Understanding the Pay Per Lead Model in B2B for Sales

July 26, 2023

ViB Editorial Team

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As a sales leader, you understand the importance of setting appointments with qualified leads in order to close deals and drive revenue. 

But in the B2B technology industry, generating appointment-ready leads is a resource-intensive business.

Done in-house, it can require weeks of lead nurturing and a significant investment in sales staff resources. 

That’s why companies from Fortune 500s to small businesses hire agencies specialized in B2B appointment setting services to generate sales leads and set up meetings with them. 

Outsourcing appointment setting to a lead generation agency allows your sales team to spend less of their valuable time chasing leads that are unlikely to pan out. This means they can spend more time talking directly with qualified leads. This is a huge benefit for any company. 

But not all appointment setting companies are created equal. Choosing the right lead generation agency means making several critical decisions, including choosing between a fee-for-service and pay-per-lead pricing model. Making the right choice requires knowing the differences of the two models. 

Here is a breakdown of the advantages and disadvantages, what questions to ask your B2B appointment setting service provider, and ways you can make sure that they are maximizing their return on investment when providing services for your company.

Graph of different fee fir service versus pay for performance appointment setting services models

Fee-for-service pricing model

In the fee-for-service pricing model, B2B appointment setting companies charge a fixed rate for a specific scope of work they provide. The fee is based on agreed-upon criteria you determine together with them, and may be calculated on an hourly, project, or retainer basis.

  • Hourly fee-for-service model: agencies set hourly rates for their services, and clients pay for the number of hours being worked on the project
  • Project fee-for-service model: the provider quotes a fixed price for the entire project, and the client pays this fixed price, typically regardless of the number of hours put into the project.
  • Retainer fee-for-service model: the client pays a set fee upfront for a specific period of time. The provider then works on a variety of tasks or projects for the client during this period. The fee may be based on the number of hours worked or the scope of work.
 

Many vendors that use a fee-for-service pricing model charge for the time they spend on delivering the service. This is similar to the common pricing model for outsourcing SDRs. Companies pay the sales rep or team to execute a lead generation calling plan.

Pros of the fee-for-service pricing model:

  1. Predictable costs: You’ll know exactly how much you will be paying upfront, which can help with budgeting and forecasting.
  2. Control over scope: Because you pay for a service, you can focus your project to suit your needs and goals. For example, if prospecting research is more important than cold calling, then you can assign work accordingly.
  3. Flexibility: You have the flexibility to adjust the scope of work as needed, and as you go, which can be beneficial if your needs or goals change over time.
 

Cons of the fee-for-service pricing model:

  1. Risk of poor results: The provider is typically paid for the work that they do, rather than for the results that they achieve, which can be a trade off. You may not see the desired results, which can be frustrating and costly. 
  2. Limited incentives for the provider: There may be limited incentives for the provider to go above and beyond since they’re not tied to results. This can result in lower quality work or less value being delivered to the client.

Pay-per-lead (aka pay-per-appointment) model

Also known as pay-per-appointment or pay-for-performance, the pay-per-lead pricing model means that the appointment setting service provider charges a fee for each lead that is generated as part of their service.

In other words, pay-per-lead generation companies only charge when either an appointment is set up for their sales team or actually held, regardless of how much time is spent on sourcing the leads.

The fee or cost per lead is also typically based on the type of leads you ask for, as well as the difficulty of generating them. So there’s still some wiggle room when negotiating prices. 

Pros of the pay-per-lead model:

  1. Assured results: The best thing about this model is that you are only paying for appointments delivered—which makes it more straightforward when negotiating and extending contracts.
  2. Flexible volume adjustments: Most appointment setting vendors under this model will allow you to determine the number of appointments you want — you may set a fixed number, or minimum number, or shoot for as many leads as possible within a time frame. This makes it easy to fit their program with your sales process and hit monthly quotas.
  3. More incentives for the provider: With a pay-per-lead model, the provider has an incentive to generate high-quality leads, which can lead to better results for you.
 

Cons of the pay-per-lead model:

  1. Less control over scope: Because the focus is on the end result of generating leads rather than a specific set of activities, you’ll have limited influence on the actual process of generating appointments. That’s why it’s important to evaluate the provider carefully before settling on a contract.
  2. ‘Too good to be true’: Some agencies might sacrifice quality for volume, especially if they’re trying to sign you up for a longer-term contract that you can’t back out of. To spot this red flag, look for prices that are too low — such as under $50 per lead. And make sure you have some flexibility to replace leads if appointments don’t go well.

“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.”

How much does pay per appointment lead generation cost?

The cost per lead in the pay-per-lead model for B2B appointment setting varies anywhere from \$50 to over \$3000. In general, how much you’re quoted is based on the level of effort and resources required to generate the appointments and the potential value of the sales resulting from the appointments. 

