I am asked this question all the time. Demand Generation or Lead Generation is one of my main focus. I believe that it is the heart of marketing. All of your activities within marketing are done for the purpose of generating demand. Even Public Relations (editorials, public speaking, articles, press releases), which is a must for most companies and not directly or instantaneously generate leads, are a wing on your lead generation program.

So amongst all of the web activities, third party vendor, lead nurturing programs, branding activities, events and tradeshows, list buying, direct mail programs, and marketing through channels and alliances, what should your cost per lead be? Well, these activities are all different and each of them has different cost per lead ranges. Your cost per lead considered to be great if your overall program ends up to be $6-$75 cost per lead. This is because some leads you will acquire for 50 cent from a list while some from a costly tradeshow for $200. (just an example)

Today we will discuss third party vendor online cost per leads. Check back on the Generation O Blog in a few days to read about the statistics and cost per leads for other types of marketing activities.

Third party vendors are the most popular way of getting instant leads that are somewhat or entirely targeted based on your ideal customer profile. They are favored by sales people because these are leads that through the vendor read something recently about the company and maybe even the products.

For those of you who may be new to third party vendor advertising it works the following way: you give your company’s content (case studies, white papers, educational webinars, e-books, banners, demos, podcasts, articles, or sponsored reports), your company’s description, and your ideal customer description. The vendor will match your content and requested lead type with their network of audience and puts your materials or advertisement across their web network where they offer your marketing material/content to their website visitors or members. They do all sorts of activities such as email marketing to drive visitors to your content. The visitors have to fill out a form in order to get your content. After the vendor captures this information they send you the leads and you can tell who downloaded your material, which of your content, and what may their interest be.

However, the more targeted the program is and the more pieces/offerings are in the package the more it will cost. The vendor will first give you a proposal. Never agree to the first proposed amount. Always negotiate! There are hundreds of vendors so if one do not want your business enough, the next one will. Check back in a couple of weeks as we will be posting a blog about Negotiation Techniques that can save you a bundle. The vendor may include content creation like a flash demo or a special report of some sort and a guaranteed amount of leads. Always get a guaranteed number of leads! This means that if for example you sign up for a two months program and the company agreed to bring you 1200 leads by the end of the program and they only brought you 900, they will extend the program and run some additional special promotions and mailings in order to meet the 1200 leads guarantee. Guaranteed lead numbers are a must because you want to know how much your cost per lead would be in the worst case scenario.

Ok, but how much should I be paying? Let’s get to it. I found that if the program is really targeted then the price can be between $55-120 per lead. If you can do a less targeted campaign meaning you are only looking for IT managers and director level professionals all across verticals then you could get those leads at $25-50.

You have to take some things into consideration. If you are a large company and your average sale price is 20K per deal you can afford a higher cost per lead but if your average sale price is 2K per deal then even a $25 cost per lead may not make sense for you. In such cases there are other activities you can do that may be more time consuming and not as targeted but could yield the same results.

If you are interested in learning more about this subject and looking for some vendors then visit us at www.generationOmarketing.com We negotiated great deals with some of the best vendors in the industry. We tested them and work with them extensively with great results.