Lead generation plays a significant role in any service business. While you’ll continue to profit from your existing customers, your long-term growth and success are largely dependent on your ability to bring new leads into the fold. But if your only strategy is to pay for leads, you’re missing out on an opportunity to cost-effectively scale up over time.

Why Paid Leads Are Ineffective

As you know, you have the ability to pay for leads. You can buy a list of prospective customers and start emailing and cold calling. Unfortunately, the conversion rate on paid-for leads is incredibly low. You might reel in one or two people out of 100 leads, which is hardly worth your time and effort.  Even if you’re hitting at a better rate – say 10 percent – you’re eating away at your profits (and might even be losing money).

“You can look at the ROI of purchased leads from service directories in two ways,” marketing expert Travis Balinas says. “On the one hand, you’re paying money and in exchange, getting leads. Pretty good deal, right? But on the other hand, the leads that you’re getting are just a name and a number of someone who may or may not be in need of your services.”

In order to get any return on your paid leads, you’ll likely have to lower your price and quality of work. As such your brand image will take a hit, and you’ll end up alienating your existing customer base at the expense of prospective leads that aren’t interested or qualified. It’s a bad deal all around. 

Creating Your Own Leads

Instead of paying for leads, you’re better off using your time, energy, and financial resources to create your own organic leads that are qualified and willing to pay for your services. Here’s why:

1. Better Numbers

The Drug Rehab Agency works with addiction centers and rehab facilities to help them develop marketing strategies that generate business and maximize revenue. Many of the clients that come to them are trying to migrate away from “pay to play” schemes where they buy leads. And in almost every situation, they experience far better results when they implement the recommended SEO, content marketing, and social media practices.

One client of The Drug Rehab Agency’s used the recommended program for three months and saw a 77 percent increase in website traffic, 56 percent increase in calls per day, and 62 percent increase in conversions. Talk about a huge shift in the right direction!

2. More Sustainable

The problem with paying for leads is that you have to continue buying leads, or your business dries up. Thus, you’re only one bad month or quarter away from being unable to feed the cycle. 

With an organic lead generation strategy where you write the content, publish the content, own your own websites and landing pages, and strategically utilize social media profiles, you actually have an arsenal of content and branding elements that can be used to generate leads without spending additional money. This makes it a far more sustainable solution.

3. Greater Understanding of Your Customer

When you pay for leads, you don’t have to do any work. You just cut a check and a company provides you with a list of names and contact information. There’s zero research or effort on your part. 

When you initiate an organic lead generation strategy, you have no choice but to research your target audience, understand what makes them tick, and develop content and marketing funnels that connect their pain points with your value offerings.

The latter is obviously way more time-consuming. However, it forces you to learn about your customer and understand who they are. Over the long-term, this helps you build a customer-centric business that’s rooted in firsthand observations. 

Investing in Organic Growth

We’re not going to say there’s never a time to pay for a lead, but the situations in which it’s acceptable are few and far between. You’re almost always better off putting in the legwork and generating your own qualified leads. It’ll take more work up front, but you’ll look back in three years and be thankful you did it the right way.