Factors that impact the cost per lead

How qualified the lead is will have the greatest influence on the quoted cost per lead, and your potential ROI if an appointment converts into a sale.

And the best way to measure lead quality is by looking at the appointment setting provider’s 

Appointment setting success metrics to track:

  • Agency’s average lead-to-opportunity conversion rate: Research or request data on the agency’s average lead-to-opportunity conversion rate, which reflects how many of their appointments become viable sales leads for their clients.
  • Agency’s qualitative track record: Consider things like the level of expertise and experience of the team, the quality of their work, their approach to sourcing leads, and their reputation in the industry too. Likewise, it can be helpful to research the agency or provider and to seek references or case studies to get a sense of their track record and capabilities.
 

The quoted cost per lead from your agency is also largely based on your targeting specificity, as it closely determines the quality and relevance of the leads, the difficulty of setting up the appointment, and the likelihood of the appointment resulting in a sale. 

Some examples of targeting specificities that impact the cost per lead include these:

Targeting requirements:

  • Industry: Sourcing for prospects in complex industries, such as cybersecurity software or healthcare, may require more specialized knowledge and resources.
  • Job title: Targeting senior job titles, such as C-level executives or VPs, may be more difficult and time consuming, as these individuals may be harder to reach and likely require personalized outreach.
  • Geography: Narrowing your targeting to specific geographic regions or countries means that the agency has to cater to the specific market conditions, cultural norms, and regulations of that geography.
  • Company size: These could be measured by revenue or employee count, and both determine the type of approaches and resources used to find the respective leads.
  • Decision-making authority: Decision-makers with an authority in the buyer committee are much rarer and hard to find, which will then require more targeted and personalized outreach.
 

Examples of cost per lead per appointment set

Here are some examples of how much an agency can charge for B2B appointment setting, depending on the targeting criteria and methods used:

  • “Managers and above in Fintech” could cost $50-100 per appointment set, from a standard agency
  • “Managers and above in Fintech”, could cost $500 per appointment set, from an agency with a track record of over 40% of appointments converting into opportunities
  • “CXOs, VPs and Directors in cybersecurity software companies in North America” could cost over $3000 per appointment set
 

The pricing model can also include stipulations for meeting guarantees. For example, a company may only pay if an appointment is actually held versus just booked. This is a good option because a booked appointment could result in a no-show, which companies prefer not to pay for.

Thumbnail of B2B Ideal Customer Profile Template ViB
Simplify your targeting strategy with the one-page B2B ideal customer profile template, designed to help you define your best audience and communicate your targeting needs.

How to evaluate a B2B appointment setting service

When you are evaluating B2B appointment setting service providers, the decision between a fee-for-service model and a pay-per-performance model will depend on the specific needs and goals of the company, as well as the resources and capabilities of the marketing or sales team.

Beyond that pricing consideration, here are 4 other considerations to have: the vendor’s experience in your industry, their outreach approach, the quality of their appointments, and their follow up and support.

Choosing a fee-for-service versus a pay-per-lead model:

Here are a few general considerations that may help a company decide which model is best for them:

  • Budget and forecasting: If these are a major concern, a pay-per-performance model will help by providing a straightforward gauge of expected results.
  • Complexity of your industry and targeting: If you’re in a particular niche industry, you might need more control over your vendor. A fee-for-service model may be a better choice here, as it allows the company to specify and control the specific tasks and activities that they want the provider to perform. This helps to prevent brand misrepresentation in the prospecting process
  • Speed and efficiency: A pay-per-performance model is generally simpler and faster than paying based on time worked. We also recommend this option if you’re testing out a pilot program with a new vendor.
  • Team size or available resources: There’s no fixed rule here, but a smaller company or team might prefer a fee-for-service appointment setting agency that operates more like an extension of the team. On the flip side, pay-per-lead models can also be more independent and easier to manage.

See how Jon drove 67x ROI with ViB Appointments

“Almost every lead ViB sent us became a business opportunity, as we hoped it would.”
 
Jon Moody, Director of Demand and Digital Marketing at Abnormal Security

10-question checklist to evaluate a B2B appointment setting company

Note that there are still many other factors you need to consider, regardless of the pricing model the appointment setting company uses. These are factors like risk, process, cost, approach, and consistency. 

Here is a checklist of questions to ask the lead generation agencies to make a more informed choice when choosing an appointment setting service provider to partner with. 

Approach:

Q1: What is your process for generating leads or setting appointments?

Q2: How do you determine the qualification criteria for leads or appointments?

Performance:

Q3: What is your average lead-to-opportunity conversion rate? Can you provide data or examples of past leads or appointments?

Q4: What is your track record and reputation in the industry? Can you provide references or case studies?

Pricing:

Q5: What is your pricing structure and what is included in the cost?

Q6: Can you provide estimates or quotes based on my specific targeting criteria and desired outcomes?

