The Risks Of Pay Per Lead Marketing – what to watch out for

The obvious thing to watch out for with Pay Per Lead Marketing is the quality of the lead. If you agree to pay a fixed cost per lead then it is in the agency’s interest to send you the cheapest leads they can get. There are three things to watch out for:

1) The Source of the leads

Leads from a search engine like Google where users are actively searching for your service are more expensive for an agency to generate than leads from display type ads like Facebook or Google Display.

These search engines leads are typically 3x more likely to sign up to become a paying client. This is because the user is in actively searching for a solution, they are very keen. They didn’t just click on something that peaked their interest, they have decided to spend time and energy trying to find a company like yours.

So the cost you pay per lead should reflect the source of the leads. I’ve come across a few companies that have been stung and will only buy Google Search leads.

2) How the lead was generated

Is the person enquiring because they want your service? Sometimes the lead signed up for a free download of some kind or access to some information. Or they thought they were filling in some kind of online calculator, such as “how much compensation are you entitled to”, “how much will solar power save you”.

You can target a much wider market using these indirect lead gen strategies which is great, but it should be reflected in the price. It will cost a lot more to get a hot lead from someone that enquired direct than someone who gave in their details in exchange for information. The latter may not actually be expecting your call, or where told after they put there details in that someone would be calling them.

3) Are They “Your” Enquiry

If your company isn’t mentioned on the site at all then they are a “lead” but they definitely aren’t a genuine enquiry in to your services. They have no brand awareness or rapport with your brand to help you close the deal so your closing rate will be lower.

Also some agencies sell leads to multiple sources. Sometimes this is done openly e.g. where users are signing up to get a quote from three local traders. Sometimes the user isn’t told either that the lead will be sold to multiple sources.

Again that doesn’t mean there is no place for these leads, the number of hot leads at any time always makes up a very small part of your potential market. But it should be reflected in the price.

When Is It Okay To Go For Lower Quality Leads

Even if your leads are the lowest possible quality, that can still be profitable if you are paying a fair price, a low price for a low quality lead. You’ll also need a good system for handling the high volume of leads that you will need to process, usually a call centre style team.

I always prefer to start by providing a company with higher quality leads that are easier to close. Then if a good percentage of those leads are closing and they want to increase the volume then move on to other sources.


We now offer pay per lead marketing where you only pay based on the number of leads you receive.