How Much Does Lead Generation Cost, And Is It Worth It?


lead generation cost

Why Care About Lead Generation Cost?

Lead generation is like a shoe where one size or style does not fit all. What might work for one industry may not work for the other. It includes different strategies, which we have discussed thoroughly in our previous article. And each strategy costs differently depending on various factors. Therefore stating how much lead generation costs exactly can be tough to answer.

A Demand Generation Benchmark report suggested an average lead cost of $198 in 2017.

It can cost you anywhere between $5 per click or $2000 up to $20000 per month, depending on what strategies you apply, what companies you have hired, and what outcome you expect.

But before we try to understand the lead generation cost, it is crucial to learn what a Lead is.

What is a Lead?

There are 3 types of leads. Each lead is derived differently and will give you different results. When buying leads, it is necessary to determine which lead you are willing to pay for.

  • Cold Leads, also simply called Leads:

A Cold Lead is any contact in your list that may or may not be interested in your business. These leads are usually cheaper. You can purchase them through social media, on a pay-per-click basis or by purchasing a list through private databases.

  • Warm Leads aka Marketing Qualified Leads – MQL:

MQL or warm leads show interest in your business but have failed the readiness test. They also are a perfect match for your target audience. These leads cost more and are channelized through a proper strategy by a lead-generating company or in-house marketing team.

  • Qualified Leads, also known as Sales Qualified Leads – SQL:

SQL are leads that match your targeted profile; they have shown interest in doing business with you by engaging and are now ready to move towards the next step, bringing them closer to conversion. These leads cost the most as they are driven through a thorough channel and will most likely turn into clients.

lead generation cost image
lead generation cost depends on many variables

Average cost per lead, surveyed using 350 companies, by Hubspot:

Here is some data-driven from HubSpot, where they surveyed over 350 companies. The survey found the average cost per link in 3 categories – Industry, number of employees, and revenue generated per year.

The results were not astonishing but have since become a quick guide for businesses to check for average costs they need to be spending on generating leads.

Average Lead Generation Cost as per Industry:

  • IT & Services: $369.88
  • Healthcare & Medical: $285.82;
  • Financial Services: $271.54;
  • Industrial & Manufacturing: $235.09;
  • Media & Publishing: $191.07;
  • Consumer Products: $182.37;
  • Marketing Agencies: $172.72;
  • Education: $65.69;
  • Nonprofit: $43.36.

See also: How To Generate B2B Leads

Average Lead Generation Cost as per Revenue generated annually:

  • $500+ million: $429.01;
  • $10-500 million: $179.48;
  • $1-10 million: $184.64; and
  • <$1 million: $166.01.

Average Lead Generation Cost as per Number of Employees:

  • 1,001+ employees: $348.93;
  • 201-1000 employees: $212.12;
  • 51-200 employees: $180.47;
  • 2-50 employees: $146.94.

Different Lead Generation Services and their cost:

There are different service models in Lead generation available in the digital market, each with its own set of pricing. Some charge per lead, while some charge a fee per month or per appointment.

Let’s look at some of the models and their pricing range.

–      Appointment-based Leads:

These leads come from lead-generating agencies, who sort through your database, collect relevant information about your target audience, and connect them to you personally. This is the most cost-effective way of finding a lead. However, it can be quite costly as it lies on the higher end of the budget spectrum.

Appointment-based lead generation can cost you between $2000 to $20,000 per month with an additional charge of $20 to $50 per appointment booked.

–      Cold contacting leads

Cold contacting leads or outbound sales are made via teams that are given your prospect profile. They conduct their own research to find relevant clients that match your prospect profile and reach out to them via cold calls, emails, and messaging. Although effective, this is one of the nominally costing strategies; however, whether outsourcing this task is worth it or you should set up your own in-house marketing team is still a topic of huge debate.

Cold contacting leads via an agency can cost you between $25 to $50 per hour. The rates can go high or low, depending on how much time you put into this type of lead generation.

–      SEO services

In SEO services, the content that you generate for your target audience is filled with relevant keywords that make it easier for search engines like Google to pick them up and rank higher when a prospect searches for them.

This kind of lead generation can cost you minimal to slightly high-end, depending on who you hire and the outcome you expect from them.

You could either hire an agency to do this all for you or higher freelance content writers that are proficient in doing so. Which of the two is better is a topic for some other day.

But SEO by an agency or individual can cost you $50 up to $150 per hour.


–      Social Media

With more than 4.48 billion social media users from across the globe, social media lead generation has seen a drastic increase. So marking your presence on social media platforms is key.

You can either hire a social media agency or social media manager to build your presence using organic and engaging content. Or you could tap into paid social media ads that work on a cost-per-click basis.

While the former charges heavily, the latter is nominally priced. But both have a vast difference in lead generation because paid social media ads bring you clicks that may or may not turn into leads. On the other hand, agencies or managers naturally work towards the goal of bringing you leads.

Social media lead generation via agency or manager can cost you between $15 to 50 per hour.

Social media lead generation via ads can cost you $0.50 to $5 per click.

–      Lead Generation tools

Lead generation software or tools gather data and analyze them. Some analyze them for patterns and characteristics that are useful for generating leads.

While some use lead scoring to analyze how well the lead is doing and how fruitful it may be in the future. As of now, this software or tools only make the task of finding a lead easier and less complicated.

However, with rapid advancements in Artificial Intelligence, we can only wait to be amazed by the software and automation technologies that are yet to come.

As of now, Lead generation tools and software cost you $50 per month or more, depending on how much you rely on them.

 Cost Per Lead (CPL) Calculation:


Now that we have covered most of the lead-generating costs, here’s how to calculate the cost per lead, also known as CPL. This comes in handy when you are allocating a budget and analyzing revenue for your leads.

It’s a simple calculation. Take your total amount spent on leads and divide it by the number of new leads generated. This will give you the cost you had to pay for each lead.

Conclusion – Is it worth investing in generating Leads?

Simply put, yes. As long as the leads are converting into business, the investment is worth it. However, we do not recommend you waste your money on investing in cold leads.

How much money lead generating cost you is for you to decide, but investing your money cleverly is how we help you make a difference.

You may also like: How To Start Affiliate Marketing Successfully 

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