Study: Are Purchased Leads Dead?

purchased leadsPurchased leads have long had a reputation of lacking quality, and many marketers assume they are a declining part of the marketing mix. So why are fast-growing companies reporting a greater reliance on purchased leads than non-growing companies? What do they know that you don’t know?

Let’s take a look.

Contrary to popular wisdom, companies are telling us that purchased leads can and do yield favorable results. In fact, Velocify’s newest study, “Lead Trends Report” found that companies experiencing an annual growth of at least 20 percent rely more heavily on purchased leads than on 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.

In addition, almost half (45%) of lead buyers plan to increase investment in high-quality leads (live transfer and/or exclusive leads) in the next year.

Clearly, purchased leads are more of a staple in the marketing diet than common wisdom would suggest.

But why are high-growth companies more successful with purchased leads than companies experiencing less growth? One of their secrets to success is that they are willing to invest more per lead to get high quality than average performing companies. The average spend reported by lead buyers was $42 per lead but companies with significant revenue growth spend an average of $86 per lead.

Another difference is that high-growth companies regularly and frequently re-assess the performance of their lead sources. The study found that high-growth companies are 125% more likely than flat/declining companies to evaluate new lead providers at least quarterly. This is a strong indication that these companies have disciplined processes in place for measuring lead source KPI’s and a willingness to change up their marketing program to optimize performance.

In contrast, some flat or declining businesses even go a few years without evaluating new lead providers—a practice not reported by high-growth companies.

Though generating a high volume of leads from free (or near free) lead sources like referral and web channels sounds like a good strategy, our findings show the value of purchased leads cannot be ignored.

See the full Lead Trends Report to learn more ways that fast-growing companies are building and sustaining effective marketing programs. What are you doing to drive sales success at your organization?

Jorge Jeffery, sales objectivesMeet the Author: Jorge Jeffery joined Velocify in 2011 and is director of research and analytics. Jorge has been instrumental in mining data from 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.

  • Branden O’Donnell

    Very useful information. It would seem a common question if purchasing leads would really be worth it over free, but looks like the future cash flows from spending a bit pay off in the long run.

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