Let's imagine a situation. You need to outsource lead generation. Yet, you don't know what to choose. So you hire an industry-leading service provider with years of experience and complete knowledge about lead generation companies. Sort of like a buyer in shopping.
A buyer like this shares his comprehensive knowledge with you, you become an experienced buyer yourself, and now you just have to point your finger at a B2B company and say: "This one!"
Oh, if only that was possible. It would've shortened the buying cycle and saved your company a significant amount of expense. Unfortunately, in real life, people often have to make purchase decisions with a dearth of insights, despite drowning in millions of web pages of information.
Here’s an example: Your friend cooks a soup and asks you to add a bitter gourd to it. If you’re not familiar with East-Asian cuisine, you probably wouldn’t know what that is.
You have a goal but you don’t really know how to achieve it. To successfully add a bitter gourd to your soup, you probably need to Google some guidelines or ask your friend who is a fan of Chinese food.
The difference between this soup and business decision-making is that in business, you can’t Google a comprehensive answer within two minutes. It takes years of studying and work to become an expert in a particular area.
So, when a company does research on the topic of outsourced services, they face a lot of obstacles. One of them is that although there are millions of search results, most of them aren’t that insightful.
That’s why we created this guide–to share our professional expertise, buying suggestions, market research, and lead generation marketing trends.
Table of Contents
- How Lead Generation Companies Work
– What to expect when you’re outsourcing lead generation
- How to Filter Lead Gen Companies
- Lead Generation Expert Tips
- Lead Generation Companies Analysis (Based on Clutch)
- Lead Generation Trends 2021
- Lead Generation Companies. Are They Worth It?
How Lead Generation Companies Work
Let’s start from the beginning with the definition and what lead generation companies do:
What is lead generation?
Lead generation is a process of finding, contacting, nurturing, and converting leads into potential buyers of your services.
This process is very complicated and definitely is not easy. That’s why you can outsource a lead generation company to help with sales development and bring efficiency to every sales process.
What is a lead generation company?A lead generation company is an organization that aligns sales and marketing efforts to create business opportunities, with an endgame goal of growing sales funnels for its clients. Such companies specialize in sales development and have a full technical stack and professional teams to execute lead generation for you up to perfection.
But what does a lead generation company actually do?Lead generation company analyzes your services, your existing clients, creates ICPs and buyer personas for the future outreach, researches leads that fit that profile, chooses channels for the outreach, contacts leads, and lands an appointment with a potential buyer.
Most importantly, a lead generation company feels like an extension of your own team because their initial goal is to help you grow.
What to expect when you’re outsourcing lead generation
Typically, when an organization makes a decision to look for an outsourced lead generation company, they don’t know what to expect. Obviously, there’s a need to fill the sales pipeline with quality leads, but there’s little understanding of how providers actually achieve this goal, and more importantly, what’s necessary for their particular business. Market research might also be tough.
We have studied the top fifteen lead generation companies on Clutch and found that an overwhelming number of unique services are offered, notably 255(!) unique entries.
For a buyer, this abundance is overwhelming and may even cause buying analysis paralysis. Some of the listed services might perplex you as well. For example, there are lead generation companies that provide accounting, corporate IT training, custom software development, electrical engineering, film services, privacy shield notice, technical support, etc.
If you take a closer look, many of the “unique” services differ in name but indicate the same service. In the example below, data enrichment can be listed as research and analytics, B2B email list, database scrubbing, and email verification—which all refer to the process of collecting information about leads.
To not get lost in this chaos and make the right purchasing decision, a buyer needs to understand the lead generation process, its stages, and its components.
The goal of this article is to provide comprehensive information on these so that you comprehend what you really need. B2B lead generation is a conjunction point of buying and sales processes.
There’s company A that has particular problems and company B that solves them. They exist simultaneously and in parallel, but it’s B2B lead generation that joins them together. Although described as a funnel, consider it a filter for both buyers and sellers.
There’s plenty of fish in the sea, but only a few of them are a good fit for your business. If you arrange your lead generation process properly, you will be in control of the filtering process. Otherwise, your potential buyers will move in their own directions.
