Buying leads for your business: Standard practice or a risky move?

Leads are the lifeblood of your business. Marketing generates leads and leads generate sales. But filling your pipeline with enough leads is challenging. It’s the biggest headache most marketers have.

91% of marketers say lead generation is their most important goal. So, if you’ve already tapped your existing customers and need more leads, why not buy leads for your business?

Buying leads is a controversial issue. Regardless of which camp you fall into, we can all agree that it’s a high-risk gamble but can yield results. Let’s unpack whether buying sales leads makes sense or if it’s wiser to focus on manual lead generation.

Should you buy sales leads or manually generate your own list?

Here’s our opinion: Most companies won’t benefit from buying leads. It’s always better to work on generating your own leads by building content, focusing on brand and product marketing, and excelling in your niche.

Too many salespeople focus on quantity over quality. Yes, if you buy leads online, you'll have an enormous quantity of people to reach out to, but not every lead is ready to buy or listen to your pitch. Here’s what cold calling a random list of people who’ve never heard of you looks like, according to research from Market Splash:

• It takes an average of 18 calls to reach a person.
• 90% of first-time voicemails are never returned.
• 80% of cold calls go unanswered.

In other words, people don’t want random calls or messages from someone they’ve never heard of. This is what running through a list of purchased leads always leads to though.

Contrast this with manual lead generation. The people have likely engaged with you and are closer to buying. While they might not be a hot sales lead, they’re warmer than a list of random people who may or may not be in your target audience.

Is it legal to buy business leads for your sales team?

In most cases, buying leads is not inherently illegal. However, there are regulations to be aware of, including the CAN-SPAM Act. It’s not legal to email anyone without their express permission.

For example, if you buy a bunch of leads on the dark web, there’s a high chance that illegal activity is involved. That’s why if you do buy leads, vet the source. Ensure the provider is forthcoming about how they gathered their leads and that they have consent to sell information.

Now, let’s be realistic.

Are all providers transparent? No. 

Are all providers telling the truth? No. 

Is there a high level of enforcement? No. 

It’s really a matter of ethics. Any veteran business owner knows that integrity is a key piece of long-term success, so it’s best to play by the rules.

Advantages of manual lead generation

Manual lead generation is an excellent alternative to lead buying. Whether you generate new business the old-fashioned way or use advanced technologies like AI, we count it as manual. So, why should you opt for manual lead generation?

Customized lead lists

Generating leads yourself enables you to customize your parameters. Most bought lists don’t offer the same level of targeting, meaning you could be buying leads that aren’t a good fit for your company.

Manual lead generation enables you to drill down deeper, which will help grow your sales success rates.

Less saturated leads

Building lists yourself means you’re potentially breaking new ground. In contrast, bought lists result in thousands of companies competing for the same sale. Remember, purchasing leads means you’re essentially fishing from the public pond.

Complete control during the lead generation process

How warm are your leads? Are they ready to buy? Are they even interested? In-house lead generation answers these questions, letting you plan your next moves. The same cannot be said for purchased leads, which are likely all at different stages of the customer journey.

If you have a CRM, your list contains the information you need to tailor your sales strategies according to where each lead is in the buying cycle. This means better outreach and higher close rates. Buying leads, on the other hand, means flying blind. 

No need for additional validation of lead data

Lead validation involves reviewing each lead individually to ensure the information is legitimate. If you build your own lead pipeline, you can perform this validation on the spot, whereas purchased lists require separate validation.

If your sales team wastes time on manual validation, they’re not selling. Unfortunately, many lists are filled with incorrect and nonsensical inputs, requiring validation before use.

Advantages of purchasing leads

Purchased leads get a bad rap in the B2B world — and for a good reason. Yet some businesses can benefit from purchasing leads with the right strategy. 

Here are some of the advantages of buying leads:

More cost-effective

Lead generation costs have consistently been on the rise for years. According to Belkins, a lead generation provider, they reported their own cold email outreach resulted in an average cost of $250-$300 per lead.

Turning to paid lists drives down your costs because the cost per lead is far lower. The contact data is already ready for use; all you have to do is start dialing or emailing.

Lead providers can deliver leads regularly

The top lead providers regularly update their lists. They constantly scour the web and exploit their networks to provide new contacts consistently. In some cases, subscribers receive regular files with new leads directly to their inboxes.

