Lead generation is the lifeblood of any B2B company. Without a steady flow of sales-ready leads, your sales team will struggle to hit their targets.
But lead generation is difficult. It requires substantial time, effort and expertise across multiple channels like cold calling, email, content marketing, events, etc. Many companies simply don’t have the resources or capabilities to do this effectively in-house.
That‘s why outsourcing has become an increasingly popular option. In this comprehensive guide, we’ll explore the benefits, strategies and best practices for outsourcing your B2B lead generation.
What is Outsourced B2B Lead Generation?
Outsourced lead generation is when you hire an external company or freelancer to handle some or all of your lead generation activities.
Rather than limiting your lead gen to just your in-house sales and marketing teams, you expand it through an outside provider. You effectively “rent” their infrastructure, technology, systems and talent/expertise to generate more leads.
Outsourcing can involve a wide range of lead generation tactics:
- Cold calling/email
- Content creation
- Pay-per-click ads
- SEO
- Social media marketing
- Webinars
- Events
You can outsource:
- Entire lead process end-to-end
- Specific activities (e.g. just cold calling)
- Certain segments or geos
- Overflow leads only
- New channel testing before bringing in-house
- Temporary help to boost capacity
There are B2B lead generation companies that specialize in this, or you can hire individual freelancers. Projects range from small one-off gigs to large multi-year deals.
Benefits of Outsourcing B2B Lead Generation
There are many compelling reasons why outsourcing makes sense for lead generation:
1. Increased capacity quickly
The #1 benefit is getting more done. Adding an outside lead gen provider gives you immediate additional “horsepower” for lead generation. Rather than slowly growing your internal teams, you can scale up lead volume much faster.
This added capacity also provides more flexibility. You can turn lead generation on or off like a faucet based on your evolving business needs.
2. Gain expertise and specialized skills
Lead generation encompasses many different expertise areas from writing to data analysis to human outreach. Unless you run a huge enterprise, chances are your current team lacks specialized skills in some areas.
Outsourced partners dedicate themselves to mastering the latest lead gen best practices. The expertise you “rent” can amplify results.
3. Increase effectiveness of current team
Freed from mundane lead gen tasks, your salespeople can focus on more important, high-value selling activities. Outsourcing handle the repetitive grunt work like cold calls and appointment setting.
Similarly for marketing, outsourcing lower-value work like content creation allows them to focus on strategy, messaging, campaigns and programs.
4. Lower costs
Depending on location, outsourced labor usually costs significantly less per hour or activity than your in-house team. And outsourced talent is often just as skilled.
You also avoid expensive overhead like office space, computers, software licenses, benefits, etc. Outsourcing converts fixed costs into variable, “pay as you go” costs.
5. Reduce risks
Because you’re not hiring full-time employees, outsourcing provides more flexibility to ramp lead generation up or down. You have lower costs and risks for testing new lead gen channels or campaigns.
If an outsourced partner underperforms, you can switch providers. With employees, you’re stuck managing their performance.
6. Operational efficiencies
Specialist lead gen providers already have the systems, automation, workflows and analytics built out. You avoid time-consuming setup and maintenance.
Their operations teams handle all the execution complexities so your team focuses only on high-level direction and strategy.
Challenges of Outsourcing B2B Lead Generation
Of course, outsourcing lead generation has some potential downsides to be aware of:
1. Communication breakdowns
Misalignments often happen because of unclear expectations, lack of feedback and "dropped batons" between your team and the outsourced provider.
This gets amplified across language and cultural barriers. Extra work is required to ensure effective coordination.
2. Low quality output
Some offshore teams promise ridiculously low costs, but quality suffers. Work may be plagued by errors, missing context and lack of business understanding.
3. Data security risks
When third-parties handle your data and systems, it raises potential security, privacy and compliance issues. Proper technical controls and contractual terms are a must.
4. Dependence on the vendor
Over time you become reliant on outsourced talent‘s knowledge and systems. If the relationship ends, the short-term disruption can be painful.
5. Brand and compliance risks
No matter how carefully you monitor them, you can‘t fully control how a third-party interacts with prospects. There‘s always risk of reputational damage.
The key is finding partners who you can develop a trusting, transparent relationship with. Treat them like an extension of your team. When done right, outsourcing delivers tremendous leverage.
Steps for Successful B2B Lead Gen Outsourcing
Follow these best practices to ensure you maximize value from outsourced lead generation:
1. Document your ideal customer profile
Provide very detailed descriptions of your ideal prospects. This includes firmographics (size, industry, etc), titles, needs, pain points and behavioral profile.