In the past, there were no filters, and teams wasted their time and efforts on prospects that never needed their products or services. The B2B lead generation experts began sorting contacts to keep only the prospective ones. This strategy enabled sales managers to focus entirely on good-fit companies while SDRs and researchers were able to carry out the “gold panning.”
How to Filter B2B Lead Gen Companies
Buyer persona (BP)
If you develop a CRM for hospitals, you won’t need to contact restaurants, law firms, or any other entity except for healthcare organizations. You will most likely need to talk to the head of the marketing department or chief physician rather than an accountant, a guest service associate, or a facilities manager.
In most cases, the buyer persona (BP) is defined by a company prior to creating a product or service. It outlines what you sell and to whom and describes what business problems and tasks you can solve for a particular business.
Without the BP, you’re unlikely to succeed. However, some organizations don’t have one. Experienced lead generation companies ask their clients for a detailed description of their buyer persona before they begin data enrichment.
At CIENCE, we have a specific questionnaire called ideal customer profile (ICP) for our client companies to complete. Advanced techniques include predictive scoring and developing lookalikes for current best customers.
Data enrichment (DE)
Data enrichment services offer:
- ❌ Illegal web scraping
- ❌ Reselling a ready-made contact list
- ✅ Data subscriptions
- ✅Human-driven research on the web
- ✅Software-augmented, human-driven research
As an agency driven by both human and software-augmented research, we provide insight into a researcher’s daily work at CIENCE.
Lead qualification (LQ)
Once you’ve obtained your lead list, you need to qualify them. You should ask the following questions:
- Do they have an undiscovered need?
- Do they need to be educated on your offer?
- Do they use your competitor’s product or service? (incumbents)
- Do they have the budget to make a purchase?
- Are they ready to buy? (timing)
- Do they realize the problem you can solve?
- Do they know that your type of product or service exists?
- Can the lead generation company do it themselves (in-house)?
To get these answers, you’ll need to ask the decision influencers or decision-makers directly. That’s where you need a person to begin the conversation with prospects. We call this position a sales development representative (SDR), though there are many other names for this role (business development, account development, inside sales, or market development reps).
Sales development representatives use different channels, including:
- Social networking websites
- Offline (direct mail, in-person)
- Text messages
These aren’t interchangeable. According to CIENCE’s VP of Sales, Michael Maynes, the best possible outreach is multichannel. If a business wants to succeed in lead generation, they need to make multiple touches via email, phone, and social networking websites within a certain window of time.
The SDR's should be expertly skilled at:
- Communication through different channels
- Rejection handling
- Turning negative responses into positive ones
They need to understand how to write a follow-up that will eventually result in an appointment. However, the composition of the initial message (email), and templates in general, should be entrusted to professional copywriters. Read more about the Day in the Life of an SDR and gain insight into the daily operations at CIENCE.
Many lead generation companies forget that a complex multistage sales development process needs someone to manage, control, and monitor it. One of the main reasons organizations outsource is to save their managers time for more important tasks. That’s why we believe that lead generation companies should also provide managed services that include reports, analysis, and strategic planning. Two advantages include:
- Ability to leverage the experience of an expert
- Allows pattern-matching across similar clients, industries, and target audiences.
Managers at lead gen companies typically run various projects simultaneously. Their experience and advice on campaigns are extremely valuable. The following is a matrix showing lead generation services and the particular pain points they solve.
Lead Generation Expert Tips
Here are forty tips from CIENCE experts that organizations should follow to select the right B2B lead generation company:
Research is key
- Look up the case studies. These can usually found on their website.
I would certainly look at how they solved particular problems for sales teams.
Andrew Khvatov, CIENCE Internal Team Lead
- Search for published reviews. Check out review sites such as Glassdoor or Clutch, or type "[company name] reviews" in Google.
- Look at the clients they’ve worked with. It’s a good sign when a lead generation company places their clients on the website.
- Look at their partners. This indicates that they’ve been on the market for several years and have built their own network. This can usually be found on the website.
- Look for professional certifications. You can also find these on their website or via Google.