More time-efficient

Despite lower overall success rates, paid lists can be more time-efficient because you’re skipping the process of building your list. Even if only a few leads out of a thousand become buyers, the time saved can sometimes equal greater profits.

More variations in qualified leads

Paid lead providers usually have more extensive networks from which they draw information. While your manual lead generation efforts may only consist of a few channels, casting a wider net with paid lists can open up new opportunities.

Update dead lists through data enrichment

A little-known benefit of paid lead lists is that you can use any of their data to update your own lists. Some companies find the same contacts on a paid list and their internal lists. If your prospect's email address differs, you may be able to update your list with information you wouldn’t have otherwise found.

When should you buy leads from a lead provider?

Overall, generating your own leads is more effective than buying a random list. However, some businesses can’t generate leads fast enough for one reason or another. In some scenarios, buying leads may be the best option.

Here are three use cases for buying leads:

1. Your sales pipeline is empty

Newer companies often struggle to generate leads. When your sales funnel is empty, putting your sales team to work on less-qualified leads is always better than no leads. Filling your pipeline with a purchased list is an ideal stopgap if you’re still shoring up your manual lead generation efforts.

2. You need fresh leads to fuel expansion

Even companies with effective lead generation motions hit a wall sometimes. Buying leads can inject some fresh life into your pipeline. With more variations in paid lists, investing in a lead provider can unlock new avenues to revenue.

3. You’re offering new products and services

Horizontal or vertical expansions enhance your catalog and increase the number of income streams. However, your new products and services might not match your existing audience. In this case, starting from ground zero with a paid list can boost your expansion efforts until your manual lead generation efforts bear fruit.

How to assess lead quality

Lead quality is everything. Generating low-quality leads that are a poor fit for your business is a waste of time and incredibly frustrating for your sales team. Even the best salesperson in the world can’t (and probably shouldn’t) convince an uninterested customer to buy. 

So, what makes a high-quality lead?

They fit your audience profile

Draft an Ideal Customer Profile (ICP) as the model for your lead generation campaign. An ICP is a semi-fictional model of the perfect customer, detailing who they are and what they want. Most ICPs include:

• Age
• Gender
• Location
• Average income
• Buying intentions

Few leads will perfectly match your ICP. The goal is to determine quality by how many characteristics they share with your ideal customer.

They need your product or service

A relevant lead also needs something that your product or service can solve. For example, if a customer has trouble keeping their Gmail contacts organized, a product like Streak’s CRM could help. In this case, the lead would be a viable candidate because their need is one that our product directly solves.

They’ve expressed purchase intent

Just because someone could benefit from your product or service doesn’t mean they’re actively shopping around the market. Two types of purchase intent exist:

1. There’s a desire to purchase a product or service to solve their problem.
2. There’s a desire to purchase your product or service to solve their problem.

The latter is less common, but a customer actively looking to invest in a product or service is a prime target.

They have the potential for repeat purchases

The best customers are those that keep coming back for more. This is what sustains top brands over time. For this, look to the 1,000 True Fans theory. If you have 1,000 regular customers paying $100 annually, you already have $100,000.

And that’s why leads who display potential for repeat purchases are so valuable.

Streamline your lead management and qualification process with Streak

Lead generation is only the first step to landing a new customer. Whether you buy leads or generate them yourself, you need a setup that primes you for success and keeps you organized once you win business.

Streak eliminates the challenges of tracking thousands of leads in your pipeline simultaneously. With Streak's CRM tool, you can simplify your sales process by structuring your Gmail inbox to build upon your data and serve as a visual pipeline of your active deals. Here’s a quick glimpse at how it works:

‍Discover why 750,000 people already use (and love) Streak by requesting a free 14-day trial today.

Frequently Asked Questions

Is buying leads a good idea?

Buying leads can kickstart your efforts if you have an empty pipeline or are expanding into new territory. However, it’s almost always better to generate high-quality leads manually.

How do I find high-quality leads for my business?

Finding high-quality leads is a long-term process. It requires building a value-driven content pipeline, meeting customer expectations, building a social media following, and much more. There are no shortcuts to consistently delivering high-quality leads.

How much does it cost to buy sales leads?

Costs vary wildly based on industry, list size, quality, and provider. Some lists may cost a few dollars, whereas others may cost hundreds or thousands of dollars.