-of-funnel marketing tactic that increases brand awareness, typically at a low cost. The amount paid per impression is usually very low because the value of the impression isn’t much. These models also promise a large number of “eyes” on your content with little promise any of the viewers are within your target audience.
- Improves website traffic and leaves the door open for more leads.
- The amount paid per impression is low.
- Increases brand awareness.
- Client risk is high.
- No way to track the effectiveness of each campaign.
- Ineffective at solely reaching the target market.
Other common B2B lead generation pricing models
With pay-per-qualified lead models, your lead generation partner typically absorbs part of the natural risk. With risk mostly mitigated, your team can confidently allocate their marketing budget knowing they’ll receive an ROI that meets (and even exceeds) their KPIs.
On the other hand, traditional payment structures may charge fees or commissions without delivering. Let’s take a look at some of the models you should avoid.
Providers will set hourly rates for their services, likely lacking a network of targeted professionals, which leads them to hours of sifting through contact lists and online resources.
Oftentimes, an hourly approach can feel inauthentic and leave a negative impression of your company based on how the lead generation representative presents your company.
A time-based approach puts the relationship you have with your prospects in the hands of an agency, and if they don’t understand the nuances of your target audience, you may have a lower ROI and lower brand perception.
In the pay-per-project model, the client pays for each lead generation campaign rather than promising any qualified leads. Pay-per-project models may underperform because their success isn’t dependent on your growth.
The retainer pricing model for lead generation involves an ongoing, fixed fee paid to a lead generation provider for a set period, typically monthly, in exchange for a continuous flow of leads and associated services.
Most traditional and digital marketing agencies use the retainer-based model because it removes their risk and allows them to add additional services like content creation and social media marketing to their services.
Most B2B tech companies can expect to pay around $2,000-$50,000 monthly and are usually locked into a 3 to 12-month contract.
The most common B2B lead generation pricing models are desirable for the agency and put most of the risk on the client. Unlike conventional services, ViB offers the pay-per-qualified lead model, which not only provides their clients with qualified leads but also ensures they’re reaching their KPIs and getting the highest return on their marketing spend.
Examples of pay per lead generation companies in tech
High-quality leads are easily worth 2-5x the cost it takes to capture them, which is why 79% of marketers’ top priority is to generate more of them (SEMrush).
But, there’s a hangup — finding the right B2B lead generation company that checks all your boxes is daunting, let alone finding a reputable pay per lead generation company.
We’ve compiled a list of some of the most commonly used pay per lead generation companies to make your life (and decision fatigue) a little more manageable.
1 - ViB
ViB isn’t your conventional B2B lead generation company — we’re dedicated to the growth of their clients. Our pay-per-qualified lead model ensures your team is only paying for targeted leads most likely to convert.
We’re in the quality-over-quantity game.
Let’s take a look at some of ViB’s benefits:
2 - Software Advice
Software Advice is a B2B lead generation company focused on connecting software companies to clients looking for their services.
It can take clients around 2 years to purchase software, and most of that time is spent researching and finding software that meets all your clients’ needs. Software Advice has a network of over 1 million users in over 600 software categories.
Let’s take a look at some of their benefits:
- Phone-qualified leads
- Lead is sent directly to your team
- Proven track record of successful campaigns 800K companies helped
3 - Lead Pronto
Lead Pronto is a lead generation company dedicated to delivering both sales-ready leads and influencing a new audience to consider purchasing your product or service.
They cast a wide net across several sectors, serving 13+ clients with over 65K customers. Lead Pronto also prides itself on being fast and free-thinking, taking the time to strategize within “stale” markets.
Let’s take a look at some of their benefits:
- 150 premade digital assets
- Introduce your offerings to new audiences
- Pay-per-lead or retainer based models
- Garnered 700K leads
Whether you’re looking to cast a wide net or looking for a highly curated, qualified lead pool, we recommend finding a partner that works best for you!
Most lead generation companies offer a free trial period, and if you’re interested in understanding your marketing potential without giving the green light just yet, we suggest signing up for a trial here.
How much do companies pay for lead generation?
It’s possible to find an affordable lead generation partner that accomplishes your goals and helps your team build sustainable growth.
According to Marketing Charts, the cost per lead (CPL) for leads within the tech industry is $208 per lead.
To be more precise (since we’re all from different industries), the average demand generation service fees typically come in around 1-3% of the product/service fee, or your average deal size.
Remember: you get what you pay for.
If a company is offering lead generation services at a steep cost, we suggest asking them:
- How long have you been in the industry?
- What type of leads will we be receiving (i.e. qualified or unqualified)
- Are these leads being sent to competitors as well?
- How have you nurtured your audience?
- Are these lead decision makers in my target audience?
Now — the goal is to accelerate growth in your company, right?
But, it’s overwhelming to throw your carefully budgeted money at something you haven’t dipped your toes in yet. So, if you’re looking to see what the impact could look like working with a leading demand generation partner, we suggest signing up for a trial.