- Pay attention to their lead gen methodologies. Check out what techniques they use to reach target personas. Look at the Solutions or Services sections on the website.
- Check their performance at each of the “gates”:
When working with the provider, check their performance at each of the “gates.” To set an appointment, you need a conversation. To start a conversation, you need good emails sent at the right time to the right person. To achieve it, you need to have the contact info of the right person. To gather that information, you need to know who you are looking for and how to go find them!
John Girard, CIENCE CEO
- Check out the team structure. Determine how they communicate and perform sales development activities, tasks, processes, and projects.
During a discovery call, I would ask about their strategy. How do they organize any lead generation process? Does one SDR fulfill all functions: campaign management, data enrichment, template writing, outreach to leads? Or do they have different people running these processes? I’d rather work with a team of professionals because one person can’t do all these tasks efficiently.
Rade Kemalova, CIENCE Internal Team Manager
- See what they have done in your particular industry.
Look at a broad scope of industries worked with to ensure creativity of strategy and variety of tactics.
Eric Quanstrom, CIENCE CMO
Identify the experience of this company within your industry, analyze its target market. Are there any successful cases of providing services to companies in the same field?
Anna Svetlichnaya, Head of Sales Operations Specialists Department
- Look at what kinds of engagements might scale with success. This includes time to market, number of resources, and contract lengths.
- Check whether they provide test leads.
Special focus should be on the quality of test leads: are they easy to review, do they fit your Ideal Customer Profile, and were they delivered on time. It will be easy to identify if these leads are up-to-date after the first outreach. You’ll need to check the percentage of bounced emails and types of responses you receive. In case you get negative replies, saying that people are no longer with their companies, this is a trigger for you that the list might have been bought. At the very least it’s dated.
Anna Svetlichnaya, Head of Sales Operations Specialists Department
- Ask what programs the lead generation company uses. If they don’t have the right software, research will be longer and the quality of leads will be under question. Find out if they are tech-savvy and utilize the newest tools and software. Also, identify milestones that are carried out solely by human touch.
- Ask if they use human intelligence. People can provide their expert opinion. Furthermore, they can go beyond any preset list of requirements. For example, if a machine looks for marketing managers, and a person’s position is a demand general manager, a tool will most likely miss him or her on the list.
During the discovery call, a salesperson should ask more questions and identify your needs rather than recite their capabilities and uniqueness. A sales rep is usually the face of the company, so pay attention to their manner of communication, integrity, and the way information is communicated to you.
The process of cooperation
- Be in control of how leads are qualified. This means by specific titles, industries, etc. In other words, these leads should fit your ideal customer profile.
- The sales rep should schedule an appointment with the right person. They must also understand why the appointment has been scheduled.
Personalization. It’s important to show to a lead that we know why we reach out to them and what the outcomes of our cooperation are.
Olesia Maksymenko, Head of Sales Development Department
- Ask questions to see if they care about your brand. They must be able to reach your target audience with effective brand messaging.
- Establish if they understand your value position on the market.
- Find out if they use multichannel outreach. This includes emails, calls, chats, LinkedIn, and other social media channels.
- Determine if they are buyer-centric. This means that the buyer comes first.
You show that you’re interested in the prospects, their problems and try to provide some solutions.
Michael Maynes, CIENCE VP Sales
- You'll need to know open, conversion rates, and other metrics. If you make an investment, you have to be able to understand analytics apart from the methodology of getting appointments.
I can get 20 meetings. It’s great. But why did I get them? Why didn’t I get 50 instead? Was it a language use that attracted or scared away people? Regardless of the number of appointments you get, you need a lot of transparency on what’s being executed and what’s not.
Michael Maynes, CIENCE VP Sales
- Check examples of the content they create. Review their email templates, phone calls, blog posts, and social media.
- Ascertain if they offer research services to create lead lists. This ensures that instead of a ready-made list, you will get the most up-to-date information about potential prospects.
- Check whether they’re up-to-date. For example, recently Facebook updated its rules. Those companies that managed to adapt to them are winners.
- Agencies should have expertise in both lead generation and appointment setting. This ensures your orchestrated outreach works successfully.
