The Huge Disparity Between Paying for Leads vs Generating Leads

When you boil it down, the topic of this podcast is the age-old problem of time or money. Do you have time to generate your leads/sales, or do you need to outsource your marketing efforts?

Outsourcing this critical task will cost you more upfront, but it will save some of your valuable time. If you DIY your marketing, you avoid the upfront sticker shock, but it will eat your time.

Of course, you can also buy leads, and this podcast episode explains all three options (with their pros and cons) with insights from one who has been there and done that.

This episode is the 13th in a mini-series of podcast episodes entitled Generating Leads; the Hightest Quality for your Business.

Click here to access the web page dedicated to this podcast episode (#41) and interact with Rabbi Dave by leaving a comment about this post.

If you would like more, you can access articles, videos, and podcast episodes, complete with transcripts, visit The Rabbi Who Got Rich on Sunday.

Transcript

In today's episode “The Huge Disparity between Paying for Leads vs Generating Leads,” we reveal the surprising winner. Hint; it’s the age-old challenge of ‘Time versus Money!’

This is the fourteenth and final episode in the mini-series entitled "Generating Leads—the highest quality for your business, and we’ll cover the pros and cons of paying for leads, generating your own leads, and hiring experts to generate leads for you. Let’s get started!

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My Story about Paying for Leads vs Generating Leads

In the summer of 1985, I had a summer job selling cutlery through in-home demonstrations.  I started by approaching friends and family and asking for referrals at the end of each demonstration. Everyone really enjoyed the demonstration, and with a little incentive, I usually got at least 10 referrals.  When calling a referral, I could reference their friend who really enjoyed my presentation and it was very easy to set appointments. That was my first exposure to generating my own leads.  

Two years after getting married, my wife and I moved to NJ in 1993, and a friend introduced us to a Multilevel Marketing company (MLM) selling products. I tried the same approach as with cutlery, but getting referrals was much harder. As I analyzed why, the main reason was that they did not enjoy my presentation themselves and were wary of MLM, so of course, they were not going to give me any referrals and expose their contacts!

By 1995 when I tried a different Multilevel Marketing company that sold services, I was part of the NFL club (No Friends Left) at least as far as approaching my warm contacts about a business opportunity.  I began to become an expert at all of the techniques in this series and developed a great business built on the network of referrals I generated.  The internet was fairly new, and I began to dream of an easier way to generate leads by paying someone else to do it for me, but I could not get the leads that I bought to work for that opportunity. I also realized that most people could not do what I was doing and searched for a business model that was built for the average person to succeed, not the exception so that I could build a business much faster using bought leads.

In 2001, I ran into someone named Danny quite by “accident,” who was going to change my business success forever although neither of us thought so at the time!  

Danny was using leads purchased from marketing companies that ran ads online and then referred customers to purchase everyday products from the manufacturer instead of the store and get a much better shopping deal.  This system of his had both things I was looking for, a business model anyone could succeed at (a story for another time) and leads that someone else generated that you could purchase and successfully build your business with.

By 2005, the internet had grown tremendously, highly qualified prospects were no longer filling out forms for random business opportunity ads and everyone was selling the same leads who had filled out the forms in the past or new unqualified prospects over and over again for more and more money with less and less success.  

Then came the age of specialized leads of people who had bought a package from another company in your vertical market such as weight loss companies or multi-level marketing companies.  Finally, those companies realized the value of their own customers and stopped others from using them which led to the age of generating your own leads.

Classified ads, both online and offline, worked great for a while on Craigs List and in Mom magazines—until they didn’t!

Finally, I learned to post on social media and generate high-quality prospects on LinkedIn and Facebook, which still works today but is very time consuming. The next generation will do well on Instagram and TikTok, but probably only until those sources become old and the next new method comes along!

Today, my favorite source of leads (outside of referrals) is using experts who know all the ins and outs of social media marketing and stay on top of the latest lead generation changes. I also use a VA to generate leads on Social Media and to set appointments with prospects generated by experts.

However, as a mentor or coach, my lead preference does not count. What I show others how to do comes down to ‘time vs. money’ regarding paying for leads vs. generating leads. I stay up to date on what my experts do so I can teach others how to do it themselves if their money is tight, although I prefer to spend the money because you can’t buy more time!

Lead Generation Strategies

There are two types of prospects in the world.  Those you know and those you don’t know yet! Lead generation is the process of identifying the people you don’t know yet, qualifying them so you only approach the individuals that are right for you, attracting them to like you and your offer, and converting those previous strangers who are now budding relationships into hot prospects who indicate interest in your company's product or service. It’s a critical component of sales and marketing strategies, enabling businesses to sustain and grow by constantly bringing in potential customers.

