How much are sales leads?

How much are sales leads? if you want to buy sales leads for your business you can shop around and find out. (There’s no harm in getting a quote from a business leader supplier.) However, the amount you should be prepared to pay for a sales lead fundamentally depends on two factors. First you need to know how good the lead is and this is measured in terms of how likely it is to convert into a sale. Secondly you need you know what a sale is worth to you in terms of profit if it does convert.

Calculating how much to pay for a sales lead

The math is easy. If a sale is worth $1,000 in profit then if you pay $1,000 for it you won’t make any money. So let’s assume you wish to make at least 50% profit in which case you can pay $500 for the lead. If it takes 10 leads to make a sale you can pay $50 per lead and hit your target profitability. See the wrong end sales lead formula for more details.

However, whilst this formula seems quite straightforward it doesn’t take into account the lifetime value of a new customer. It’s well known that it is easier to sell to an existing customer than to a new one because existing customers are comfortable with what you sell. From their perspective, buying from you in the future is relatively low risk. They know you will deliver. They know your products or services work and they also avoid having to search for a new supplier. The formula doesn’t really take this into account and yet for most businesses, the proportion of sales coming from existing customers dwarfs sales to new customers.

Sales leads and lifetime value

To deal with this fact, you need to reconsider what the true value of a sales lead is when you take into account the potential life time value of a new customer. If on average your customers order from you 10 times and each time you make $1,000 profit, then a new customer is worth $10,000 to you. No the $1,000 shown above. Targeting a 50% overall profit means that you can actually afford to pay $5,000 for a lead rather than the $500 figure we initially calculated.

So when you contact a sales lead supplier and ask “How much are sales leads?” you’ll be in a position to know out whether they are worth that price to you.

To get a quote for leads check out some of these lead vendors.