Should you use a pay per lead agency in the UK?

If you sell low value products at high volume, a pay per lead agency in the UK can work well. If you sell high value, differentiated B2B services, it usually doesn't. The model pays your supplier for producing meetings, not for producing buyers, and in high value B2B those are very different things. I've bought leads this way. Here's what actually happens:

Recently a founder of a B2B business approached me about lead gen consulting. I pitched my standard consulting fee and he came back and told me his budget was tight, and asked whether I could do pay per lead instead, or some version of it.

I could probably have closed that deal. Two thirds of my monthly fee up front every month, then a payment for every lead on top. It would have worked on paper. And in his eyes it was a win-win.

But I said no. Because that arrangement fails both of us.

Why pay per lead doesn't work for me

I've been doing B2B lead generation for over two decades. I've generated more than 2 million leads. I've built a system, I've tested it, and I know that it works - check out my b2b lead generation case study. I have limited capacity as well and I have no interest in working with clients that aren't going to be great case studies for me. So if I've sent you a proposal, it's because I think that there is demand for what you offer. And if there is demand, i know we can capture it.

But what I sell isn't leads. I work with businesses that are serious about building a long term lead generation engine, one that keeps running into the future. The work I do now might generate leads this month, next month, or next year. The system works because it compounds.

That's what makes per lead pricing impossible for me. I can't take the engine away once it's built. So charging by the lead would mean finding a way to bill you for output long into the future, on work I did at the start.

Why pay per lead doesn't work for you either

If lead generation is your top priority, then you need the right solution, not the cheapest one. Those are two different questions.

Buying leads by the unit feels like the safe choice because the risk sits with the supplier. But it doesn't remove your risk. It just moves it somewhere you can't see until later. By the time you spot that it hasn't worked, you have lost valuable time. 

How does a pay per lead agency actually work?

A pay per lead agency charges you a fixed amount for each lead it delivers. Variations on the same idea go by different names. Pay per appointment charges for every meeting booked into your diary. Commission only pays out on closed business. No win no fee means exactly what it says.

The appeal is obvious. No retainer. No setup fee. No committing budget to something that might not produce. You pay for outcomes, and if the outcomes don't arrive, you don't pay. On the face of it, all of the risk sits with the agency.

I understand why it's tempting. I've been on the buying side of it more than once.

What happens when you use pay per lead for a high value B2B service

I've been tempted into this many times (I've spent more than two decades running businesses that sell differentiated, high value B2B services, and I've tried every form of lead generation that exists).

Pay per lead always disappointed. Not because we didn't get the leads. We did. But because they weren't buyers. They were simply people who met our criteria and were willing to speak to us.

That sounds fine until you're in the room. Then you're on the back foot, doing all the persuading, because nobody in front of you arrived with a problem they were trying to solve.

That's the structural issue. Your supplier is paid for producing meetings, so meetings are what you get. Nobody is being dishonest. The model is simply pointed at the wrong outcome.

And it doesn't cost you nothing. The real bill goes unnoticed. It's opportunity cost. By the time you work out it isn't producing, you've lost months, and it only takes one or two competitors who spent that same period building a proper lead generation engine to damage your business’s long term prospects.

How to generate leads instead

If you're selling something high value and differentiated, the thing worth buying isn't the leads. It's the strategy and the system that produce them, and that keeps producing them once it's built.

There are three ways to do that with me. Lead generation consulting, where I build the engine for you (this is a GREAT alternative to hiring someone). The B2B Lead Accelerator, where I coach you through building it yourself. Or the AI Growth Community, where you get the method, the training and the room full of people doing the same thing, for a monthly fee that costs less than a single lead from most agencies.

Pay per lead agencies in the UK will keep selling on how little you have to commit. But how many of them have long-term contracts? If you dig you will find the answer is very few - because the relationships break down very quickly.

By Heather Baker, founder of the AI Edit.