Still Buying Leads in 2023? It’s Time to Stop
Buying leads is common practice in the B2B world in 2023. But despite its widespread use as a method for boosting pipeline activity, it rarely pays off in the way companies expect. In fact, buying leads can be a sure way to waste more time and money, and potentially even damage your business’s reputation.
If you’re buying leads, the time to stop is now. Trust us: there are better ways to build your pipeline and convert leads—ways that won’t have you relying on repeat list purchases that leave you spinning on the sales equivalent of a hamster wheel.
In this guide, we’ll tell you why the motivations for buying lead lists are misguided, undeniable reasons why you need to stop doing it, and why data-driven prospecting is a better alternative to drive pipeline growth.
- Buying leads often has the opposite effect from what businesses expect: It leads to more wasted time and money, and less pipeline conversions.
- When companies buy leads, they set up an unintentional cycle of needing to buy additional lists in order to reach targets.
- Buying lead lists inhibits a critical part of the early-stage sales process: building relationships.
- Data-driven sales prospecting and lead generation is a better alternative to buying lists.
Why Do Businesses Buy Leads Anyway?
Before we really dive into the reasons why you shouldn’t be buying leads to grow your business, let’s talk about why companies choose to buy them in the first place. Buying leads can seem like an easy “quick fix” for companies that really need a pipeline boost—for example, a startup trying to showcase its growth potential or a large enterprise falling short of its sales targets.
But buying leads in these and similar situations is nothing but a band aid solution that fails to figure out why a pipeline is struggling in the first place. It’s an approach built on several misconceptions about how it can help a business get back on track, including:
Sales Success Has Shortcuts
In today’s hypercompetitive B2B landscape, sales teams are under tremendous pressure to meet quotas and sales targets. Buying leads can seem like an expedited route to achieving these goals. It’s tempting to assume that a ready-made list of leads will automatically translate into more conversions and sales.
But skipping straight to filling your pipeline without laying a foundation of effective targeting and a strong brand presence will only position you to be playing constant catch-up. Many of the leads you buy won’t be the right fit for your solutions, and before you know it you’ll be buying more leads to replace the ones that didn’t convert from your first list.
Not all leads are created equal. Marketing and sales teams must do the work to set up a lead-gen engine that attracts not just a high-volume of leads, but ones that align with your ideal customer profile and are likely to convert. This is the recipe for long-term pipeline growth.
Buying Leads Can Save Time
It’s no secret that sales reps feel chronically short on time. Buying leads can seem like a sensible way to help remedy this problem. If you can skip over much of the work related to sales prospecting, your reps can spend more time on engaging leads and closing deals—right?
Perhaps technically. But the flaw with this line of thinking is that engaging leads can still be a waste of time when the leads are unlikely to convert. In fact, chasing bad leads is one of the biggest time wasters sales reps encounter in their jobs. Even just a few minutes spent chasing each poor lead can add up to hours of wasted time every month.
For example: If you have two salespeople on your team chasing 200 bad leads each month, and they spend 10 minutes reaching out to each one, each rep will end up wasting 16 hours/month. This is wasted time that could have been avoided.
The more time-effective approach is to invest in boosting lead quality with strategies like automated lead scoring and qualification prior to setting sales appointments.
Buying Leads Can Fill In-House Gaps
Not all businesses boast a robust and specialized marketing department. For those without the in-house expertise or resources to develop and execute effective lead-gen, buying leads can seem like a pragmatic alternative choice.
While these motivations are understandable, the truth is that there are smarter ways to outsource when you need to fill gaps in expertise. Rather than buying leads to mask a poor lead generation strategy, it’s a better option to hire an agency with a real team of experts who can help you get on track.
Doing so might require a larger up-front investment, but the ROI will pay off in the long run as you begin to more authentically generate high-fit leads to your pipeline.
5 Reasons to Stop Buying Leads
Now that we know why the motivations for buying leads are often misguided, let’s talk about some of the concrete reasons why the time is now to stop doing it (seriously!).
- Quality over Quantity
Lead quality matters. Without a real process in place to ensure the leads that enter your pipeline are high quality and high fit for your solutions, your sales reps are on a wild goose chase to find needles in a haystack in order to make conversions.
Don’t leave your ability to convert leads and sales up to chance. Instead of buying lists with low-fit leads, or even inaccurate and outdated information, invest your time and money into building a targeted and organic lead-gen engine.
- Legal and Ethical Concerns
Buying leads raises significant legal and ethical concerns about data privacy and security. The contact information on purchased lead lists has often been passed between multiple parties before it ends up with businesses who buy the lists. This makes it difficult to track the origin of lead data and be sure it was handled in compliance with relevant data privacy regulations.
Even if you believe you are compliant and have the best intentions, purchased leads often lack the necessary consent for communication. Building your lead database with compliant opt-in methods not only mitigates legal risks but also ensures that your leads are genuinely interested in your offerings.
- Low Conversion Rates
We know by now that leads acquired through buying lists exhibit lower conversion rates. They often lack the foundation of genuine engagement and nurturing, and may not have any real interest or intent to purchase your solutions. Consequently, your sales team faces an uphill battle in nurturing and converting these leads into paying customers.
The effort required to convert purchased leads almost always outweighs the benefits, making it a less effective and cost-efficient strategy.
- Ineffective Relationship Building
Successful sales often hinge on building strong relationships and trust with potential clients. In fact, 81% of B2B buyers say they must trust a brand in order to purchase from it.
Purchased leads rarely provide opportunities for meaningful interactions. These leads are typically cold and unresponsive, making it challenging to establish rapport in a consultative sales process. By contrast, leads generated through organic methods are more likely to engage with your team and be receptive to their outreach.
- Cost Inefficiency
While buying leads may seem cost-effective initially, it proves costly in the long run. The continual need to replenish your lead pool by purchasing new lists can accumulate significant costs over time. On the other hand, investing in building your in-house lead-gen capabilities requires more upfront effort but will become a more cost-efficient, sustainable strategy for the long-term.
What You Should Be Doing Instead
In this article we’ve talked a lot about how authentic lead-gen and prospect engagement is the better alternative to buying lead lists. But what does that actually mean? How do you get your lead-gen engine up and running so you’re not even tempted to buy leads?
It all starts with targeted and effective prospecting—finding the leads that are best-fit for your business, reaching out to them in intentional and engaging ways, and nurturing leads in your pipeline until they’re ready for true sales engagement.
At RevBoss, this is exactly the kind of process we help our clients implement at scale. Here’s how:
- Get the Right Prospect Data: We integrate with leading prospect data sources — including our home-grown engine — to provide our clients precise, accurate B2B contact data.
- Find Your Sales Flow: Our team builds a sales flow that drives prospect engagement with personalized sales touches. We route active prospects to your sales team.
- Learn, Rinse, Repeat: You work the prospect convos that we turn up and coordinate with our team to measure and optimize. We grow your pipeline and you win more clients.
Ready to learn more about how we can help you grow? Schedule a call with us today.