Give examples of current customers that fit this profile. The more comprehensive your ICP description, the better your vendor can target qualified prospects.
2. Set crystal clear expectations
Leave no room for ambiguity on expected deliverables, timelines and SLAs (service level agreements).
Define key performance indicators (KPIs) to track like call connect rates, meetings booked and sales pipeline generated.
3. Maintain aligned messaging
Provide branding guidelines, messaging frameworks, collateral and FAQs. Make sure outsourced reps stay true to your brand voice in campaigns.
Review their messaging periodically to ensure consistency. Record sample calls for feedback.
4. Build the relationship
Foster direct communication channels between your team and vendor reps. Have regular status calls. Encourage back-and-forth feedback.
Share insights on campaign performance and prospect interactions. They should feel like trusted partners.
5. Leverage technology
Deploy tools to smooth collaboration like shared CRMs, workflow management systems and chat channels.
Automate hand-offs between teams via APIs. This minimizes miscommunication and errors.
6. Start small
Don’t go all-in up front before testing quality. Pilot a small campaign first like 10-20 cold calls/emails per week.
Once satisfied with execution, steadily ramp up lead volume. Take a phased approach to build confidence.
7. Have an off-ramp
Structure shorter-term contracts at first with easy out clauses. This maintains flexibility as you evaluate partners.
Monitor SLAs closely. Have a back-up provider in mind if you need to switch.
How to Choose a Lead Generation Outsourcing Company
With the exponential growth of outsourcing, there are now many B2B lead generation firms to choose from. Use this checklist when evaluating potential partners:
Industry expertise – Do they specialize in your industry vertical? Reps will be more effective with existing knowledge.
Geographic reach – Can they handle lead gen across all your target countries and regions?
Services offered – Assess capabilities across key channels like cold calling, email, events, etc.
Technical expertise – Review integration options and tech stack. Can they easily plug into your existing systems?
Data security – What compliance standards do they adhere to? How is data access controlled?
Quality assurance – Is there manager oversight? How is rep performance monitored?
Pricing model – Options include cost per lead, monthly retainers, commissions, etc. Understand model pros/cons.
Contract flexibility – Look for short-term commitments at first. Can you adjust lead volume month-to-month?
Client references – Ask for case studies and client testimonials. Speak to some references directly.
Cultural fit – Assess responsiveness and communication style. Do they seem like people you want to work with?
A bit of upfront due diligence goes a long way in picking the right outsourcing vendor for you.
Lead Generation Outsourcing Models
There are a few typical models companies use to structure their outsourced lead generation:
Full Outsource
With a full outsource model, the provider takes complete ownership of all target lead generation results.
For example, you may pay an annual retainer fee for the outsourcer to deliver 50 qualified leads and 20 sales appointments per month. How they achieve those results is up to them to figure out.
This complete outsourcing transfers maximum responsibility. Your team simply defines the lead targets and consumption process. The partner has freedom to determine best strategies and tactics.
The main risk is lead quality dilution if not monitored carefully. But done right, this can completely take lead gen off your plate.
Hybrid Inhouse + Outsourced
More common is a hybrid model where lead generation is shared between internal teams and external partners.
For example, your in-house SDRs might handle inbound leads and high priority accounts. Additional outbound prospecting could be outsourced to supplement.
Your marketing team develops core campaigns and programs while outsourcers execute specific supporting tactics like appointment setting or content creation.
This blended approach gives you more control over lead process and quality. You only outsource specialized or overflow work. The hand-offs require coordination, but you benefit from both internal and external capabilities.
Temporary Project Outsource
Rather than ongoing lead generation, you may outsource a short-term targeted campaign.
For example, you could partner with a firm for a 2 month cold email nurturing project focused just on your inactive sales leads.
Or you outsource appointment setting for a specific 2 week webinar campaign. Once the campaign wraps, so does the outsourcing partnership.
This project outsourcing works well for short lead bursts, seasonal spikes or testing new channels. The time-bound nature limits risks and costs.
Outsource to Test Channe
Some companies use outsourced lead generation purely for testing new lead channels before bringing them in-house. This is a smart way to cost-effectively validate new lead sources.
For example, you believe events could be a strong channel but lack in-house event marketing expertise. Outsource to an event lead gen specialist for 3-6 months to prove out the channel and refine messaging.
Once you’ve confirmed event marketing works, you transition it internally from the outsourcer. This “outsourced pilot” approach reduces risk of new initiatives.
Lead Generation Outsourcing Pricing Models
There are several common pricing approaches for outsourced lead generation. Each has pros and cons to factor into your decision.
