Should You Outsource Lead Generation?

Outsourcing lead generation helps automate related activities, improving customer acquisition.

Outsourcing lead generation helps automate related activities, improving customer acquisition.

Word-of-mouth recommendations from trusted peers and colleagues often fuel lead generation in the initial growth stages of small-and-midsize-businesses (SMBs). However, eventually, as companies look to scale, formal lead generation efforts help bring in new potential customers to the business.

Small business marketing or sales leaders consistently weigh the pros and cons of outsourcing lead generation. 

In this article, we will discuss different types of lead generation companies, the benefits of outsourced lead generation, and understand how lead generation companies work.

What is lead generation?

Lead generation is the process of attracting potential customers and prospects to your business. It means creating interest in your products or services and collecting prospect’s contact information, including name, email address, phone number, and job title. Lead generation fills your sales funnel, driving potential buyers into the initial awareness stage of the sales cycle.

Lead generation is crucial for small businesses because it helps drive growth and increase customer acquisition. It offers increased sales opportunities and targeted audience engagement and enables you to build brand awareness. Different lead generation strategies, such as pay-per-click ads and social media advertising, are data-driven tactics that allow marketing leaders to measure results effectively.

What does it mean to outsource lead generation?

While lead generation can add a lot of value to a business’s sales, hiring and maintaining a fully functioning in-house demand generation team can be challenging. Advertising platforms and strategies change quickly, and it’s critical for lead generation strategies to adapt to new regulations, bidding strategies, cookie and privacy changes, and more business dynamics. According to Gartner’s Tech CEOS: 6 Steps to Improve Demand Generation, formal demand generation helps buyer awareness, engagement, and propensity to purchase.^[1]

As a result, many companies look to outsource lead generation, which allows your business to acquire high-quality leads through a third-party agency. A lead generation agency helps fill your sales pipeline with qualified leads through paid social advertising, pay-per-click (PPC) ads, and display ads. A lead generation company works closely with your internal marketing team to learn about your ideal customer profile, sales cycle, and product or service to effectively target and attract your perfect customer.

Types of outsourced lead generation

Depending on your marketing goals and budget, you can leverage different types of leads and lead generation strategies. Here are some that businesses can use to increase their cold leads.

Inbound lead generation

An outsourced lead generation company can focus on inbound lead generation through content creation, search engine optimization (SEO), and social media platforms. This typically takes a lower-budget approach as content is created and posted organically without any paid advertising. For example, an inbound generation might create SEO-optimized top-of-funnel blog content that is easily discoverable and relevant to your ideal buyer.

Outbound lead generation

Outbound lead generation actively goes out and finds leads for your sales pipeline. A lead generation company might do this through cold calling, email marketing, or telemarketing. For example, a lead generation company’s team of sales representatives might call hundreds of potential customers to see if they’re interested in your product or service.

Digital lead generation

Digital lead generation includes popular tactics like PPC ads, lead generation websites, and lead nurturing. These strategies are very tactical and data-driven. For example, lead nurturing involves building relationships with contacts in your sales pipeline, which might mean sending them an email drip with customer success stories to convert them into sales.

Hybrid lead generation

Once you’ve explored more traditional, common types of lead or paid odds, you might want to explore strategies like content syndication, influencer marketing, or lead scoring. Content syndication repurposes valuable content on different websites, putting your business in front of your ideal audience. It helps you reach a wider group of people, and often, the other website will give you a list of qualified leads in return.

Data-driven lead generation

Lead generation is very data-driven, and new advances in marketing automation, lead analytics, and predictive modeling are driving a new era of real-time, omnichannel insights for leads.

Benefits of outsourcing lead generation services

While many businesses begin lead generation in-house, it could be helpful to consider outsourcing it to a full-time agency that specializes in lead generation for your industry. Here are some of the lead generation benefits.

Increased efficiency and scalability

Outsourcing to a lead generation service helps free up internal time and also allows you the ability to scale quickly. Instead of spending weeks or months onboarding new team members, lead generation agencies are ready to start quickly on your behalf.

Cost-effective

Lead generation involves multiple full-time employees, which can quickly add up in terms of resources and costs. Like any full-time employee, there are additional overhead costs to consider, such as insurance, benefits, and hiring costs. With an outsourced lead generation agency, you avoid paying some of these expenses. Plus, you have access to multiple strategic experts. Also, these individuals are learning from other businesses and accounts every day, so you’re getting the benefit of the latest, real-time tactics that work.

Higher lead quality

Depending on your revenue goals, you might have a lofty lead generation number. As businesses scale, it’s difficult to maintain the quality of leads needed while increasing volume. Partnering with an external generation company can help maintain targeted reach, maximize qualification, and improve lead nurturing.

Access to a wider talent pool

A lead generation company also opens your business up to benefit from a specialized, expert talent pool. A lead generation agency might have specific experts focused on ad creation, bidding strategies, technology setup, and more, ensuring you have immediate access to some of the best thought leaders and strategists.

Data-driven insights

Lead generation companies champion a data-driven return on investment (ROI) focus. They are experts at analyzing insights from lead generation platforms, so they can analyze your website, eCommerce store, or other technology tools to bring all these data points together. Their team can benchmark your company’s success versus competitors or comparable companies, helping you get a clear idea of how your lead generation efforts are performing.

Increased ROI

Working with an expert lead generation agency helps increase your Return on Investment (ROI) and boost your efficiency and productivity. A tactical agency can drive highly targeted campaigns to specific audience parameters and monitor data consistently to see what’s working and what’s not. Also, since you aren’t hiring expensive in-house team members, an outsourced agency might be more cost-efficient, ultimately improving your overall ROI.

Cost considerations and ROI on outsourcing lead generation

While outsourcing lead generation can improve ROI, there are some cost considerations. Different agencies might charge different fees associated with ad spending. Some might charge flat retainer monthly fees, others might charge per lead, and it’s important to clearly understand the differences in pricing structures.

Also, when factoring in costs for hiring and employing a third-party agency, businesses need to consider average lead costs and cost per lead. Internal demand generation and advertising teams probably know average costs for leads, click-through rates, and more, and this is invaluable information to deliver to an outsourced lead generation team.

Depending on your specific lead generation tactic, agencies might charge differently. For example, there might be costs to purchase lists, distribute your ads, design your campaigns, or optimize your website. Ask ahead of time what additional fees might be associated based on your agency’s recommendations.

How to select the right lead generation agency for your business

Selecting the right lead generation agency involves seeking recommendations from colleagues and peers and searching for businesses that specialize in your industry. A great way to start is by exploring Capterra’s lead generation agencies directory to start getting proposals and quotes from top lead generation companies. Tons of top agencies are aggregated in one spot, allowing for easy comparison.

While outsourcing to an agency is an excellent option, lead generation software can help automate and refine the process even further, streamlining heavily manual tasks and aggregating lead data. Software can also host landing pages, forms, and email sequencing, saving internal sales teams and improving lead follow-up and nurture.

Deciding to outsource lead generation

If you’re ready to scale your marketing efforts and grow your business’ revenue, outsourcing lead generation to an expert agency or software saves time, boosts efficiency, and can be highly cost-effective. Whether you seek an agency to completely take lead generation off your hands or explore sophisticated software that helps manage and qualify leads, it’s critical to consider ROI, the costs associated, and finding the right partner for your business.