Choosing a telemarketing partner often comes down to a choice between these two pricing models – cost per lead and day rate (sometimes also known as campaign fee). First, some definitions. With a cost per lead telemarketing campaign, your business only pays for the leads it receives. Meanwhile, a day rate or campaign fee set up is built on a pre-agreed rate per day of the campaign – you won’t pay any more or any less depending on how many leads the campaign generates. There are pros and cons to working with both kinds of telemarketing supplier so, to help you determine which would work best for you and your telemarketing campaign, here’s what you need to know about cost per lead vs day rate telemarketing.
Cost per lead Telemarketing
Let’s start with cost per lead. These kind of telemarketing campaigns tend to garner rapid results and, most importantly, they’re risk-free, right? Surely there’s no need to pay a telemarketing company for their time when you might not get the leads you need. Yet, this is only half the story. While cost per lead telemarketing can seem like an obvious choice, there are other key aspects to keep in mind:
Cost per lead Telemarketing can dent your reputation
While your business only pays for the leads your telemarketing supplier generates, this pricing model can often encourage pushy, salesy – possibly even aggressive – sales tactics on your behalf. Cost per lead telemarketing suppliers are highly motivated to bring you leads, but getting them can often come at the detriment of your company’s brand and reputation.
Cost per lead Telemarketing can result in lower quality leads
If your business is going to pay a telemarketing supplier per lead, it’s vital to pre-agree what qualifies. Cost per lead companies can often push the boundaries when it comes to qualifying leads, because they would rather charge you for a “shaky” lead than see the opportunity go to waste. The occasional uncertain lead might be expected in any campaign, but when they outweigh the strong leads, your telemarketing ROI can really suffer.
Cost per lead Telemarketing can be overly dependent on lead quantity
Too few… If a telemarketing supplier doesn’t see good lead results for your business pretty sharpish, they may be tempted to turn their attention to a client whose campaigns are more lucrative. Too many… On the flipside, if your telemarketing campaign performs well and generates a number of leads, your supplier may start to see your business as a bit of a money-spinner. There can be a tendency for cost per lead companies to neglect to deliver the right number of leads for you and your salespeople, in favour of maximising what’s billable.
Cost per lead Telemarketing can cost over the odds
Finally, cost per lead telemarketing is only as good as a lead’s value for money. For example, a telemarketing supplier that charges £200 per lead and generates three leads a day would cost your business £600 per day (equivalent to around £140k salary for a telemarketer). That’s pretty expensive.
Day rate Telemarketing
Now, let’s move on to day rate telemarketing. At first glance, it may seem that this pricing model offers less potential return for your investment. While day rate telemarketing comes with more of an initial outlay than cost per lead and can take longer to generate results, it also tends to be more likely to get your business the high quality, carefully nurtured, qualified leads your business requires. To keep things simple, we’ll look at day rate telemarketing from the same perspectives as mentioned in the cost per lead analysis above.
Day rate Telemarketing is designed to uphold your reputation
Assuming you’ve gone through a reasonable selection process, your day rate telemarketing partner should be equally concerned about your short term results and your long term reputation. They will want to work with you for months and years to come, and a big part of that requires building a pipeline of opportunities. Some leads may be generated on the very first call, others take weeks, months or even years to nurture – a day rate telemarketing partner should recognise this and build you a strong prospect list for the future.
Day rate Telemarketing is all about quality leads
A telemarketing supplier who charges for their time wants you to get a good return on your investment; in other words, they’ll prioritise giving you three strong leads over 10 weak ones. What’s more, if your receive leads that aren’t as strong as you would like, you’ll be able to let your day rate telemarketing partner know. They should then tweak their approach to make sure all future leads are on the money.
Day rate Telemarketing gives you control over lead quantity
Not receiving enough leads from your supplier? As day rate telemarketing is based on long-term relationships, your partner should react to this and offer solutions. This could involve changes to the pitch, changes to the database, or changes to the calling schedule, for example. If you’re getting too many leads, there are a number of ways to handle this. You can ask your telemarketing partner to ramp down the activity each day or week. You could agree to target higher value prospects, which are usually harder to come by (but always worth the effort). Alternatively, you could ask them to increase the qualification criteria. Whatever the solution, your telemarketing partner should work with you to find a solution that works.
Day rate Telemarketing offers cost transparency
With a pre-agreed day rate in place, you won’t have any nasty surprises when it comes to paying for your day rate telemarketing campaign. If the campaign has gone well, you’ll likely be more than happy with your ROI, but what if you don’t receive as many leads as you were hoping for? As with any marketing campaign, there’s an element of risk and there can be times when day rate telemarketing isn’t as fruitful as planned. Yet, most importantly, a day rate telemarketing partner will work with you to explore ways to improve future results, refining campaigns and ensuring professional, high quality work that aligns with your company values and brand identity.
Cost per lead or day rate Telemarketing?
To summarise, cost per lead telemarketing might seem attractive at first glance but as we’ve covered, there are many potential pitfalls of which to be aware. Conversely, day rate telemarketing may appear more expensive or higher risk, but with the right telemarketing partner, this approach is the way to achieve strong, qualified leads obtained with skill, care and transparency, as well as a telemarketing partnership you can trust long-term. Finally, as you may have guessed, we only offer day rate telemarketing. We have stuck by this choice from day one and our Google & Bark Reviews tell us this was the right choice, the same can’t be said of all agencies… choose wisely.