25 Nov, 2024
I wanted to share some insights on how to make an informed decision when hiring a lead generation agency.
Many people approach this with unrealistic expectations, believing they'll generate millions of leads and retire to a beach. The reality is a lot more nuanced, and making the right choice requires careful consideration.
Identifying Your Goals
Before approaching any agency, you need to clearly understand what you're trying to achieve. For instance, if you're simply testing whether an offer works, hiring a lead generation agency might not be the most cost-effective approach. Similarly, if you're a complete startup without a validated offer, working with an agency could be premature and expensive.
When to Build In-House vs Outsource
The decision to build in-house or outsource often depends on your current stage. Building in-house makes sense when you've validated your offer and reached a revenue point where you can dedicate resources to lead generation. This works particularly well if you have the technical capability to automate key processes like lead scraping, verification, and multi-channel follow-ups.
Lead generation agencies tend to be most effective for businesses in their growth phase – when they've validated their offer but haven't reached the scale to support a skilled in-house team. This sweet spot is where outsourcing can provide the best return on investment.
Understanding Agency Models
When evaluating agencies, it's crucial to understand their specialisation. Be wary of generalist marketing agencies that claim to do everything – they often excel at nothing. Instead, look for agencies that specialise in one or two specific channels. Additionally, research whether these channels work effectively in your industry by speaking with others in your sector.
Pricing Models and What to Expect
Most modern lead generation agencies work on performance-based models. There are several common approaches:
Per Booked Meeting: While effective for smaller agencies (10-20 clients), this model can become problematic as agencies scale, often leading to scheduling errors and communication issues.
Positive Response Charging: This can be effective but requires clear alignment on what constitutes a 'positive response' to avoid paying for low-quality leads.
Meeting-Ready Leads: This middle-ground approach focuses on leads who have expressed clear interest and intent to speak, typically resulting in 80-90% booking rates.
Key Factors in Agency Selection
When choosing an agency, consider their:
Technical Competence: Modern lead generation is increasingly technical. Ensure they demonstrate expertise in their tools and processes.
Team Structure: Look for dedicated account managers separate from the sales team and founders. This ensures consistent support and communication.
Reporting Systems: They should offer transparent reporting with clear metrics and regular updates. Weekly automated reports and real-time dashboards are ideal.
Social Proof: Look for detailed case studies and client interviews, not just logos and testimonials. Video testimonials are particularly valuable as they're harder to fake.
Red Flags to Watch For
Avoid agencies that:
Lack clear social proof of performance
Have founders who aren't actively sharing content and insights
Use pricing models that don't align with success metrics
Can't provide detailed service level agreements
Don't offer transparent reporting systems
Testing Your Offer First
Before engaging an agency, test your offer's viability yourself. If you're considering cold calling, make some calls yourself. For email campaigns, run a small test campaign. This validation helps ensure you're not throwing money at an unproven concept.
Remember, even the best lead generation agency can't overcome a weak offer. Success comes from combining a strong value proposition with expert execution. Take time to validate your offer and choose an agency partner who demonstrates both expertise and transparency in their approach.
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