Velocify study debunks some myths about perceived lead quality by examining how high-growth companies yield favorable results with purchased leads
Ask any lead buyer to describe the quality of leads they purchase and the answer is likely to be ‘low.’ In fact, 84% of lead buyers say that lead providers need to improve lead quality. But is the less than enthusiastic response really warranted? It’s absolutely true that low-quality leads can mean wasted sales rep time and decreased productivity, as well as lower close rates. But, contrary to popular wisdom, successful organizations tell us that purchased leads can and do yield favorable results. Velocify’s newest study, “Lead Trends Report” found that high-growth companies (those with 20%+ annual growth) are relying more heavily on purchased leads than any other lead source. Purchased leads account for a higher percentage of total volume for higher growth companies, regardless of company size. Not only do fast-growing companies have a higher percentage of purchased leads, they also have a lower percentage of referral and direct mail leads, compared to companies experiencing less growth. So what do they know that you don’t?
One of the most compelling findings of the study is that high-growth companies are more willing to invest more per lead to get high quality than are most other companies.
The average spend reported by lead buyers was $42 per lead but companies with significant revenue growth spend $86 per lead.
These companies are investing in high quality lead types like exclusive leads and hot transfers, two lead categories that are forecasted to see the most growth. Forty-five percent of lead buyers anticipate an increase in these high quality lead investments in the coming year.In contrast, changes across most lead sources are expected to remain fairly flat with the greatest decrease expected in shared leads. And despite the fact that shared leads have the most lead buyers indicating decreases (18 percent), there are still more indicating planned increases (26 percent). Even fewer lead buyers plan to increase spend on aged leads (11 percent) and even more are planning decreases (14 percent).
The Bottom Line
Purchased leads can be a more impactful part of your customer acquisition program than common wisdom would suggest. The key is to invest in higher-quality lead sources like hot transfers, exclusive leads and leads that are scored or qualified in other ways for quality. Though generating a high volume of leads from free (or near free) lead sources like referral and web channels is a good strategy, our findings show the value of purchased leads cannot be ignored.
This article was contributed by Jorge Jeffery joined Velocify in 2011 and is Director of Research and Analytics. Jorge has been instrumental in mining data from the more than 1,500 sales teams that leverage Velocify’s solutions today. Insights gleaned help establish best practices for Velocify clients in order to maximize revenue potential.