- Sales cadences should involve at least eight touches. For example, touches may include two emails, five calls, and three messages on LinkedIn.
- The email messages of emails should be human and catchy. They should have a personalized feeling rather than standard marketing text. In this example, if you want to sell offline maps for travel agencies that provide tours to exotic locations, a good email would be:
Here's an example from the previous item—offline maps. If Guillette replied she had never had problems with her tourists, reply handling almost always wins: This style is pretty nonstandard, but such letters attract attention. Prospects get interested in a continuing conversation. Obviously, these examples are somewhat simplified, but they help explain how SDRs start and maintain a conversation with a prospect.
- SDRs should have the ability to answer any prospect questions. This includes overcoming any objections.
- Responsiveness by the SDR is imperative. It's the key to increasing engagement.
I would also estimate the work of their inbound team. How fast do they answer my questions? Do they provide comprehensive answers?
Rade Kemalova, CIENCE Internal Team Manager
On a separate note, it would be helpful to have a call with an SDR who’s currently working at this lead generation company to learn his/her background, evaluate the level of communication skills etc. Obviously, it doesn’t mean that this person will work on your account. However, you’ll be able to align your requirements with current employees and decide whether you want to proceed or not.
Anna Svetlichnaya, Head of Sales Operations Specialists Department
- They must have outreach that stands out. For example, images, GIFs, or tools that enable inserting customized video in an email makes prospecting more effective.
- Flexibility is essential. This demonstrates a client-oriented, problem-solving approach. In this case, a company adjusts its offer to the needs of the business rather than a fixed set of services.
- Listen to their vocabulary. “We just give you good leads” language is not enough.
- Look for the “too good to be true” signs. Low or set pricing may be an indicator that methods are based on a bad list.
- Be wary of a lead gen company that gives pricing right away. This shows that they are not taking the time to understand your needs or who you are.
- Stay away from companies relying only on lists and databases. These are likely to be very outdated and inaccurate (pre-purchased, pre-scraped, etc.).
Ask if they do research upon request or they have a ready-made contact list. If they have a list, they’re most likely resellers who purchase list from platform providers. In this case, you’ll pay more due to inaccuracy levels. Scraping – a robot that searches for data on the Internet instead of people. First, it’s illegal, because many state registries forbid this practice. Second, data quality is low (you will receive less than 25% of accurate leads), because most actual data is contained on social networking websites that can’t be scraped.
Taras Ilnytsky, Head of Data Enrichment Department
- Steer clear of mono-channel sales development campaigns. This means that outreach is only through one channel, like either email or phone calling.
- Avoid self-centric campaigns. This is when the main emphasis is on the seller, not the buyer.
- Don't use companies that offer a non-data-driven approach. Their lead generation models should involve AI and analytics, along with a human-driven approach.
- Note if they have inaccurate leads (no comments). An incorrect sales database could negatively affect business relationships and weaken marketing efforts.
- Don't go with a lead generation company that doesn't use software for outreach. This includes using an outdated program that has a limited number of functions or is difficult to use, especially when it comes to reporting.
- Don't be fooled with lead gen companies who offer “guaranteed” results. We also estimate any promises of lead generation companies. Beware of the company that guarantees results, as your mileage will always vary. For example, the abundance of conferences and receptivity in biotech makes it easy to set up to twenty appointments in a week. However, if you target law firms, getting two appointments in the same time period will be a struggle. In this case, you need to rely on your own sales prospecting industry experiences and industry statistics (averages).
Lead Generation Companies Analysis (Based on Clutch)
You won’t find one single, definitive, credible market research report of the lead generation market on the web because there isn’t one.
Our CIENCE team came to the conclusion that the market is pretty broad, with no completely dominant vendor (800 lb. gorilla). Few third parties, let alone analyst firms, have attempted to study or estimate market sizing, although lead generation companies like CIENCE do this research for ourselves—which we’d like to share with you.
We can’t expect our competitors to share any data with us, so we decided to study the public information they provide. We picked Clutch as our main source for information.
