By Frans Van Hulle
Note: This is the sixth article in a series on technical needs for lead generation.
Part 1: The Importance of Technology and Automation in Lead Gen
Part 2: Tech Requirements for Lead Gen
Part 3: Designing a Successful Lead Gen Form
Part 4: How to Automate Lead Verification
Part 5: Developing Sophisticated Lead Scoring
As we discussed briefly in previous posts, distribution models in the lead generation industry tend to be complex and often not very transparent for buyers. Assuming you are or would like to buy leads from external parties, it is important for lead buyers to know the available options between different shared and exclusive lead models, and what the pros and cons of each model are.
Let’s take a look at the differences.
Shared Leads
Most lead generation companies offer both shared and exclusive leads, although shared leads are more common. When you’re buying a shared lead, it means the lead can be sold up to five times, sometimes more, to different buyers.
Depending on the vertical or industry, these buyers are most of the times a mix between national and local buyers. Although shared leads increase competition for buyers to certain degree, since multiple buyers have the lead’s contact data, they are sold at a much lower price than exclusive leads enabling advertisers to buy more volume. Usually, buyers with a strong brand and optimal sales processes can really make shared leads work for them since their brand awareness is high and they are able to follow up fast – two factors that are helpful in converting leads in a shared lead model.
The Pros:
- Shared leads are cheaper than exclusive leads
- Creates more value for consumers because they are able to obtain and compare multiple quotes
- Potentially higher volume available
The Cons:
- It may be harder for buyers to convert shared leads when their brand awareness is low, or if they haven’t defined an optimal sales process
- Creates a lack of transparency because buyers don’t have insights into how many times leads were sold and to whom
- This model increases the chance that bad leads may be forwarded
Exclusive Leads
As mentioned above, most lead generation companies offer both types of leads. Exclusive leads take away the competition factor but are often sold at a much higher price. The most common type of exclusive leads is a live transfer, for example via click-to-call functionality. While exclusive leads allow buyers to have dibs on certain leads, they have less of a chance to be selective about leads.
Pros:
- Overall quality may be higher
- If your public brand awareness is low, exclusive leads may be the way to go
- Puts you at an advantage because you are more likely to contact leads first
- Exclusive leads give more possibility to target on certain demographics (if required)
Cons:
- Higher cost
- Potentially lower volume
- The higher the lead price, the more likely potential fraud will occur
The shared lead model is usually the most common in the lead generation industry. When you first start working with a lead generation company, it’s important to define well which types of leads you would like and what results you are looking for. In a healthy model, advertisers should be able to analyze which model works best for them by having an efficient sales process, and by measuring which lead model produces the highest ROI. That’s also why it’s beneficial to have a good lead management system in place that allows you to analyze the buying process per lead or source in order to define which model works best for you.
Serious lead generation companies usually support both models and can help you maximize your ROI by incorporating your feedback into the lead gen process. If you should have complaints about quality, sources or channels, lead gen companies should be able to tweak their own practices so you can obtain higher quality leads.
Alternatively, you may want to consider becoming part of a lead exchange that allows you to connect to multiple sources. Lead exchanges allow buyers to gain control and put them in the driver’s seat when it comes to prioritizing which types of leads and sources work best for them.
Frans Van Hulle is CEO/co-founder of ReviMedia.
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