Leads are vital for the success of your business, yet they can prove to be quite challenging to generate. If you are searching for more quality leads or a more streamlined approach to obtaining them, you may have contemplated partnering with a B2B lead generation agency to help fulfill those objectives.
But what is the real cost difference of partnering with a lead generation company? In this article, we will delve into the intricacies of lead generation costs, helping you make an informed decision on whether outsourcing lead generation is the right move for your business.
Should You Do It In-House?
Are you absolutely floored by the jaw-dropping costs that come with lead generation? Trust me, I have been there too. So, after digging through research and chatting with your sales experts, you might just decide that it far more logical to generate leads in-house. Sounds like a reasonable choice, right? Well, before you dive headfirst into the DIY realm, it's crucial to take a step back and consider the true difference in costs between outsourcing and doing it all yourself.
I get it, you wanna save money by doing it all internally, but the time and resources it takes can pile up faster than dirty laundry. Outbound lead generation requires specialized skills, and unless you have experience in the field, you'll basically be starting from scratch. It's a bumpy road full of trial and error, inefficiencies, and ineffective testing.
Instead of reinventing the wheel, why not consider outsourcing? In this short article, we will lay out all the necessary factors you will need to consider prior to launching a stellar lead generation campaign. It gives you the chance to assess the skills, time, and money required for each component, so you can finally figure out if your team is ready to embark on this journey. So let us get started!
What Exactly Is A Lead Generation Company?
Broadly speaking, a lead generation company is an organization that brings together sales and marketing efforts to create opportunities for business growth. Their main objective is to enhance the sales funnel for their clients. These companies specialize in sales development and have a complete technical infrastructure and skilled teams to execute inbound and/or outbound lead generation activities. They analyze your services and existing clients, identify Ideal Customer Profiles (ICPs) and buyer personas for future outreach, research leads that fit these profiles, select appropriate communication channels, contact potential leads, and secure appointments with potential buyers.
Lead Generation Companies: Do You Know The Differences?
In the world of lead generation, it's crucial to understand that not all companies were created equal. First of all, only a select few possess the specialized knowledge required for success in the Life Sciences industry. This distinction is worth highlighting because the stakes are high and your business deserves a partner that truly understands the industry's players.
Unlike the majority of companies that operate as regular agencies, those specializing in the life science industry bring something extraordinary to the table. Some companies go beyond the traditional approach by offering a consultancy background that makes all the difference in terms of strategy and insights. This consultancy approach sets them apart and makes them an invaluable asset for your business growth.
When you choose a lead generation consultancy, you're not just gaining access to a service provider - you're gaining a strategic partner. They don't merely align sales and marketing efforts to generate business opportunities; they offer a deep understanding of your services, existing clients, and industry trends. They invest time and resources to research and identify leads that perfectly match your target profile. They leverage on their own network and employ expert teams to personally reach out to potential buyers, securing valuable appointments for your business.
Perhaps the most significant advantage of such consultancies rooted in life sciences is the level of support and strategic guidance they provide. They become an extension of your team, working hand-in-hand with you to achieve your growth objectives. Their expertise and industry insights add invaluable perspectives to your lead generation efforts, ultimately driving your success to new heights.
So, before we start discussing the real cost difference between DYI vs outsourcing lead generation, please remember that not all lead gen companies are the same. Choose the one that specializes in your field, offers a consultancy approach, and can provide the strategic partnership your business deserves.
The Real Cost Difference
Let's dive right in and discuss the cost difference between in-house vs outsourced lead generation. We will begin this journey by addressing the biggest and most important investment: people.
1. Human Capital Costs
In the wild world of B2B life science sales, nurturing leads is like feeding a hungry plant—essential for growth! Picture this: you have a complex product or service in your hands that requires careful explanation and guidance. You need to build rapport, educate potential clients (and more often than not, a whole cast of decision-makers). Then, you need to win their trust and show off your expertise like a botanical wizard.
Nurturing leads in B2B life science sales requires assembling a mighty team of sales reps. It's like trying to juggle flaming swords while balancing on a unicycle—it's a recipe for disaster. Different reps bring their unique skills to the table, allowing you to dazzle potential clients with a circus act that closes deals.
But, maintaining a sales team isn't cheap. It's like feeding a pack of starving lions— those salaries, training, and specialized knowledge come at a cost. Plus, long sales cycles mean that the cash flow can resemble a roller coaster ride. Salaries for sales representatives often constitute the biggest cost drain for companies, but that is only part of the picture:
Commission-based structures
Many sales reps work on a commission-based pay system, where a substantial portion of their salary is tied to their performance and achieved sales targets. This means that during periods of low sales, the company still incurs the fixed base salary expense without generating proportional revenue.
High turnover rates
The turnover rate in sales roles tends to be higher compared to other positions. Frequent recruitment, onboarding, and training of new sales representatives can incur significant expenses for the company. Investing time and money to get new reps up to speed can drain resources, only to have them leave shortly after joining.
Expensive benefits and perks
Companies often provide sales reps with generous benefits and perks to attract and retain top talent. These may include health insurance, retirement plans, company cars, travel allowances, and bonuses. Offering such benefits can add substantial overhead costs to the sales department's budget.
