Buying Leads for Your Funnel: Exploring Pros and Cons

By Dmytro Spilka

Oct 3, 2024

Guest post by Ioana Wilkinson

Your sales funnel is your business’ growth engine.

A funnel of qualified leads gives you more conversion opportunities and the ability to scale. On the flip side, a funnel struggling to pull in leads can drain your company’s time and money.

That’s why some businesses consider buying leads.

If you’re curious to learn if purchasing leads may be the answer to keeping your pipeline full, keep reading.

In this article, we’re covering why brands buy leads and the pros and cons of doing so.

Why brands buy leads for their funnels

Brands buy leads to quickly fill their sales funnels with potential customers.

You can jumpstart the digital customer journey by purchasing leads and moving prospects from awareness to consideration faster than waiting for organic traffic.

Buying leads can also help you target specific audiences. With targeted leads, you can focus your marketing efforts on people who are more likely to be interested in your product or service. This also helps you deliver tailored messages that resonate better with potential customers.

But you need to make sure the leads you buy are high-quality.

Leaders genuinely interested in what you offer will move quickly from awareness to advocacy. Low-quality leads can waste your time and hurt your brand’s reputation. Careful follow-up is essential to turning these leads into loyal customers.

Pros of buying leads for your funnel

Here are some pros to consider if you’re interested in buying leads for your funnel:

1. Quick start

Buying leads gives you immediate access to potential customers — there’s no need to wait for organic traffic to build.

This is especially helpful if you’re entering a new market or if you’re a new business owner.

For instance, if you’re an aspiring or new entrepreneur, you could jumpstart your online presence by using a website builder like One.com and purchasing leads from a data provider like Data Axle Genie.

This gives you a quick hub for directing and converting leads — and a head start on finding customers. As a new business that needs to make a profit as soon as possible, this is gold.

2. Targeted audience

One of the main reasons to buy leads is to target a specific audience.

Recent sales trends show that at least 52% of companies buy opt-in leads to boost their sales funnel.

Opt-in leads

(Image Source: DemandScience)

This is because, when purchasing leads, you can specify the target customer you’re interested in based on their demographics, interests, and behaviours.

With a more targeted approach to prospecting, you can reach potential customers who are more likely to show interest in your offerings.

This gives you a better chance of converting prospects into customers.

However, for this funnel strategy to be effective, you must define your ideal customer profile (ICP) and create buyer personas that reflect your target audience.

Otherwise, the potential leads you buy won’t align with your products and services.

Take Band of Brother tours, for example. If this niche tour company buys generic leads, it might miss out on its target audience — travellers interested in WWII history.

This wastes time and money. These unqualified leads can lead to poor conversion rates, reducing profits. Instead, creating your own leads through targeted content and engaging campaigns ensures the audience is genuinely interested.

3. Scalability

As your business grows, purchasing leads can help you quickly scale your lead acquisition efforts without needing many sales reps to prospect.

Prospecting can be a time-consuming job that requires an entire workforce, especially when you need to qualify each lead individually.

Buying leads means sales reps can focus on converting leads rather than finding them.

With fewer hours spent on sourcing leads and more on converting, you can scale conversions without hiring more sales reps.

4. Saves time

Consider that 37% of sales reps spend more than half of their time prospecting.

Dooly

(Image Source: Dooly)

Instead of hours of extensive lead generation, businesses can buy leads so their marketing and sales teams can focus on more crucial aspects of brand awareness and lead nurturing.

When sales reps spend fewer hours prospecting, they have more time to concentrate on closing deals.

This leads to higher conversion rates and faster sales cycles.

5. Predictable flow

Buying leads gives you a steady stream of prospective clients.

This is crucial for planning and forecasting sales as you have a predictable flow of funnel leads.

With better consistency around lead generation, sales teams can make more informed decisions about their sales strategies.

Plus, you can allocate resources better as you know how many leads need nurturing.

6. Competitive edge

Purchasing leads offers access to a large pool of prospects, giving your business the edge over competitors relying solely on organic lead generation.

