How Much Does Lead Generation Cost?

The age-old question: how much does lead generation cost?

Lead generation is like a blind date: sometimes, you're set up with the perfect match, while other times, you're left awkwardly carrying on a bleak conversation, slamming down drinks, and wondering if the person across from you even has a pulse.

But let's be real—if done correctly, lead generation can be the heart and soul of any thriving business. 

That's where this post comes in. We'll break down the nitty-gritty details of the cost of lead generation.

We'll look at average costs across different channels and tactics, and even some insider tips on where to focus your efforts for maximum ROI.

Think of this as your comprehensive guide to not just understanding lead gen expenses but optimizing every cent you spend on filling that sales funnel.

Because, at the end of the day, acquiring new customers shouldn't require taking out a second mortgage or feeling like that blind date you never wanted.

Here's a sneak peek at what we'll cover:

• ✅ Typical cost per lead and numbers to expect 

• ✅ Pricing structures used by lead gen services and agencies

• ✅ Estimated costs for channels like email, SEO, paid ads, social media, and more

• ✅ Smart strategies for B2B companies to zero in on the right lead sources

How Much Should Lead Generation Services Cost Your Company?

Lead generation is the fuel that keeps businesses running and growing. But hang around the marketing world long enough, and you'll quickly realize there's no one-size-fits-all cost for filling that sales funnel.

Pricing can vary wildly depending on factors like your industry, company size, sales cycles, and, specifically, which lead gen tactics you choose to tackle.

That's where tapping into the expertise of a seasoned lead generation agency can be a game-changer. 

These specialists live and breathe lead acquisition, constantly testing and optimizing campaigns to generate more bang for your buck. But how much should you budget for their services?

While there's no hard universal answer, here is what Hubspot found when calculating CPL by industry.

Meanwhile, for more comprehensive lead generation programs, you could be looking at $1,000 - $5,000 per month or more from the top agencies.

Of course, these are just rough benchmarks. We'll break this down a little more in-depth as we move further into this article. 

Average Cost Per Lead

At the end of the day, lead generation is the fuel that keeps the fire burning. 

But we can't get it twisted - not just any old lead will do. You could have thousands of contacts, but if they're not a fit for what you're selling, those "leads" are about as useful as a screen door on a submarine.

That's why experienced marketers zero in on cost per lead - but more importantly, the cost of a qualified lead. One that matches your ideal customer profile like a glove. This is the number that'll make or break whether your marketing efforts actually deliver an ROI.

So, how can you ensure you're attracting quality prospects and not just tossing money into a fire pit? We'll dive into an accurate way of calculating this so you can better identify whether your marketing efforts are better focused on other channels. 

How To Calculate Cost-Per-Lead (CPL)

Calculating cost-per-lead is actually quite easy. You simply divide your total marketing spend by the number of total new leads. 

For example, if you spent $1000 on your social marketing campaign and yielded 20 new leads, your cost per lead would equal $50. 

This applies across all marketing channels, whether social, SEM, or SEO; the same formula applies. 

With involve.me, you can easily create your own CPL calculator. Whether you're an agency looking to attract more leads or simply curious about the actual ROI on your marketing budget, this can be an excellent resource.

It is extremely simple; once you log in, follow the steps below:

Step 1: Create New Project:

Step 2: Select Create with AI:

Step 3: Provide AI with the prompt and click Generate

Step 4: Hit Publish

Try it yourself:

Lead Generation Pricing Breakdown By Channel

Alright, now that we've covered the importance of calculating your cost-per-lead, it's time to dive into the nitty-gritty details of what lead generation costs across different channels and tactics. Because let's face it - your approach to attracting those potential customers will HUGELY impact your pricing and overall investment.

From old-school classics like email marketing to modern digital marketing strategies spanning SEO, PPC, social media, and more, the price ranges can vary massively. Even the same channel can have wildly different costs depending on factors like your industry, audience targeting, campaign scale, and other variables.

That's why I've broken down the typical lead gen pricing for some of the most common channels used today.

Utilizing Lead Lists

Generally speaking, and of course, depending on the industry, you can expect to pay anywhere from $500 to $2,000+ per 1,000 contacts for a decent B2B lead list from reputable lead generation companies. For highly targeted, qualified lists in ultra-competitive industries like finance or tech, that cost-per-lead can skyrocket to $50 or even $100+ each.

At the lower end of $10-30 per lead, you'll typically find less refined lists requiring more manual vetting. As with most things in marketing, you get what you pay for in terms of precision. Thoroughly researching and vetting lead providers for quality over quantity is crucial.

Lead Generation Software

Whether you've outsourced the work or decided to do it in-house, tools/software like Involve.me, LinkedIn Sales Navigator, and Hubspot, to name a few, can be real assets to your lead generation strategy. While these software aren't "free," if done in-house, they could save your company A LOT of money in the long run compared to investing in a full-blown marketing agency.

While it is challenging to pinpoint the exact CPL for lead generation software, on average, you'll be spending anywhere from $12 to $100 per month. 

Email Marketing

When done correctly, email remains one of the most cost-effective lead generation channels. While the exact numbers can be challenging to average from a cost-per-lead perspective, here is some interesting data pulled when email marketing was done in-house. 

In terms of outsourcing the email marketing to an agency, here is some additional data about the average cost:

Of course, email by itself is just the start of the sales process. When fully built out with nurturing sequences, sales enablement, and tracking analytics, a comprehensive email lead generation program can run businesses anywhere from $1,000 to $10,000+ per month, depending on scale. But bang-for-buck-wise, assuming it was done in-house, it still remains one of the most accessible and cost-effective options available, especially for B2B.