Training and development
Sales reps require constant training and development to stay up-to-date with market trends, product knowledge, and effective selling/lead gen techniques. Investing in sales training programs, workshops, seminars, and coaching sessions consumes a significant portion of the sales budget.
Sales software
Companies invest in various CRMs and sales engagement tools and technologies to support their sales reps. These tools can include customer relationship management (CRM) software, sales automation platforms, lead generation tools, and sales analytics software. The more sales and marketing people you have, the higher the costs associated with acquiring, implementing, and maintaining these tools.
Sales support and administration
Sales reps often rely on administrative staff, such as sales coordinators or assistants, for paperwork management, logistics, and communication support. Hiring and compensating these support roles adds to the overall cost of the sales department.
In conclusion, whether your company consists of 1 or 5 sales professionals working part-time on lead generation, one thing is certain: salaries are the biggest cost drain for B2B companies - at a minimum we are talking about a fixed cost of $5,000 per month/rep, and that is without taking all costs discussed above into account.
2. Sales Software (And Other Hidden) Costs
It is not just the people. Software costs can also add up. Plus, you will likely have hidden costs associated with the use of such tools. If you are using multiple tools for different aspects of your sales process such as email, call recording, and forecasting, you are likely facing extra expenses, difficulties in integrating these tools, numerous implementation meetings, and time-consuming training sessions.
Truth is, you only get value out of sales technology if your team knows how to use it and actively utilizes it. How many potential opportunities are missed while representatives are onboarding? How many revenue-generating activities are neglected when teams are preoccupied with technology-related issues? What tasks could be eliminated from the sales workflow if a single technology could perform the functions of multiple tools?
For example, sales engagement platforms are digital tools that helps companies streamline their interactions with customers. They align sales and marketing processes to increase productivity - they are beneficial for businesses that struggle to engage with customers in an organized and standardized manner. They automate selling actions, gather customer insights, reach out to customers through preferred channels, organize daily activities and tasks, and analyze sales data. Ultimately, these platforms allow businesses to effectively communicate with prospects and customers through a user-friendly interface.
Is a sales engagement platform truly necessary? Well, not really. If you have a small pool of prospects and are confident in your ability to manually track their progress and follow up, then a sales platform may not be required. However, if you plan to scale your lead generation efforts, automate touch points, and analyze results, then using a sales engagement platform becomes crucial.
What is the monthly cost of a typical sales engagement platform? The short answer is that it varies depending on your company's team size and desired features. Typically, software entails a monthly fee ranging from $50 to $150 per user. Certain providers cater to enterprise and small businesses separately, offering different packages or enhanced features at higher rates. On average, the cost of a platform will cost your sales and marketing teams anywhere between $300 to $1,000 per month.
3. Content Writing Costs
Now, let's talk about content writing, the secret weapon in your sales arsenal. Picture this: you're trying to convince a complete stranger (let's say, a pharma executive working at PharmaABC) by email to buy your fabulous software. After spending two days researching this company and learning everything you can about your buyer's persona, you decide that it is time to hit him with your beautifully crafted email. It is well written, it is polite and concise. It looks like this:
Sorry to break the news to you - if your email looks like the one shown above, you might as well be sending it to the spam folder. No one - especially a pharma executive - is ever going to read your beautifully-crafted masterpiece.
In today's cutthroat market, where every Tom, Dick, and Harry is vying for attention, your content needs to shine brighter than a disco ball. It needs to grab their attention, provide personalization, and pack a punch of originality.
Content writing is king. That is why we like to call it "precision writing". But here's the tricky part: writing effective B2B sales emails is a whole different ball game. Even the Hemingways and Shakespeares of the writing world might struggle when it comes to content writing. Your email has to be sharp, concise, and damn compelling. It has to tap into their pain points and make them feel understood, all while being approachable and, dare I say it, hyper-personalized!
And once your campaign kicks off and starts gaining traction, it's time to fine-tune that content to perfection. Iteration is the name of the game, my friend. You have to keep tweaking and testing to make sure your content is performing at its absolute best. It's like sculpting a masterpiece, one word at a time.
Now, let's talk money. Good content doesn't come cheap. Whether you DIY or hire a freelancer on retainer or by the hour, you're looking at shelling out anywhere between $50 and $100 per hour for targeted content creation.
Key Takeways
In conclusion, lead generation is a challenging and costly endeavor. While some businesses may consider doing it in-house, the time and resources required can quickly pile up. Salaries and human capital-related costs can be a significant drain to your budget, including commission-based structures, high turnover rates, expensive benefits, training and development, sales engagement tools, and sales support and administration. Outsourcing to a lead generation company can provide a more streamlined and efficient approach. However, it's important to choose a consulting firm that specializes in your industry. These companies go beyond the traditional approach and offer strategic guidance and support, becoming a true partner in your business growth. Overall, businesses should carefully evaluate the true cost difference between DIY lead generation and outsourcing to determine the most effective and cost-efficient approach for their specific needs. Still unsure whether or not to go the outsourcing route? Book an appointment and get an estimate today!