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June 10, 2016 by Stevie Valle

Lead Generation Companies: Scams or More?

Okay so let's talk about the elephant in the room; lead generation companies are just scam artists out to get your money, right? Wrong! While there are definitely scammers out there, just like with any service, not all lead generation services are created equal.

The truth is, lead generation services can be a beneficial addition to your marketing and advertising strategy. Reputable companies will work hard to bring potential customers directly to you, freeing up your team to focus on your clients and the day-to-day of running a business. They also have the potential to save you thousands of dollars in advertising costs by focusing your marketing strategy on tactics that have proved successful, while scraping the rest.

The key is finding a lead generation company that is just as committed to your business's success as you. When shopping around for a lead generation partner, there are a few questions you'll want to ask to make sure your hard-earned money is not going to waste.

How do they find leads?

Most lead generation companies have developed a strategy for finding you leads. Discussing how they obtain this information is one of the first questions you'll want to ask. It's normal that the company won't want to tell you every detail of how they get leads, otherwise, there's no incentive for you to hire them! But most companies will be willing to give you at least a broad overview of how their services work. Be wary of any company that claims they're unable to give you any information on how they work. This is a red flag letting you know this company may be one of those so-called scammers.

Lead sharing, while a common practice, may not be the best way for you to obtain the most leads for your money. Many lead generation companies share leads, meaning they find a list of customers looking for a particular service and then provide either the customer with a list of competitors from which to choose or give the same client list to competitors of similar occupations.

Instead, look for services that have a system in place to bring unique leads to each client so you know you're not spending a lot of money just to have to get into a bidding war with your competitors which could also prove quite costly!

How do they charge for services?

Knowing how you'll be charged is vital to being able to properly budget for advertising and marketing costs. While the standard among lead generation companies is to have a monthly fee, there is typically also an additional cost for each valid lead. To make sure you're within your budget, you'll want to ask about monthly fees as well as lead package prices, or individual lead prices.

You know you may have run into a potential scammer if they want to charge you variable fees month over month with no explanation. Though it's expected you'll pay more when you receive more business, if the price keeps increasing with little to no explanation, it's time to walk away.

What happens if a lead isn't valid?

The downside is many lead generation companies do not have anything in place to validate leads. This means that there is no distinction between a lead that was looking for employment opportunities and one that is looking to hire you. You can imagine how that could cost you both time and money!

Ask the potential partner how they would deal with that or a similar situation. Some companies actually have a team that looks through your leads to make sure you're only getting valid leads and removes anything invalid from your bill.

What do their current and previous clients have to say?

With the growing popularity of sites like Yelp, it's no secret that customer reviews are, and should be, a major deciding factor in partnering with a new lead generation service. You'll be able to see quickly if their clients ever felt scammed.

One thing to note, with any review service, it's more common for customers to leave scathing reviews than recount their positive experience. While you're checking out reviews, don't forget to look at the testimonials on the lead generation company's website. This will give you a picture of the best-case scenario as well so you can pick appropriately. If they don't showcase testimonials on their site and have horrible Yelp reviews, well, I don't have to tell you that's not the right company to use.


The good news? Service Direct is the answer to all of your lead generation problems! Our leads are exclusive to you, so you're never paying us just to compete with other similar companies. We also record all calls, making it easier for our validation team to spot a bad lead so we can take it off your bill! We've established a pay-per-call model, so you only pay for the leads from new potential customers, not a bulk lead package that may never prove profitable. Want to learn more? Check out how we do it!

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