Why Quality Leads are Expensive

Getting more leads at a lower cost is always at the top of lead generation objectives, especially for startups and small businesses. In fact, a HubSpot survey revealed that 65% of B2B marketers claim that generating traffic and leads is their top priority.

While generating a high volume of leads is a good thing, it doesn’t necessarily translate into sales and revenue. You may be getting a lot of traffic to your site, but only a small percentage may opt-in to receive your gated content, and an even smaller percentage of your leads convert into paying customers. Much of the focus these days is on lead quality as marketers take cost-per-acquisition into consideration.

Another study revealed that 61% of B2B marketers find it extremely difficult to generate high-quality leads. Most companies aim to reduce their cost per lead (CPL), thinking that the cheaper the lead is, the lower the cost per acquisition (CPA), and the bigger the profit margin. But in reality, quality sales leads don’t come cheap.

But, Why are Quality Leads So Expensive?

• It can be hard to find accurate data and valid contact information
• Many leads do not fit your buyer persona and target market
• Some leads might not have the right budget for your services
• Decision-makers and company influencers can be hard to reach
• Most of your leads will not be sales-ready
• It can be hard to create content that attracts the right leads

When leads aren’t qualified, you can expect to spend significantly more (in terms of effort and resources) on converting them into customers. That’s why there’s a high premium on quality leads.

In general, the free and inexpensive lead generation strategies cost you more time and effort, while more expensive tactics will produce faster results. However, it’s not just speed you should be focusing on. You want quality leads that can be converted into actual revenue—leads with a higher propensity to purchase.

There’s a good reason you’ve created a buyer persona for your target market. This buyer persona not only fits your brand but is also the ideal client that you want to be working with. Use it to qualify your leads and focus your efforts on the low-hanging fruit (leads that are easiest to convert).

You don’t want to waste your sales team’s time trying to sell to someone who doesn’t need your product. Time wasted is money lost. In a Lead Source Analysis report, Point Clear illustrates how cheap leads can cost you way more in the long run.

Quality leads are priceless commodities. You can have a funnel overflowing with leads, but that doesn’t necessarily translate into lots of customers. It’s the warm leads that bring home the bacon.

The Bottom Line

Quality sales leads don’t come cheap. If you think you’re in the clear because you’ve successfully lowered your CPL and amassed a high volume of leads, then think again. Leads are leads, yes. But are they the quality leads that you can eventually convert into paying customers?

Investing in a lead generation strategy that brings in revenue will help your business grow. You’ll not only save yourself the trouble of spending precious resources on ineffective tactics, but you’ll also save your sales team the effort of following up on leads that may never convert.

When it comes to spending your lead generation budget effectively, the old saying holds true: “You get what you pay for.”