Clutch is a platform that lists businesses along with the reviews from their clients. It also has the ranking and provides insight into 15 Market Leaders and 10 contenders. Their goal is to help buyers make the best purchasing decisions. At the time of the research, there were 201 lead generation companies registered on Clutch.
Foundation years for lead generation companies
What we couldn’t track was the number of organizations closed during this period. Nevertheless, we see that the number of lead generation companies is steadily increasing. The fact that it has tripled over the past eighteen years proves that there’s a constant demand for outsourced lead generation services.
Facts found by Clutch about lead generation companies
The methods of B2B lead generation dramatically changed with the massive “webization” of business that took place back in the 2000s. Most companies began using emails and created websites and official pages on social media as their virtual representative offices.
These events changed the way lead generation works, for both data enrichment and sales development outreach. Web presence made information about companies and employees more available. On the other side, it also made buyers more independent and demanding. In the end, it all falls to the execution of each company—whether to be stopped by obstacles or leverage new opportunities.
And taking into account the number of lead generation providers, market entry opportunities are abundant. One more interesting figure we obtained from Clutch was the average number of employees. We found that 73% of lead generation companies have fewer than 249 employees.
Number of employees
The percentage is quite different for Clutch’s market leaders: 53% of the top fifteen lead gen providers have 250+ employees. And for the top sixteen to twenty-five, the percentage drops to 30%. Having a big number of employees isn’t surprising. Lead generation companies employ people-as-a-service (PaaS) model.
Beware of small firms here. You need humans to do data enrichment and sales development work. The best lead generation companies hire and train researchers and SDRs. Now, let’s take a look at what a buyer can expect from organizations registered here.
Top lead generation industries
The top six industries for lead generation companies include:
- Business services (87)
- Financial services (77)
- Retail (56)
- Healthcare and life sciences (53)
- Telecommunications (50)
- Manufacturing (42)
Types of lead generation services
We studied the service focus of lead generation companies registered on Clutch. As we mentioned above, there are 255 unique entries. To tackle this chaos, Clutch introduced a service focus that enables potential clients to see what a particular organization does.
When it comes to lead generation companies, Clutch provides two main service focuses: voice/call center and B2B lead generation.
Apart from them, these organizations provide other types of services:
The most popular are voice call center, and B2B lead generation and qualification.
As you can see from the chart below, most organizations have a small focus on B2B lead generation:
Of 201 lead generation companies registered on Clutch, only 31 (15%) had a focus that equals or exceeds 50%. The percentage is almost the same for the top 15 leaders at 20%.
Apart from lead generation, these companies also provide voice/call center services. Most companies (~72%) have a strong focus on this type of service (50% and more).
71% of companies provide non-voice BPO and back office services. However, 66% of lead generation companies have a weak focus that is lower than or equal to 45%.
Average hourly rate
- 68% of lead generation companies work at less than $25 per hour.
- 22% have $25–$49.
This pricing implication is particularly important juxtaposed against in-house costs:
- For the top 15, the breakdown is 77% vs. 6%.
- For the contender, it’s 70% vs. 10%.
It’s notable that most companies that hit the top 25 lead generation services have the lowest hourly rate.
Minimal project size
- 87% of companies have $1,000 as a minimal project size.
- The percentage of companies ready to take a $1,000 project is lower for the top 15.
- For contenders, 87% of companies have $1,000 as a minimal project size.
You can easily outsource lead generation at $25 per hour and get a $1,000 minimal project. If you work in business services, manufacturing, financial sector, retail, telecommunications, or healthcare, you are more likely to find a provider that fits you perfectly.
Lead Generation Trends 2021
We've pinpointed the main lead generation trends and challenges in 2021, brought on by the impact COVID-19, increasing buyer awareness, new tech developments, and the ever-changing landscape of the B2B industry. Here's what we found:
1. Challenging sales environment
We’ve already said that lead generation has changed significantly in the past decades. And the reason for that is the new sales environment. The Internet has increased buyer awareness and enabled people to search for solutions independent of vendor information or input. Additionally, the pace of tech development has made effectiveness a business deity. There’s no more buying just to get rid of a pushy seller. It’s all about the value of the product or service on the company. In addition to that, buyers have a strong concern about the influence of their purchases on their reputation.
