A company can make a sale only if it has sufficient leads in its pocket. The list of leads represents the sales pipeline of a company. Lead generation means attracting every customer who expresses or once expressed, the potential to purchase a product or service from the company.

The process can take a toll on a company hence, it is often recommended to outsource lead generation services. This happens to be the best way of saving the ultimate cost and channeling all the resources in converting the leads instead of generating them.

The cost of lead generation services depends on various factors. Some of them include the number of leads you want, the quality of leads you want, and the kind of tools that are being deployed to generate leads. This constitutes a part of the hidden charges that no one generally shares.

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The Working

In this article, we will review the kind and calculation of cost that is involved in generating leads for future sales. We will also attempt to review a few tools that add to the lead generation cost.

Per Lead

Per Lead is the basic type of lead generation cost. It implies that the cost is charged for every lead that is generated by the agency or the company.

This further has two categories namely Total Cost Per Lead and Average Cost Per Lead. The total cost can be identified by calculating the overall amount spent in generating leads for the company. The average cost, on the other hand, can be calculated by dividing the total amount spent on a campaign by the total number of leads generated.

Even though the cost for the healthcare and IT industry is known to be very expensive, the overall impression is that the per lead cost is always cost-effective, especially if your products are worth purchasing with a great value for money.

Ad Placement

The type of advertisement that is placed in the market affects the overall cost of lead generation. The traditional method involved setting up banners at different places in a region. This has changed as everyone has shifted to the virtual world.

The concept of ad placement now refers to where you place your ad on a social media platform. Instagram, for example, gives the option to run your ad as a story or as a post. You can choose to run your ad in both forms as well. The final cost changes accordingly. This applies to other social media platforms also with Facebook giving an option to either promote your page or a single post.

It is recommended to integrate your ad campaign with an instant form, something that the users can access to provide you with the details. The automobile industry utilizes this feature by offering a free test drive to select users. Ad placement is a crucial part of the sales solution of the automobile industry.


Companies ignore the cost involved in offering a reward to people to be a part of the lead sheet.

The chances are that leads are generated only after giving them certain incentives. Letting a few people keep the demo product for free is one such example. Another example is offering a huge discount to a select number of people. This enables the company to get the details of the majority of the people while rewarding only a few of them.

Every demo product that is offered for free constitutes a part of lead generation. The method normally works with a small group of people. The task is undertaken by an outbound lead generation company. Such leads are then shared with different companies based on their preferences. The cost is ultimately invoiced to the companies seeking leads for their future sales.

Purchasing A List

A third party remains on the lookout to collect the basic information about people. The basic information includes name, email, and contact number. Some additional pieces of information that may be included are their interests and hobbies.

Social Media companies are known to possess a huge amount of relevant data. They analyze the activities of their users to make them a part of their database. Based on their analysis, the social media companies allow the companies to run their ad campaigns. A list acquired through a third party may require further validation. You may also need to conduct a bit of research to review the quality of the leads.

A business process outsourcing company takes the responsibility to verify the leads by making outbound calls. The feedback is then shared with the company; however, the cost once involved in acquiring the list remains under the category of expenses.

Email Tool

Many providers offer tools to collect the email addresses of the users. These are categorized based on the preferences of the users.

You only have to enter the details about the audiences that you want to reach to get their email addresses. The details are often related to the number, location, gender, age, and profession of the target audiences. Such tools may or may not be available for free. Many lead generation companies generally offer such services as a part of their premium package.

Such tools also allow you to send automated emails to the potential leads with a follow-up email, in case the potential lead does not respond to the primary email.

Final Words

Before you venture out to acquire more leads, ensure that your team members are well-equipped to assist all the leads. Also, review the resources that your company has to serve all the leads to convert them into customers.

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