Not only can you target specific groups.

You also have access to a broader audience you may not have found.

This helps you expand your customer base more rapidly than your competition.

Cons of buying leads for your funnel

Buying leads can feel like a quick funnel lead generation strategy that fills your pipeline. But there are some significant drawbacks to consider:

1. Quality issues

One of the major issues with buying leads is quality.

While you may have chosen a specific target audience, you’re not qualifying the leads yourself. In this respect, you don’t always know how well-qualified these potential clients are.

They might fit your lead criteria in some ways but have no genuine interest in your products.

This may result in lots of nurturing with no actual results.

Quality issues

(Image Source: DemandScience)

In fact, 65% of sales reps say that high-quality lead generation is their biggest challenge. That’s why more than a third of marketers are shifting away from generating large lead volumes in favour of improving the quality of leads.

This trend focuses on real qualifications rather than simply boosting your funnel with endless leads.

2. Spam risk

Not everyone takes kindly to companies they don’t know contacting them.

When you buy a lead, this prospective customer hasn’t explicitly opted in to receive communication from you.

This can result in customers marking your marketing efforts as spam.

Imagine buying a whole list of leads, only for your email marketing campaign to flop because your email list moved you to spam.

3. Cost

Buying leads isn’t cheap.

In fact, the average cost per lead from pay-per-click (PPC) advertising is around £138 for B2B buyers.

Cost of leads

(Image Source: Sopro)

Remember, these are just lead costs — not customer acquisition costs.

You still need to put time and effort into converting these leads.

With leads costing into the hundreds, the cost of paid-for lead generation starts to stack up quickly.

To avoid losing money, determine whether your return on investment (ROI) cancels out the cost of buying contact details.

4. Lack of relationship

Most often, purchased leads don’t have a pre-existing relationship with your brand. Building trust with new customers is more challenging when you pop up out of nowhere.

This surprising initial contact can feel like intrusive and unwanted cold calling — a real customer experience faux pas.

During the awareness stage, be smart about how you approach the leads you pay for.

Use sales and marketing strategies that warm these potential buyers up. Don’t just spam them with an aggressive sales pitch or a bunch of generic promotions.

Create a personalised experience through marketing campaigns that deliver relevant content.

5. Potential for fraud

Unfortunately, not all lead sellers are genuine.

When buying leads, you may encounter fraudulent lead providers. These con artists sell fake or recycled leads.

These types of leads can waste your resources. They provide no real value to your sales funnel as they’re either incorrect or uninterested.

Make sure you vet any lead providers before making a purchase decision.

Look for social proof, like customer testimonials, that validate the legitimacy of their leads.

6. Compliance issues

Finally, compliance is key. The last thing you want to do is run into legal issues when trying to grow your business. This snag can set you back tenfold.

Data protection regulations like GDPR or CCPA are vital when buying leads.

If you fail to adhere to these regulations, you face serious legal ramifications. This can include fines and significant damage to your company’s reputation.

Ensure you’re purchasing leads from providers whose lead-buying process complies with all protocols. Otherwise, you could face backlash from buyers who aren’t happy with you owning their contact details.

It’s also important to remember that respecting privacy doesn’t only keep you on the right side of the law — it builds trust with your potential clients. When they see that you’re committed to protecting their information, they’re more likely to view your business favourably.

Always have a clear and transparent privacy policy in place, and make sure it’s easily accessible to your leads. This policy should outline how their data will be used and stored, giving them peace of mind and further cementing their trust in your business.

To Buy or Not to Buy

A well-designed lead-generation funnel speeds up client acquisition, fostering a healthy long-term relationship with your buyers.

But while buying prospects can seem like an efficient lead-generation sales funnel strategy, you have to be careful that you’re purchasing high-quality, fully compliant leads that align with your offerings.

Creating an ideal client profile and strong buyer personas is crucial to purchasing leads that match your target audience. And before buying from any lead provider, check out their customer success stories to ensure they’re legitimate.

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