First off working with a lead vendor completely removes the complexity of a media buyer or agency but introduces some cons such as:
- No brand building for you since it’s under their pages & their brand
- Sometimes lower quality leads depending on their qualification processes
Now these can both be fixed with simple process tweaks which we’ve made plenty of articles about and videos about so check those out on the channel – https://www.youtube.com/@KarelStoy
Lets get straight into how much you should pay, since it all comes down to math
What numbers you need prepared in order to make the math work
First off you need your CAC (Cost to Acquire a Customer)
Essentially, how much are you willing to pay for a project and don’t just go off of your limited knowledge, ask around, ask friends in your market what they’re paying
For example roofing, $1000 – $1500 is pretty reasonable
Then you need your Closing Rate (Blended across all reps) Not Including Referrals or Insurance Claim Work
Then you need your Set Rate (Total Leads (Not Referrals or Insurance Work) / Appointments set)
The Equation
You first start at how many appointments a rep needs in order to make a close depending on your close ratio
(E.g Your Close Rate Is 30%)
You require 3 appointments in order to make a close, simple
(E.g Your Set Rate Is 30%)
3 / 0.3 = 10 leads in order to get 3 appointments
Now you just divide how many leads you need in order to get a close by your CAC
1000 / 10 = 100 per lead
There you go, now you have your ideal cost per lead for Roofing (As the example, your number may be different but this is a industry average for roofing companies)
What to even do with this number
Now you can start an Affiliate Program for lead vendors like Stoymedia
You are reached out to by 100s of people a month, so if you allow them to hit this CPL (Cost Per Lead) then you can just infinitely scale as long as you monitor the lead quality
Or just work with one lead vendor, Stoymedia.com!
Caveat when working with vendors / affiliates
Ensure that your processes are so tight that you can’t possibly be to blame by them
The worst situations Stoymedia has been put in is when a client is getting good high quality leads who are interested in buying their service or are in the market for what they need but they fall into two traps:
(a) They either can’t set the appointments properly because they are:
- Not calling within 30 seconds
- Not following up enough
- Or have numbers showing up as spam
(b) They can’t close the appointments they do set
These are two problems we see very prevalent and causes clients to lose money fast and just blame it on the marketing agency, switch to the next one, then blame them too.
All you do in that situation is run yourself into the ground complaining why every agency doesn’t work, they do, you just haven’t found one that does or you have to be brutally honest about your situation.
Long story short, ensure if you’re working with a lead vendor that you call your leads within 30 second, following up ruthlessly, have a decent phone system, & train your salesman to be killers,
Don’t make them be pushy, but ensure they’re doing what your industry knows they should be doing
If you have any questions, book a call
Article By
Karel Stoy is the Founder & CEO at Stoymedia. Karel has over 1.5 years in the marketing agency space and learned everything he knows from running ads for clients, running a full blown marketing agency, and spending countless amounts of dollars on books & resources.
Karel Stoy is the Founder & CEO at Stoymedia. Karel has over 1.5 years in the marketing agency space and learned everything he knows from running ads for clients, running a full blown marketing agency, and spending countless amounts of dollars on books & resources.
Similar Blogs
Let’s Talk About Your Marketing.
