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What is a Reasonable Cost per Lead for B2B Lead Generation

BB Lead Generation

The pursuit of high-quality, high-value leads is an ongoing challenge for most businesses. Companies devote significant effort to connect with senior decision-makers and buyers. They deploy various tactics to secure those elusive SQL (Sales Qualified Leads) or BANT qualified leads (Budget, Authority, Need, Timeframe). Their aim is ultimately to convert them into loyal customers. With these objectives in mind, the cost of each lead becomes a critical consideration. In this blog, we delve into the factors that influence cost per lead (CPL) and explore what can be considered a reasonable cost per lead for B2B lead generation.

The Challenge of Reaching Decision-Makers

Let’s be clear. If it was that easy, we’d all do it. And, we’d keep doing it. Yet, it’s not a straightforward task to identify when high-value organisations are ready to buy. Market triggers can drive change. Whether it’s a legislative change, changes in a particular industry, the drive for sustainability, adoption of new technology, or the use of artificial intelligence, there will always be factors that encourage change, and the search for new solutions. Unfortunately though, not everyone reacts to change at the same pace. Budgets dictate. Priorities prevail. And, incumbent suppliers, and competitors get in the way. 

Limiting Factors

What’s more, the above are only a few of the limiting factors. A further issue that confronts most business development executives, contributing to the cost of a B2B lead, is the sheer difficulty of reaching senior decision-makers who possess the authority and budget to make purchasing decisions. These individuals are notoriously challenging to identify, and even harder to reach and engage. The time, methods, channels, and resources required to connect with them can significantly impact CPL.

Low Response Rates from Senior Management

Even when businesses manage to identify potential target leads,through profiling and segmentation, the response rates from senior executives can be low. These budget-holders are busy, and they are bombarded with communication, making it hard to capture their attention. The multi-channel, multi-touchpoint, cost associated with repeated attempts to engage these high-level prospects can add up quickly.

The Importance of Differentiation

To stand out in a crowded marketplace, businesses must differentiate themselves from the competition. That’s easy to say, but not so easy to do. And, differentiation alone is not sufficient, if your prospect isn’t in the market. Differentiation involves creating compelling messaging and content that resonates with prospects. Developing unique value propositions and tailoring outreach efforts to address individual pain points is crucial. Yet, these activities require time and investment. In an ideal world, customers will find you, rather than the other way round. But, prospective buyers rarely just happen upon your business offering. It takes significant effort for prospects to find your business when they are in change mode. 

The Challenge of Timing

Timing is everything in B2B lead generation. The difficulty lies, though, in identifying when the right time is. This is where pipeline building and nurturing come into play. Investing in these processes, ahead of time, is essential for lead identification and conversion. Building relationships with valuable leads over time can be costly though, but is often necessary.

Engaging Influencers and Message Carriers

While the primary goal is to secure SQL or BANT qualified leads, in some cases, the focus needs to shift to identifying influencers, or message carriers, within an organisation. These individuals might be the ones experiencing the pain points that your product or service can address. Whilst they may sometimes be less difficult to reach, in larger companies, it still requires a targeted approach since decisions are rarely taken in isolation. Thus, you need to build the strategy in order to bind in as many influencers as possible. That may mean reaching out in different ways to different message carriers. 

Inbound Lead Generation

It goes without saying that a lead will be considerably warmer, and easier to convert, if it comes to you rather than the opposite. That’s where a blended approach to lead generation comes in. Integrating outbound with inbound may be the answer. Encouraging prospects to make an enquiry is key. But, getting to that point usually takes some considerable effort. Inbound lead generation methods, such as content development and distribution, advertising, webinars, and other events, are effective but costly. Building awareness and credibility takes time and investment, contributing to a higher CPL.

Proactive Outreach is Inevitable

While encouraging leads to come to you is the ideal long-term strategy, proactive outreach through methods like telemarketing, email marketing, and LinkedIn outreach is often unavoidable. Hence, the more targeted you can be, whilst utilising any levers you may have, the better. Sometimes, there’s no way to know when someone is in the market for your solutions without engaging with them on a one to one basis, and asking the question. That’s where you find out contract end dates, budget periods, and other drivers of change . 

Peer to Peer for Higher ROI

For high-value sales, peer-to-peer engagement is generally crucial. Large scale purchases are unlikely to be conducted remotely. People still buy from people. Telemarketing, and other peer-to-peer approaches, can be expensive on the surface, but are essential for building meaningful connections with high-value prospects that convert to big ticket, long-term revenue.. 

Quality Comes at a Price

We’ve alluded to the fact several times in this article, but there’s no way around it. Quality leads don’t pop up in a vacuum. They also don’t come cheap. In an ideal world, every business would aim to drive down its cost of lead acquisition. That is a sensible objective. However, high-quality leads often require more time and investment. Success might come from the 6th, 10th, or even 20th interaction with a lead. Patience and persistence are required.

Is Cost-per Lead Even the Right Measure

Whilst a cost-per-lead calculation makes sense, we might ask whether this is the right basis for calculation. Ultimately, return on investment is what businesses must seek. The pressure is always on for business developers. Yet, measuring the CPL too early may result in an incorrect assessment of the true value. But, when, and where, do you draw the line? Marketers often talk about lifetime value. If you calculate the value of every customer against the absolute cost of acquisition, you will gain a different perspective versus the same measurement over a period of 1-3 months, for example. 

What is a Reasonable Cost per Lead?

I don’t want this blog to opt out of providing a figure. Yet, inevitably, the cost of an individual lead will vary massively. The first consideration is to define what a lead actually is. Requirements differ, and company viability criteria also differ. What’s more, the value, and complexity, of sales can vary wildly. So, it is far from easy to simply provide a simple number. Equally, the cost of an individual lead will differ based on the level of investment that goes into unearthing that lead. And, that is influenced by the cost of each channel. 

So, What’s the Number?

Specific figures can vary wildly depending on the industry, business model, and target audience. In our experience, a reasonable cost per lead for high-value B2B lead generation typically ranges from £300 to £1000, but, in some cases, it can be more, rarely less.That’s why it’s so essential to both define what a lead means at the front end, and to assess the lifetime value of a customer when determining the worth of a lead.

Making Informed Decisions

Understanding the factors that influence the cost per lead in B2B lead generation is crucial for making informed decisions. While there is no ‘one-size-fits-all’ answer to what a lead should cost, businesses should focus on the quality and value of the lead rather than fixating on CPL. But, that takes patience. It’s a complex landscape, and a balanced approach that combines various tactics is often the most effective strategy to deliver leads in the first place.

Ultimately, the budget you apply to marketing, and lead generation, will define what you can do with that budget, and the amount and type of leads you will attract. Remember, in the world of B2B lead generation, it’s not just about how much a lead costs but the value it brings to your business.

Visit our Integrated Lead Generation page to learn more about our lead generation services.


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