Also, we cannot disregard the impact that the COVID-19 pandemic had on the global sales environment—and new distinctive features of modern vendors:
- They’re stressed with the buying process. Organizations need help more than ever driving sales and increasing their pipeline.
- They seek to be more independent. In other words, buyers don’t want to buy what they don’t want, don’t need, and can’t leverage. They hate sellers who push purchases down their throats. However, the nature of B2B products and services makes it really hard to analyze them and make a good purchase decision. These contradicting powers create a huge internal conflict, which can lead to inaction. People involved in lead generation could either suffer or leverage it.
- The number of decision-makers for a single purchase in B2B has increased six times as much. And each evaluates your product and service from a unique perspective, having their own internal conflict. Selling is as difficult as ever.
- New channels of communication were introduced. However, it became much harder to get through to a decision-maker. This seems to be a global trend: we became as close as ever before, but it also made us appreciate our time more than ever. We won’t spend it on invaluable things.
- The sales process became longer. Because of more decision-makers and increased pressure on them, while the possibility to start a conversation with them became smaller.
The new sales environment added to the complexity of the sales process with the ever-increasing need for:
- Sales specialization
- Software augmentation
- Value-driven, buyer-centered communication
2. Sales specialization
According to our CMO, Eric Quanstrom, the sales specialization trend will continue at a blistering pace for all types of B2B in 2021.
As the sales process became longer, one seller could no longer do all tasks alone. This complexity required trained specialists. That’s why we’ve seen several new roles introduced in lead generation: researcher, copywriter, and sales development representative. LinkedIn’s 2020 Emerging Jobs Report identifies SDRs as one of the ten fastest-growing roles, and we predict hundreds of thousands of SDRs hired in 2021.
A larger number of people forced businesses to spend more money and increased the cost of one prospect. Meanwhile, on-target earnings (OTEs) decreased—and so did the tenure, as people didn’t want to stay in a low-paid stressful job and required promotion.
According to Hubspot, outsourcing lead generation can be an efficient solution if you don’t have the resources to devote to staffing a full internal department. It enables companies to decrease the cost of a lead while entrusting the job to the experienced professionals who have been working in it for years.
4. Targeting and personalization
Outbound resurgence continues. Targeting is what enables your company to find and reach out to the buyers who potentially have a strong need in your product. On the other hand, through personalization, you can demonstrate an in-depth understanding of your prospect’s pain points and explain how your company can make a change for them. Personalization in outbound is the true differentiator.
According to Hubspot, more than 59% of marketers say email is their biggest source of ROI. The year 2021 will raise the demand once more, indicating we have to try even harder.
5. Automation and cadences
Another popular trend is automation and cadences. The longer sales process requires more effort from everyone involved in lead generation. Software augmentation enables you to:
- Check data
- Assign some routine processes to the computer
- Spend more time on personalization
- Reach out to more leads
- Customize this process
- Keep track and report
6. Interactive content
In a competitive online environment, your email outreach needs to catch attention. Experts predict that video content will account for 82% of total internet traffic by 2022. Therefore, to not get lost in this variety of information, you have to come up with your type of interactive content. Interactive videos, quizzes, surveys, infographics, and calculators will keep your prospects or leads engaged with your emails.
7. Multichannel outreach
Multichannel becomes even more important in 2021. More web presence means more channels to get through to your prospects. Lead generation is all about starting a business conversation with the right person. You’ll be more efficient if you try reaching out via email, phone, and social networking websites.
Lead Generation Companies. Are They Worth It?
Definitely. Outsourcing lead generation is a smart move; it is at least 43% more effective than in-house lead generation. The right lead gen company will do its best to become a part of your sales efforts and land you the best deals possible, even in the tough sales environment we live in.
The number of lead generation companies and services might seem overwhelming for a buyer to process. However, we hope that our article, expert tips, breakdowns, and tools help you achieve a better understanding of this topic.
For further questions about lead generation services from knowledgeable sources, especially how they can facilitate the growth of your sales and new revenues, contact us using the form below. We’ll get right back to you.