Without a steady stream of prospects (or leads), your business can stagnate. Leads are the lifeblood of your business—they turn into paying customers, provide feedback for improvement, and help spread the word about your brand. Effective lead-generation strategies ensure a continuous influx of prospects, making your sales pipeline robust and predictable. Thus the question of paying for leads vs generating leads.

The Pros and Cons of Buying Leads 

Paying for leads involves purchasing lists of potential customers from third-party providers. These lists can be acquired through various channels, such as lead generation companies, online platforms, or industry-specific vendors.

One of the biggest advantages is the speed. You can quickly acquire a list of potential customers without waiting for organic growth.

This approach requires less time and effort compared to generating leads yourself. There is no need to invest in extensive marketing campaigns.

It’s easy to scale up lead volume by adjusting your budget, making it suitable for businesses looking to grow rapidly.

Buying leads can be expensive, especially if you’re looking for high-quality, targeted leads.

There’s a risk of obtaining low-quality leads that may not convert, leading to wasted resources.

Relying heavily on third-party providers can be risky if their lead quality fluctuates (which in my experience always happens) or if they change their pricing models.

DIY Lead Generation

Generating your own leads involves creating marketing campaigns to attract potential customers organically. This can include content marketing, SEO, social media engagement, webinars, and more.

You have more control over the quality of leads. By targeting specific demographics and behaviors, you’re likely to attract qualified leads that are genuinely interested in your products or services.

While it may require an initial investment in time and resources, generating your own leads can be more affordable in the long run.

Creating your own leads enhances your brand’s visibility and reputation, helping you build trust and authority in your industry.

It requires consistent effort and resources to build a steady stream of leads.

You need knowledge of various marketing strategies and tools to be effective.

Building a robust lead generation system takes time and patience.

Paying Experts to Generate Leads for You

Hiring experts to generate leads specifically for your business involves outsourcing lead generation to professionals who can create customized strategies.

Access to specialized skills and knowledge in lead generation, ensuring more effective and efficient results.

Experts can tailor lead generation strategies to align perfectly with your business needs and target audience.

This is a potentially faster and more effective lead generation compared to in-house efforts, leveraging the latest tools and techniques.

The costs of using experts is often higher than DIY methods but can be justified by the quality and customization.

Reliance on external expertise can be risky if the relationship ends or if the quality of service diminishes.

The challenge of selecting a reputable and effective lead generation expert is large because most “experts” tell you they can help you but really can’t.  Success leaves clues so check out their references and make sure that they are not faking their success!

Best Practices; Paying for Leads vs Generating Leads 

Let’s compare the key differences in cost, quality, time, and long-term impact. Paying for leads offers immediate results but at a higher cost and variable quality, while generating your own leads provides better quality and cost-effectiveness over time but requires more effort. Hiring experts combines the benefits of both but comes at a premium.

Depending on your business size, budget, and goals, one method might be more suitable than the other. Small businesses with limited resources might prefer generating their own leads, while larger companies with bigger budgets might benefit from buying leads or hiring experts.

How to choose between Paying for leads vs Generating Leads

Assess your financial capacity. If you have a higher budget, paying for leads or hiring experts might be feasible. If not, focus on generating leads organically.

Evaluate your available time and skills. If you have significant free time or if you have a dedicated team for marketing, generating your own leads could be more efficient.

Align your lead generation strategy with your short-term and long-term objectives. A hybrid approach might balance immediate needs and sustainable growth.

Recap and Weekly Podcast Challenge

We hope that today's episode “The Huge Disparity Between Paying for Leads vs Generating Leads” helps you evaluate the pros and cons of paying for leads vs. generating your own leads and explore the option of hiring experts. Each approach has its own advantages and challenges, and the best choice depends on your specific business needs.

Evaluate your current lead generation strategies and consider experimenting with different methods to find what works best for your business. and share your results with me through social media using our dedicated hashtag #richrabbichallenge, or email me with your updates—I'd love to hear from you!

Thank you for tuning in to The Rabbi Who Got Rich on Sunday. If you found value in today's episode, subscribe so you do not miss out on future insights and strategies to help you thrive. Don't forget to share this episode with a friend or colleague who could benefit from “The Huge Disparity Between Paying for Leads vs Generating Leads.” This concludes our mini-series on "Generating Leads—the highest quality for your business. Our next episode will be one of my favorite topics:  “Are you the right jockey on the wrong horse?”

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