Why Online Lead Generation Companies Won’t Take Payoff on Backend
Ok, this is a fairly short post..
For sales organization, lead generation partnership just plain works.
When people ask me about lead generation, I get asked this a lot
Why won’t online lead generation take payoff when I get paid?
1) Online lead generation companies can’t track conversions OFFLINE or the dollar amount
If your selling your product or service offline, there is no “conversion pixel” that’ll fire on your customer’s browser.
There is no digital communication method other than you telling them if the sale occurred.
But what financial motivation does the salesman or the company (that the salesman works for) for reporting this?
Of course, if the world is full of great honest people, then obviously lead generation companies WILL take a percentage of the sale instead.. but alas, we live in a world where 1% of the harvest that’s gone bad is ruining it for the 99% of the people that are good, honest, and ethical.
Even if the sales occurred, what was the dollar amount?
If you get a lead generation company to agree to getting paid on the backend AND you are willing to report conversions, one can easily fudge the numbers to their financial advantage.
What was the dollar amount of the sale?
$10k? $20k? $2 million?
A wise man once said
Greedy finger on calculator breaks happy business marriage
Ok, i made that up.
But you get my point.
2) Online lead generation companies ROI depends on your sales people’s ability to close
If you have a shitty salesman, no amount of good leads are going to close.
In another words, if you’re asking the lead generation company to get a payoff in the end, you’re asking them to pray and hope that you’ll make money so that they make money.
I’m no Warren Buffett but that sounds like a really bad financial strategy.
3) Online lead generation companies live and die on math (financial math)
Here’s last but probably the BEST reason why lead generation companies cannot take a percentage based payout on the backend.
Whether or not you end up with a sale, there is the issue of
– FIXED hard cost of advertising (i.e. cost per lead)
– payment FIRST going to the ad networks
– delay of getting payment LATER
If the payment doesn’t come from the lead buyer, the lead generation company is left with the bill.
In another words, the lead generation company bares ALL the risk.
Now you know.