PART 1 — How Much To Charge For Lead Generation? [In-Depth Analysis Of 100+ Lead Generation Agencies]

There’s tons of information online on many aspects of starting a lead generation business. Client retention strategies? Yes. Lead generation strategies? Yes. Lead generation channels? Yes.

But when it comes to pricing info, people become a bit tight-lipped.

Maybe, that’s because existing lead generation companies don’t want to share a vital component of their competitive advantages. Or maybe it’s because money is still a bit taboo as a topic.

Either way, we’re blowing the lid on lead generation pricing.

We’ve analyzed the pricing strategies of over 100 lead generation agencies, and in this article, we’ll share our findings with you.

Here’s a brief breakdown of the structure of this article:

And here’s a summary for those who want to skip to the good parts:

TL;DR

• Lead generation agencies use four popular pricing models:
• Cost per lead pricing
• Cost per appointment pricing
• Bulk data pricing
• Retainer-based pricing
• Our analysis of over 100 lead generation agencies shows that retainer-based pricing and cost per lead pricing are the two most popular models.
• The average cost per lead is $198, and the average cost per appointment ranges from $150 to $250.
• Retainers typically cost between $3,000 and $20,000 per month.
• Lead generation agency owners should think outside the box when it comes to lead generation. LinkedIn is often overlooked, and considering that it’s responsible for 70% of B2B social media leads, it shouldn’t be. Expandi can help you scale LinkedIn outreach. Try Expandi with a 7-day free trial.

Our methodology

To prepare for this article, we analyzed the pricing strategies of over 100 lead generation agencies. That analysis included:

• Speaking to employees, CFOs, and CEOs
• Obtaining quotes
• Analyzing publicly-available pricing data
• Doing the math to uncover profit margins and total overhead costs

We also read over 20,000 words of content and listened to five hours of podcasts on lead generation.

Now, don’t worry — we don’t intend to bore you with every single one of our findings.

Instead, we’ve summarized the most important information in this article. We’ve also severely limited the scope of this article to just lead generation costs and pricing.

We do have more insights to share, however, so we recommend that you read these three articles as well:

1. How To Start a Lead Generation Business? [Takeaways From Lead Gen. Agencies Doing Over $200m in Revenue Combined]
2. Lead Generation Website — How To Capture as Many Leads on Your Website as Possible
3. Lead Generation Processes, SOPs, and Frameworks From The World’s Best Companies

The most common lead generation pricing models

The most important thing we learned — hands down — was that most lead generation agencies don’t reinvent the wheel with their pricing.

And while using the same pricing strategy as many of your competitors is kinda lame, there is logic to it. Namely:

• Clients know exactly what to expect (and transparency is very important to lead generation clients)
• You don’t have to waste time explaining your pricing model in-depth
• It’s easier for agency owners to compare their margins to other agencies
• It’s easier for your management and finance teams

From our research, we discovered that the majority of lead generation agencies use one of these four pricing models:

Cost per lead

Cost per lead is a very effective pricing model because clients only pay for actual, real leads. We’ve noticed this model is also very approachable for clients who are new to lead generation because they can easily justify the cost.

Here’s how it works:

1. You work out how much it costs to obtain a lead for a client. Then, you add a profit margin and arrive at a “per lead” price. Typically, this price ranges from $30 to $400 per lead (industry dependent).
2. You enter into an agreement with the new client.
3. You get the client leads.
4. The client pays you for those leads.

Cost per appointment

This pricing model only applies to agencies that help clients schedule demos or sales appointments for their leads — though many of these agencies offer cost-per-lead services as well.

Here’s how it works:

1. You determine how much it costs to get a single appointment for a client. Then, you work in a profit margin and arrive at a “per appointment” price.
2. You enter into an agreement with a client.
3. You get the client appointments, and the client pays you for each appointment (regardless of the outcome, of course).

Your “per appointment” price should ideally be higher than your “per lead” price because leads who make an appointment are lower down in the sales funnel (and thus, they are higher quality).

Bulk data purchasing

This pricing model is for agencies that offer clients leads from a pre-existing database.

Here’s how it works:

1. You collect contact information (name, phone number, email address, etc.) from hundreds to thousands of potential customers.
2. You determine the cost of collecting this information and add in a profit margin. Let’s say, for example, this figure is $1,830,000.
3. You divide this total figure ($1,830,000) by your projected number of clients (let’s say, for example, 450). In this example, that gives you $4067.
4. You charge clients $4067 for a list of leads.

Typically, agencies charge less for bulk data purchasing because the leads are very low quality. Thus, they’ll have a low conversion rate.

Retainer

This is the most popular form of pricing by far.

This pricing model is for agencies that do ongoing lead generation work for clients. Typically, these contracts last from three months to two years.

Here’s how it works:

1. You determine the cost of one month’s worth of work for a client and add in a profit margin.
2. You enter into an agreement with the client.
3. You complete one month’s worth of work for the client.
4. They pay you the monthly fee (either in advance or at the end of the month).

Agencies that use this model offer Search Engine Optimization (SEO), traffic-driving activities, sales funnel building, analytics and results monitoring, and lead scraping, generation, and nurturing.

Typically, the “per month” cost is between $3000 and $20,000.

What is the average cost per lead and cost per appointment?

Data from the DeTorres Group shows that the average sales price differs by industry, company size, company revenue, and marketing channel.

Overall, it’s $198 per lead.

Here’s a breakdown by industry…

And by company size…

Company size (by the number of employees)Cost per lead2–50$14751–200$180201–1000$2121000+$349

By company revenue…

Company size (by revenue)Cost per leadUnder $1 million$166$1 million — $10 million$185$10 million — $500 million$179$500 million+$429

And by the B2B channel used:

Lead generation channelLowest possible cost per leadHighest possible cost per leadSEO$30$175Pay Per Click (PPC)$40$150Content creation$80$300Display advertising$65$85Webinars$50$110Video marketing$175$225Public relations$300$400LinkedIn$75$125

The average cost per appointment ranges from $150 to $250.

Now, the “average” figure might not be the best price for you to charge. You should take into account the age/reputation of your agency, the quality of your leads, and your clients.

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5 examples of lead generation pricing from leading companies

To prepare for this article, we looked at pricing information for over 100 lead generation agencies.

If we went through them one by one, however, this article would be a pretty monotonous read.

So instead, we’re going to focus on five agencies that we believe represent the rest fairly well.

Without further ado…

For a deep dive into best practises of pricing from the world top 5 leading lead generation agency and other key factors to consider — continue here.

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