Exclusive vs. Shared Leads for Contractors

If you own a business with a web presence or rely on the web to drive traffic to your business, you’re probably familiar with lead generation services.

When opting into a lead generation company’s services, you have an opportunity to optimize your website at the hands of experts and significantly enhance your SEO strategy by improving your rankings for prime keywords, and, subsequently, your profit potential.

By using a well-calculated SEO strategy, you should be casting a wider net into a sea of quality, promising leads. But as we say over and over: all leads are not created equal. Knowing the difference is key to outranking your competition and acquiring a solid stream of new customers looking for the services you provide in your area.

Within the world of lead generation companies, there are multiple business models that all boil down to you paying someone to drive potential customers your way. Sometimes that involves paying for every click on one of your company’s ads. Other times it involves paying for authentic leads from 3rd parties.

In the case of the latter arrangement, there’s a distinction you should understand before pulling the trigger on purchasing leads—the difference between exclusive and shared leads. 

What is a "Shared Lead"?

Shared leads are the kinds of leads that are most commonly sold and purchased.

Most lead generation companies offer both shared and exclusive leads, although shared leads are more common. When you’re buying a shared lead, it means the lead can be sold up to 5 times ( and sometimes more) to different buyers.

Depending on your vertical or industry, these buyers are often a mix of national and local buyers. Because shared leads increase competition for buyers, with multiple buyers having the lead’s contact data, they are sold at a much lower price than exclusive leads. This enables advertisers to buy more volume.

Usually, buyers with a strong brand and optimal sales processes can make shared leads work for them, as their brand awareness is high and they are able to follow up fast—2 factors that are helpful in converting leads in a shared lead model.

The Pros:

• Shared leads are cheaper than exclusive leads.
• They have the potential for a higher lead volume.
• Shared leads create more value for consumers because they are able to obtain and compare multiple quotes.
  
  

The Cons:

• If you don't have an optimal sales process, it will be hard for you to convert these leads into customers because one of the other lead buyers will jump on it before you do.
• They create a lack of transparency because buyers don’t have insights into how many times leads were sold and to whom.
• This model increases the chance that bad leads may be forwarded.
• It may result in lower conversion rates and more overhead spent nurturing leads.
• Shared leads often have lower average ticket prices than exclusive leads.

Shared leads are cheaper than exclusive leads, but not necessarily more cost-effective.

Companies that have strong brand awareness, fantastic websites, competitive products or services, and a competent team are the ones who do best with this kind of scenario.

These established and on-their-game companies usually thrive with shared leads because there is a limit to how many times a lead can be shared with competitors—and if a company runs a tight enough ship, they can reasonably assume that they’ll look more impressive than their competitors.

But for companies that would rather not share their leads with competitors, exclusive leads might be the better choice.

What is an "Exclusive Lead"?

Exclusive leads take away the competition factor but are often sold at a much higher price. The most common type of exclusive leads is a live transfer, usually via click-to-call functionality. While exclusive leads allow buyers to have dibs on certain leads, they have less of a chance to be selective about leads.

Pros:

• Overall lead quality with exclusive leads is higher.
• If your public brand awareness is low, exclusive leads may be the way to go.
• Exclusive leads put you at an advantage because you are in direct content with leads.
• Exclusive leads give you the possibility to target certain service areas (if required).

Cons:

• Exclusive leads almost always come at a higher cost. 
• They might come in a lower volume.

Exclusive leads give a business the opportunity to receive lead information without it being shared with competitors. That means potential customers are given one option rather than multiple options, which makes the likelihood of conversion much greater.

This is clearly advantageous for nearly every kind of company—from startups to established professionals—but it has to make sense from a financial perspective. Because exclusive leads are precious, they usually cost more than shared leads.

Exclusive vs Shared: What is right for you?

Only you can decide.

If you don’t have a problem budgeting for it, exclusive leads will provide a surer path toward sealing a deal. If a potential customer is only reaching out to you, you have a higher likelihood of converting them into a customer.

The downside here is that you’ll have fewer leads with the exclusive model (albeit with less competition) than with shared deals. If you think your business and team might make the cut and stand out among competitors to potential customers, you might find that your profit margins are more impressive with shared leads.

The good thing about exclusive vs. shared leads—and all other nuances involved in lead generation services—is that you’re free to tinker with things. Take a close look at your analytics. Keeping tabs on what is working in your advertising strategies and what isn’t is essential if you want to continue to grow your company.

When making your decision it's crucial that you carefully consider your company’s offerings, strengths, and weaknesses. Of chief importance, consider your budget. Lastly, consider the real return on investment potential. You may find that spending more on exclusive leads will, in all likelihood, lead to higher profit margins.

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• Understanding Lead Generation & Your Role In Its Success
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