Customer success:

Q7: How do you handle any issues or challenges that may arise during the lead generation or appointment setting process?

Q8: Does your agency absorb the risk of no-shows? 

Q9: What resources and support do you provide to ensure the success of the campaign?

Q10: How long does the setup process take?

Knowing the answers to these critical questions will give you a more realistic view of the actual quality of the service provider before you sign on the dotted line.

🔍 How are B2B marketers approaching generative AI, lead generation and marketing budget allocation today? Check out our latest B2B marketing trends report for the latest stats and strategies you need to know.

Thumbnail of ViB B2B Marketing Trends Report

Discover the latest trends and statistics — and the key actions B2B marketers and leaders need to take today. 

An alternative approach to B2B appointment setting

We’ve been talking pretty consistently about the importance of evaluating how an agency sources for appointments, on top of their pricing model. 

The reality is that most pay-per-appointment and fee-for-service agencies have the same critical drawback — their service model challenges. 

Essentially, regardless of how appointments are priced, the process typically involves three essential steps:

  1. Prospecting phase to search for contact details
  2. Contacting leads to validate through cold calling or email
  3. Passing the appointments over to the client
 

Within these steps lie several risks, including:

  • Poor or less consistent lead quality
  • Misrepresenting your brand, such as by failing to understand your complex technology solutions 
  • Finding ways to cut corners in the process, such as providing less communication and research

A smarter opt-in model with ViB Appointments

This is why at ViB, we’ve transformed the traditional approach of B2B appointment setting. 

Our “opt-in” model allows interested prospects to take the first step in setting up a meeting, which ensures that you get the best leads possible. 

We do this by promoting your solution to our ViB community until we meet your lead guarantee, and then hand over these qualified prospects to schedule a meeting with you, using a risk-free pay-per-lead model.

These key features make ViB Appointments more effective: 

An opt-in model where leads sign up to schedule appointments

In this alternative approach, leads opt in for appointments with solution providers they are interested in. This means there is no call center making cold calls to contacts that tend to have less interest in the solution or might not even have consented to have their information shared. With ViB, leads are self-qualified and ready to buy. 

Qualified community of potential prospects

The ViB community is where we source more engaged and qualified leads than those generated from cold calls. Our community is made up of millions of tech professionals and decision-makers who are clearly segmented, verified as in-market for new technologies, and open to calls and meetings. 

Pay-per-lead model at no risk

ViB offers a pay-per-lead model with no upfront risk, so clients only pay based on meetings held, rather than for meetings scheduled or work performed. Clients also decide the volume of leads required per time frame, which makes it simple to incorporate into any sales process.

Customized landing pages instead of relying on cold calling

In this alternative approach, we work with each client to set up a customized landing page to promote the solution with more accurate and relevant messaging. This is also where leads optin for sales appointments by registering their interest.

Messages are solution-focused and brand-agnostic

Instead of mentioning brands, we focus on the challenges and solutions that your products offer. This allows us to bypass brand biases so that we can attract more clients who are genuinely interested in your solution — and have a higher likelihood of conversion.

3 success stories with B2B appointment setting - pay per appointment

Here’s how three companies gained significant results when they worked with ViB to launch their pay-per-lead appointment setting program. 

Ermetic accelerated growth and boosted opportunity size 

The founders of Ermetic used ViB’s appointment setting service shortly after launching its company in 2018. With only a handful of people covering global sales, the team needed support to scale its business. 

The service delivered twice as many meetings as Ermetic’s small and busy internal team and freeing up sales leaders to build relationships and foster Ermetic’s explosive growth. 

Results included 50% of appointments converting to opportunities, showing a high quality of leads.

Guardicore increased awareness and conversions with ViB’s appointment setting

At the start of COVID-19, Guardicore realized that it could no longer rely on live events to drive the necessary amount of leads for its global sales team. 

To meet the company’s goals of greater product awareness and increased conversions it engaged and launched our appointment setting service. 

The service immediately expanded the company’s reach to qualified audiences and delivered high-quality leads. Among the results was a 60% conversion rate from lead to opportunity.

Turbonomic generated 10x more ROI with appointment setting

Turbonomic was struggling to drive consistent results with its internal SDR team. It had a high SDR turnover rate and faced increasing pressure to scale its sales operations as the company grew. 

The company deployed ViB’s appointment setting service, including framing up specific targeting criteria and qualification logic. The result was 10-times ROI for each closed opportunity

Additional benefits included:

  • Overcoming the challenges associated with SDR turnover
  • Improving the predictability and control of their message
  • Enhancing the demand generation team’s credibility with sales

Explore ViB Appointments today

Get more specifications about ViB Appointments’ pay-per-lead structure with the solution datasheet today. Or schedule a chat with us to see firsthand how impactful it can be to generate high-quality, sales-ready new leads who opt-in to set up appointments with your sales team.

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