What is the difference between pay per sale telemarketing and pay per lead telesales?

 

Pay per sale telemarketing is a service where you, the client, pay for the lead only if it converts into a deal. Pay per sale telemarketing is a massive benefit for whoever purchases the marketing leads as it guarantees a positive return on investment. You cannot go wrong, paying for the lead only when it results in a sale from your team. 

However, the lead provider will often ask for a profit or revenue share. 

With a pay per lead telemarketing campaign, the client will purchase leads regardless of whether they close or not. In this case, the client is paying for the opportunity to pitch the lead. 

 

Who pays for the leads that do not convert into a sale in pay per sale telemarketing?

Unfortunately, all the risk is transferred from the client to the marketing companies. This is why the pay per sale method has a higher fee than pay per lead. You will find that many marketing agencies will ask for a bonus or commission on the deal to pay for the time spent on all the opportunities that did not convert. 

What is a typical ROI for pay per lead telemarketing?

In most marketing campaigns, lost leads are worked into the lead price. If a sale value is £1000 and you are buying your leads for £100, you need to close one out of the ten opportunities. For highly qualified leads, a 10% closing rate is very achievable. 

If you closed two sales from the ten leads, you would be on a 100% ROI with a 20% closing rate. You can see now how pay-per-lead telemarketing is fair for all parties involved. But it would be best if you had a reasonable lead price, high-quality opportunities, and a good closing rate. 

 

What are the reasons for a low closing rate?

One of the reasons for seeking a pay per sale telemarketing campaign is because your sales team may be experiencing low closing rates. Coupled with a tight budget, you may feel that marketing agencies are taking advantage of you and selling poor quality leads to increase their monthly bill. 

You should, of course, consider everything when outsourcing your appointment setting or telemarketing. 

However, I can assure you that it is in everyone’s interest to have a positive ROI when using lead generation. 

You may have an unrealistic expectation of how many leads should be closing. Generally, you should not be paying more than 10% of the lead’s sale value for the opportunity.

Even though you may be receiving high-quality leads, there will still be a large proportion of the leads that won’t close, regardless of how good your sales reps are. 

Think about the last time you purchased a car, pair of shoes or a watch. How many did you try on, test drive and receive quotes for before you found the right purchase for you? 

We discover many leads with prospects who have a genuine interest in your product. However, just because someone has a genuine interest does not mean you will be able to close a deal. 

Here are some reasons you may not close a deal:

  • They may not have permission to access the required budget to purchase your product or service.
  • They may not meet the forecasted cash flow to make your product or service viable.
  • They may get a better price or product from a competitor.
  • Their initial requirement may no longer be a priority.
  • The decision-maker may leave their position, and it could take months to pick up this project again.

 

Even if you don’t close a sale, what benefit did you gain?

You should know that most leads do not end in a sale. But they must still be acquired, contacted and pitched. This is a time-consuming process, and even though they may not close, they still provide long term benefits.

Even though they didn’t buy your product or service, they have now been made aware of its existence. You have also gained the leads’ contact details with permission to contact them in future. You identified decision-makers, collected data on their budget, and discovered potential projects.

You should continually expand, nurture, and maintain your database as a business. Populating your business CRM is one of the key benefits of using a telemarketing team such as Midas Consultant.

Do not purchase marketing services and then judge them based on how well your sales team closes them. You should evaluate your marketing team on how much data they bring to the table. It would be best to look at how many opportunities are introduced to your database and how accurate the data is. Data enrichment is a valuable resource.

 

What is the difference in cost and billing structure?

Pay per lead marketing campaigns is when the lead is billable regardless of whether it results in a sale or not. 

You can typically expect to pay around £50-£500 per appointment with a prospect interested in your service or product. It is tough to give an accurate figure as each industry and product has a unique sale price, profit margin, and closure rate.

At Midas Consultant, our appointment setting starts at £50 per lead. An entry-level appointment setting campaign would typically consist of around 20 leads at £1000. 

That is 20 opportunities for you to pitch your product and make a sale to an informed and warmed up prospect.

Suppose your service sells for £1000; each time you make a sale, you can reinvest that revenue to sit another 20 meetings. In that case, you can see why affordable lead generation is so heavily demanded.

At Midas Consultant, we will allow you to set aside a week or two in which you can back to back pitch and quote interested parties. By closing just one of the 20 appointments, you would cover your marketing costs and have the luxury and benefit of the service provided.

If you close two of those appointments, you will have a 100% return on your investment. At Midas Consultant, we expect our appointments to have at least a 20% chance of closing. All our leads have a budget and project coming up in the next few months.

If you read through all of this and feel like doing your own telemarketing you can read our B2B telesales tips and what is cold calling articles. 

Contact Midas Consultant today to discuss an affordable telemarketing campaign