SEO (Search Engine Optimization)

The price can vary depending on whether you're considering hiring an SEO agency or an individual consultant. The typical SEO agency cost can range from 2,500 to 10,000 per month, depending on the scope of work needed. If you decide to go the individual consultant route, you're looking at a range closer to 2,500 to 5,000 per month. 

Regardless of which route you decide to go, you want to ensure they:

1. Are staying up to date with Google's best practices

2. Can demonstrate previous client work (aka testimonials)

3. Practice what they preach (look at their current website)

4. Are transparent about their process

SEM

When it comes to pay-per-click advertising and SEM for generating leads, you've got to be smart with your spending. Average costs can vary massively based on your industry competitiveness, audience targeting, ad quality, etc.

That said, most businesses can expect to pay between $1 and $7 per click on the Google Search Network for highly commercial keywords related to their products or services. The better aligned your ads and landing pages are to your target customer's search intent, the higher the likelihood of driving high-quality leads that convert.

Companies often allocate $5,000- $50,000+ per month to SEM, depending on their scale and lead volume requirements. As with any paid channel, continual optimization is key to driving down the cost-per-lead over time.

Social Media Marketing

Social media advertising has quickly become one of the go-to lead generation channels, allowing super granular targeting across platforms like Facebook, Instagram, LinkedIn, and more. But as popular as it's become, don't expect it to be cheap.

Here is some interesting data about the pricing breakdown from platform to platform via cost-per-click:

Pricing for social media marketing can vary tremendously based on factors like audience size, competition levels in your industry, ad creative quality, and more. On average, though, most businesses report paying anywhere from $5 to upwards of $50 or more to generate a single lead from social media ads.

The wide range stems from the customizability - while some companies just run basic boosted posts, others invest heavily in sophisticated audience buildouts, A/B creative testing, retargeting sequences, and more to maximize ROAS. As with anything, you tend to get what you pay for in terms of lead quality and volume.

Content Marketing

Content marketing is the name of the game for consistently attracting quality leads, especially in the B2B world with its longer sales cycles. But let's be real - developing thumb-stoppingly good content that actually converts doesn't exactly come in at a bargain.

While costs can vary based on factors like in-house capabilities versus agency support, recent industry data shows that the typical lead generated through content costs around $142 for B2B companies—and that's just an average.

The moral of the story?

Whether you're a start-up in your parent's garage or an established enterprise, be prepared to make a healthy investment if you want content marketing to truly move the needle for you. Quality almost always trumps quantity in this arena. Having a documented strategy with the right audience targeting, creative hooks, and consistent promotion is critical to maximizing your content ROI.

Video Marketing

Look, there's no dancing around it - video marketing isn't a cheap play, especially in the B2B space, especially when you're looking at producing high-quality, production-value video content. 

On the low end, you can expect to pay $60 per lead, but the price can skyrocket to nearly $300 just for one lead.

Here's the thing: you have to factor in promotion costs to get that video in front of the right eyeballs, agency fees if you outsource creative execution, and budget for an entire comprehensive video marketing funnel. That's when the cost-per-lead metric starts to really jump.

However, when it's done right, video can be an incredibly powerful medium for forging personal connections, showcasing expertise, and ultimately converting those hard-to-get B2B buyers. You just need to go in with an intelligent distribution strategy and reasonable lead-gen expectations.

It's about balance.  As with anything in marketing, you tend to get what you pay for when it comes to quality B2B lead gen. 

Where To Best Focus Your B2B Lead Generation Efforts

It really boils down to industry and preference. Not all marketing efforts are created equal, so you'll have to continue testing to see which channel yields the best ROI for your company. As long as you're continuing to improve your strategy, paying attention to critical details such as:

• Conversion rate optimization

• Lead quality

• Lead nurture methods

• Identifying the cost per lead by industry

• Knowing your target audience

• Your overall marketing budget

• Company revenue

Keep all these metrics in mind, and you should be in good standing. 

Final Thoughts On Lead Generation Cost

Regardless of which channel you choose, outsourcing lead generation will come with a price tag. 

The bottom line is that you need to figure out which channel is going to work best for YOUR AUDIENCE.

Taking into account age, demographics, etc, will all play a pivotal role in determining which marketing channel is going to work best for your business. 

One way to ensure you’re maximizing your lead generation efforts is by utilizing a lead generation software like involve.me.

Whether you’re a seasoned marketer or hiring an agency, involve.me offers various lead-capturing tools. With the power of AI, you can easily create engaging calculators (like the example above), quizzes, forms, and eye-catching landing pages. 

If you're already driving leads to your business, you might as well leverage that traffic by continuing to cycle them through your sales pipeline.

As always, continue to test, analyze, and improve, and I promise you will not fail. 

FAQ

How Much Does Lead Generation Cost on Average?

The average cost of lead generation costs ranges anywhere from $50 to over $400 per lead. The industry has a HUGE influence on cost.

What Factors Affect the Cost Per Lead in Lead Generation?

Several factors affect the cost per lead, including the type of lead, the digital marketing channels used, the complexity of the sales cycle, and the lead generation pricing models. 

Is Investing in a Lead Generation Program Worth the Cost for Small Businesses?

It really boils down to your budget. If your company can justify the cost, meaning you'll get a healthy ROI, then yes. If not, perhaps in the beginning, only purchasing lead generation software and building up from there would be more suitable.