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  • Writer's pictureNatalie Adler Skarzynski

Where to Spend Your Lead Gen Dollars for Best Results

5 min read

dollar bill against white wall where to spend lead generation budget

When it comes to B2B lead generation budgeting, I'm often asked where to spend the money for the greatest impact. The "lead gen mix" of sources changes year to year, but some fundamental principles apply. In this post, I'll explore my approach to paid lead generation strategies to help you determine the right mix for your business.

Back to basics: building blocks of a lead generation engine

Time is the #1 resource you'll need to create a lead generation engine. Do you have the resources in place today with both the talent and bandwidth to:

  1. Drive qualified net new prospects to your site via SEO

  2. Create content to capture those prospects

  3. Nurture those prospects with email campaigns until their lead score is high enough

  4. Qualify leads with solid follow-up and pass to the sales team

If not, consider hiring or training staff to fill these needs. I can tell you from experience that, if the rest of the lead gen machine is not up and running, you'll be wasting your money adding more leads to the start of the process. Imagine a conveyor belt that grinds to a halt halfway down the line – all your leads will fall on the floor without a process in place to further qualify them.

Similarly, investing further in lead generation can become problematic if there is not alignment on what marketing and sales expect from each other. What does sales consider to be a marketing-qualified lead? What does marketing expect from sales in terms of lead follow-up? Align on these two issues before spending more time or money on the process.

When to add paid lead sources to the mix

"Paid sources" can sound a bit misleading, as it implies that your current lead generation efforts don't cost any money. But they do have a cost in terms of time and resources – you're just not paying per lead, per click, or per impression. The building blocks of a lead gen engine outlined above assume the use of only "organic" sources, meaning you're not spending money on any advertising or other programs to drive site traffic or leads into your database.

So when does it make sense to explore some paid lead sources? If your current, organically generated leads are converting well, and if you're confident in the rest of the lead gen engine's ability to nurture and qualify leads (not to mention actually close deals), BUT you're just not seeing enough volume, paid lead sources are an excellent choice.

Types of paid lead gen sources

Which paid lead gen programs make the most sense for you? It all comes down to the pricing structure. What result are you paying for? How closely aligned is that result to your true goal (in this case, a new lead)? It's important to look for a program where the result for which you're paying is closest to your desired end result – a lead.

Pay per impression

You're charged per "eyeball" that sees your ad or your content. Great for brand awareness, but an impression is pretty far away from a lead.

Pay per click (PPC)

You're charged per click. Closer than an impression, but you'll still need to convert a click to a conversion, and a conversion to a warm lead, before you achieve your desired end result. This is the model that Google Ads, social advertising, review sites, and so on, use to generate traffic. These types of advertising models offer various degrees of demographic control, meaning control over who sees your ad. For B2B lead gen, where you may want certain types of leads based on company size, industry, or other firmagraphics, most PPC structures do not offer this degree of control. But leads from PPC can convert well, and we've seen some success with these types of programs.

Pay per lead/conversion

You're charged per conversion. The closest to your end goal. And many programs with a pay per conversion structure offer better firmagraphic control. The most common example of this is paid content syndication, where you pay a third-party to promote your content to a pre-defined audience and only send you/charge you for leads that match your profile. A newer take on this, and one we're actively piloting at my current gig, is pay per webinar registration. We know our monthly webinars reliably convert leads into sales opportunities, so we're working with a company to get more leads in our desired profile (job title, industry, etc.) to register and attend our webinar sessions.

In general, I've used a mix of PPC and pay per lead to add volume to our lead funnel. Don't be afraid to pilot a new source to see how it works – just be sure to have pre-defined goals for success and be ready to pull the plug if it doesn't work.

As an aside, many of you may be wondering why I haven't recommended buying lists as a paid lead gen method. In my experience, list buys are a waste of money. Instead of buying a large quantity of contact information for people who have never heard of you (and probably don't want to hear from you), consider spending that money on a smaller quantity of leads who, via the methods above, have shown that they do want to engage with you.

How much to pay for lead generation

When setting your budget for paid lead gen sources, it helps to first define how much a lead is worth to you. You can back into this number using the following equation:

Multiply the following values to find your target cost per lead (CPL):

  • Average deal size in dollars

  • Average conversion rate from opportunity to closed deal

  • Average conversion rate from warm/qualified lead to opportunity

  • Average conversion rate from new lead in the database to warm/qualified lead

Here's an example:

  • Average deal size in dollars = $10,000

  • Average conversion rate from opportunity to closed deal = 30%

  • Average conversion rate from warm/qualified lead to opportunity = 20%

  • Average conversion rate from new lead in the database to warm/qualified lead = 15%

The result of multiplying the four values above gives you a target cost per new lead (CPL) of $90. With this number in mind, you can conduct a more informed analysis of the paid lead gen sources available to you.

What paid lead sources have you seen success with? Need help building out a comprehensive lead gen plan? Get in touch with me anytime.


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