Lead generation companies charge in one of three ways: a price per lead, a price per booked appointment, or a monthly retainer. The unit matters more than the number, because a "lead" can mean anything from a name on a list to a person who asked for your quote. Know the definition before you compare prices.
I'm not going to give you typical prices. They vary by industry, region and what counts as a lead, and a number I made up would only mislead you. Instead, here's how each model works, what to check in the contract, and a way to run a 30-day test that costs you a small, known amount.
The three pricing models
Per lead: you pay a fixed fee for each lead delivered. It looks simple, and it's the model with the widest range of quality. A $25 lead who never answers the phone costs the same as a $25 lead who is ready to book.
Per appointment: you pay when a meeting is booked on your calendar. This pushes the quality risk back onto the company, which is why the price is higher. Check what counts as an appointment and whether a no-show is billable.
Retainer: you pay a monthly fee for outreach effort, often with a minimum term, and results vary. It suits companies that run a campaign for you over time. Multiply the monthly fee by the minimum term to see your real commitment.
Shared leads and exclusive leads
A shared lead is sold to several businesses at once. The person who filled in a form on a comparison site may get calls from four of you within ten minutes, and the one who answers first usually wins. An exclusive lead is sold only to you, and it costs more.
The math shifts with this. Suppose a shared lead costs $20 and you close 1 in 12; that's $240 a customer in lead fees. An exclusive lead at $55 that you close 1 in 4 comes to $220. These numbers are invented to show the method, so run it with the closing rate you actually see. A cheap lead you can't close is expensive, and many shared leads are never answered. Ask the company how many other businesses receive each lead, and whether you can see how quickly the others call.
What a lead is in the contract
Read the definition, word for word. Some of the possibilities:
- A name and email from a purchased or scraped list, who never asked to hear from you.
- A form fill from someone who clicked an ad.
- A phone call transferred live from a prospect who asked for a quote.
- A qualified lead meeting criteria you wrote, such as budget, location and timing.
Each deserves a different price, and only the last two are people who actually asked. If you plan to call or text the lead, ask how consent was captured. In the US, texting or auto-dialing people for marketing generally requires their prior express consent (TCPA), and a lead bought without it can create legal exposure for you, not only the seller. Ask to see the form wording and the record of when the person agreed. For email, the same applies in spirit: CAN-SPAM requires honest sender lines, a postal address and a working opt-out.
Contract terms to check
- Minimum term and the cost of leaving early.
- Refunds or credits for invalid leads: wrong number, duplicate, outside your area, not a real person. How long do you have to report them, and who decides?
- Exclusivity: written, not implied.
- Who owns the data. If you stop paying, can you keep the contacts and the history?
- Volume commitments. Some contracts bill for a minimum number of leads whether or not you use them.
- Auto-renewal and notice period for canceling.
- What happens to your brand: are they sending messages in your name, and can you read them?
Ask for the contract before the sales call ends and read it away from the phone. A company that won't send terms in writing has told you something.
Red flags
A few things to watch for. Guaranteed results with no definition of the result. Pressure to sign today. Vague descriptions of where leads come from ("proprietary sources"). References you can't contact. Reviews that are all the same length. A refusal to let you test with a small order. And pricing that is only given on a call, with no written quote.
None of these proves bad faith, but together they're a reason to slow down. For a view from the agency side of the table, see agencies running acquisition for clients, and for the thought that your real problem may be follow-up and not volume, you don't have a lead problem.
The cost of doing it yourself
Before paying a company for leads, price the alternative: running outreach yourself. The cost is software plus your time. Rocketship, which is one product that finds buyers by name, emails them from your own Gmail, follows up, answers replies and books the meeting, costs $24.99 a month on Launch ($20.83 billed yearly), with 50 leads a month and 30 voice minutes. Frontier is $79 a month with 200 leads and two workers, and Mission Control is $149 with 500 leads and three workers. A dedicated phone number costs $5 a month on Launch and Frontier. Here, a lead is a named person added to your list, who gets an email from you. They haven't raised a hand. So it's closer to outbound work than to buying inbound inquiries, and it suits a different situation than a pay-per-lead company does.
The comparison is not apples to apples, which is the point. A pay-per-lead company sells you people who already asked, at a price per person. Outbound software gives you the means to reach people who haven't, at a flat price. For some businesses (an emergency plumber) the first is the better fit. For others (a consultant selling to property managers) the second is. How much cold outreach costs gives the month-by-month arithmetic, and lead generation software for small business compares the software side.
How to run a 30-day trial
Treat any lead company as an experiment with a cap.
- Set a spending limit in writing. For example, $500 for the first month, no auto-renewal.
- Define success before you start: so many leads reached by phone, so many appointments held, so many quotes sent.
- Call each lead within five minutes, if they're inbound. Log what happened: no answer, wrong number, not interested, quote requested.
- At day 30, divide the spend by the quotes sent and by the customers won. Compare with your other channels, using the method in customer acquisition cost for a small business.
- Ask for credits on invalid leads, with the log as evidence.
If the numbers work, scale slowly. If they don't, you've paid a capped amount to find out. Either way, keep your own follow-up in place, because a lead you don't follow up on is money wasted at any price. Compare it with an outbound month using the same discipline: the AI workers run the repeating parts and every monthly plan has a 7-day free trial, card required.
Whoever supplies the leads, the customers come from the follow-up. Rocketship finds the buyers, emails them from your own Gmail, follows up, and books the meeting on its own. Plans that get you customers start at $24.99 a month (Launch), and every monthly plan starts with a 7-day free trial, card required. Answering your existing number is included; a dedicated line is $5 a month.