Some Thoughts on Pricing Models for Lead Gen. Busineses PT. 1

The other day I had a very interesting conversation with an entrepreneur who is about to launch what is essentially a lead generation business in a nascent but well defined vertical (which will remain unnamed for now).  We were talking about his revenue model, which is still very much in the works, and also some initial thoughts on how to price his leads which I thought would be interesting to share.

For the uninitiated, lead generation businesses develop potential sources of new business and sell these sources to companies interested in reaching these sources of business.  An easily understood example is that of financial planning lead generation.  There are many websites that capture data on people looking for advice on Annuities, ETFs, etc.  The companies that capture this data then sell it to financial planners as qualified leads.  The process looks a little something like this:

These leads then find their way into the sales funnel of the buyer of the leads. Below is an example of what a typical sales funnel for a financial planner may look like (the leads that we would collect as a third party lead generator would fit in somewhere between leads and appointments, more on that later):

If you’re providing leads into this funnel as a third party, it’s important to track the efficacy of your specific leads throughout this funnel.  In fact, many lead generation companies do not get paid per lead, but rather based on the number of appointments their leads can generate which is a proxy for how well qualified the leads are.

Now, about the actual pricing of the solution.  I’d like to shift away from financial services for the time being as that market is fairly well defined.  The competition you’d face within financial services is other lead generation companies (as this is a mature market as far as lead gen goes) and therefore the price is set at the market rate unless you can offer a differentiated product.

Shifting towards my entrepreneur friend’s nascent market – there are no other lead gen businesses, nor is there any outsourced sales organizations servicing this vertical.  Therefore, the focus is on competing with internal sales forces.  Understanding the compensation structure was the most important take away that I could offer.  Most internal sales reps, especially those selling big ticket items, are paid a minimal base salary and large performance based bonuses.  The key is to figure out where your leads fit into their sales pipeline, and then figure out the expected value of that lead to the company, as well as the expected cost associated with that lead if it were brought in through the internal sales team through telesales, direct mail, etc.  As this post is getting a bit long and Lost is on tonight, I’ll leave walking through an example with some numbers until part 2.

1,376 Replies to “Some Thoughts on Pricing Models for Lead Gen. Busineses PT. 1”

  1. important review. Furthermore visit the favourite site to test out slot deposit pulsa tanpa potongan. This original website
    has received realization from game slot casino
    folks in Indonesia. Presently there will be a lot of lovely promos should
    you join at this time.

  2. Howdy! This post couldn’t be written any
    better! Reading through this post reminds me of my good old room
    mate! He always kept talking about this. I will forward this
    post to him. Pretty sure he will have a good read. Thanks for sharing!

  3. Hi! I know this is somewhat off topic but I was wondering if you knew where
    I could find a captcha plugin for my comment form?

    I’m using the same blog platform as yours and I’m having
    problems finding one? Thanks a lot!

  4. This is the perfect blog for anyone who really wants to understand this topic.
    You know a whole lot its almost tough to argue with you (not that I really would want to…HaHa).
    You certainly put a new spin on a topic which has
    been discussed for ages. Great stuff, just great!

  5. Very nice post. I just stumbled upon your weblog and wanted to say that
    I’ve truly enjoyed surfing around your blog posts.

    In any case I will be subscribing to your rss feed and I hope you
    write again very soon!

  6. Heya i’m for the first time here. I found
    this board and I find It really useful & it helped
    me out much. I hope to give something back and aid others like you helped me.

  7. Having read this I believed it was rather enlightening. I appreciate you finding the time and energy to put
    this content together. I once again find myself personally spending
    a significant amount of time both reading and leaving comments.

    But so what, it was still worthwhile!

  8. Please let me know if you’re looking for a author for your site.

    You have some really good posts and I believe I
    would be a good asset. If you ever want to take some of the load off, I’d love
    to write some material for your blog in exchange for
    a link back to mine. Please blast me an e-mail if interested.
    Thank you!

  9. I do not even know the way I stopped up here, however
    I assumed this put up was once good. I don’t realize who you might be but
    certainly you’re going to a well-known blogger if you aren’t
    already. Cheers!

  10. Hiya! Quick question that’s totally off topic.

    Do you know how to make your site mobile friendly?
    My website looks weird when viewing from my iphone4. I’m trying to find
    a template or plugin that might be able to resolve this issue.
    If you have any suggestions, please share. Many thanks!

  11. important review. Similarly visit our site to learn bandar
    slot online. Fantastic web page has received likability coming from
    Joker123 apk wagering people in Dalam negri. There
    will be numerous head turning promos since you join at this moment.

  12. Hey would you mind sharing which blog platform you’re working with?
    I’m going to start my own blog in the near future but I’m having a difficult time making a decision between BlogEngine/Wordpress/B2evolution and Drupal.
    The reason I ask is because your design seems different then most blogs and I’m
    looking for something completely unique.
    P.S Sorry for getting off-topic but I had to ask!

  13. It is not my first time to pay a quick visit this website, i am visiting this website dailly and get nice information from here all the time.

  14. Hey There. I found your blog using msn. This is an extremely well written article.

    I will make sure to bookmark it and return to read more
    of your useful info. Thanks for the post. I’ll certainly return.

  15. You could certainly see your expertise in the work you write.
    The arena hopes for more passionate writers such as you who aren’t afraid to say how they believe.

    At all times go after your heart.

  16. Amazing! This blog looks exactly like my old one! It’s on a totally different subject but it has pretty much the same layout and design. Wonderful choice of colors!

  17. I’m gone to inform my little brother, that he should also pay a quick visit
    this webpage on regular basis to get updated from most recent
    news.

  18. Wow that was odd. I just wrote an very long comment but
    after I clicked submit my comment didn’t appear.
    Grrrr… well I’m not writing all that over again. Anyhow,
    just wanted to say fantastic blog!

  19. I’ve been browsing online more than three hours today, yet I never found any interesting article like yours.
    It is pretty worth enough for me. In my view, if all site owners
    and bloggers made good content as you did, the net will be a lot more useful than ever before.

  20. Great items from you, man. I have bear in mind your stuff prior to and you are
    just extremely fantastic. I really like what you’ve got here,
    really like what you are stating and the best way in which you assert it.
    You make it entertaining and you still take care of to stay it smart.
    I can’t wait to read far more from you. This is actually a terrific website.

  21. Hello all, here every one is sharing these experience,
    therefore it’s nice to read this website, and I used to go
    to see this website all the time.

  22. Attractive section of content. I just stumbled upon your site and
    in accession capital to assert that I acquire actually
    enjoyed account your blog posts. Any way I will be subscribing to your augment and even I achievement
    you access consistently rapidly.

  23. Hi everybody, here every one is sharing these experience, thus it’s pleasant to read
    this web site, and I used to pay a quick visit this weblog every day.

  24. Pretty nice post. I just stumbled upon your blog and wanted to
    say that I’ve truly enjoyed surfing around your blog posts.

    In any case I will be subscribing to your feed and I hope
    you write again soon!

  25. Hello there! Would you mind if I share your blog with my myspace group?
    There’s a lot of people that I think would really enjoy your content.
    Please let me know. Many thanks

  26. Wonderful site. Plenty of useful info here.
    I’m sending it to several buddies ans also sharing in delicious.
    And naturally, thank you in your sweat!

Comments are closed.