Fixed Monthly Fee
A flat monthly fee buys you a set package of lead generation deliverables each month. This provides predictable costs for your budgeting.
However, consumption flexibility is limited if your needs fluctuate up and down. Renegotiation is required to increase or decrease lead volume.
This works best for a steady lead volume you can accurately forecast. There may be large minimum commitments.
Per Lead Pricing
One of the most common models is paying per lead generated based on your ideal customer profile. Fees are variable tied directly to lead volume.
This pricing incentivizes lead quality. However you may pay for unqualified leads that seem to match your ICP but don’t actually.
Define lead qualifications very clearly. Multi-tier pricing can apply based on lead depth with escalating rates.
Performance Based (Commission)
You only pay for actual sales results from the leads, for example 15% commission on closed deals. This ties spend directly to revenue.
The risk is the outsourcer may focus too much on unqualified leads with a higher chance of closing rather than difficult target accounts.
Include protections like requiring a minimum deal size and excluding existing leads. Higher commissions justify more effort.
Cost Per Activity
Each lead generation task is billed at a pre-set rate – ex. $100 per cold call hour, $500 per lead list generation, etc.
This approach offers predictability on activity costs. However, it separates spend from lead outcomes.
Activity pricing works best for specialized outsourced tasks vs. end-to-end lead process outsourcing.
Retainer + Overage Fees
A base monthly fee covers an estimated level of activities. Additional work beyond the retainer is billed hourly or per unit.
This gives you flexibility to cost-effectively scale lead generation volume up and down beyond the minimums.
Factor in how easy it is to increase monthly minimums if your base needs grow. Negotiate discounted overage rates.
Mistakes to Avoid in Lead Generation Outsourcing
While outsourcing lead generation offers many benefits, you need to avoid some key pitfalls to be successful:
Not Defining Your Ideal Customer
Failing to provide granular detail on your target customer profiles is one of the biggest mistakes. The outsourcer needs to clearly understand your ideal customer demographics, firms, titles, needs, and behaviors.
Without this, they will chase generic leads that don’t match your ideal buyer. Lead quality suffers without an aligned ICP.
No Performance Visibility
You must closely monitor and measure your outsourced partner’s campaign performance. Don’t just assume activities translate to results.
Request regular reporting on lead volume, sales pipeline, activities completed and cost per metrics. Voice sample calls. If you can’t measure it, you can’t manage it.
Focusing on Cost Over Quality
Some partners promise extremely low per lead costs but quality is low. Unqualified or outdated leads waste time and money.
Prioritize partners with proven lead quality and higher pricing over bare bottom costs. It actually costs you more in the long run to chase low quality leads.
Not Defining Metrics and SLAs
You must define specific performance metrics like call connect rates, number of leads, etc along with minimum service levels the partner must meet.
Without proper SLAs, you have no way to hold them accountable or even measure program success. Monitor closely and renegotiate if not met.
No Direct Communication
Lack of direct communication between your team and the outsourced reps is a common complaint. Conversations only through an account manager lead to misalignment.
Facilitate direct interactions through status calls, shared tooling and communication channels. This improves hand-offs, best practice sharing and relationships.
B2B Lead Generation Outsourcing Risks
While outsourcing lead generation can transform growth, it does not come without risks. Be aware of these potential pitfalls:
Dependence On the Outsource Partner
Over time you become reliant on the outsourcer’s talent, knowledge, data and systems. If the relationship ends, it causes significant disruption.
Manage this by fostering contacts beyond account reps, maintaining your own lead data, and having a back-up provider in mind. Phase in bringing certain functions in-house.
Loss Of Quality Control
No matter how closely you monitor, you can’t fully control interactions between an outsourced rep and prospects conducted on your behalf.
There is always risk that a poor quality call or email damages your brand. Listen to sample calls and closely track prospect reactions.
Information and Data Security
Third-party access to your confidential prospect data, intellectual property and systems raises potential security and privacy risks.
Require outsourcing partners adhere to recognized security standards. Scrutinize technical controls, policies and practices.
Compliance Violations
Some offshore outsourcers may cut corners and ignore local laws regarding financial regulations, telemarketing and data privacy restrictions.
Choose outsourcing partners with demonstrated compliance expertise in your jurisdiction. Review their internal policies.
Hidden Costs
Factor in needs like staff time for vendor management, tools for sharing data, travel for on-site visits with the outsourcer, and performance monitoring systems. The real total cost may exceed just vendor fees.
Build these functions into your plans and budgets. The time investment is worth it to maximize results.
Key Takeaways and Next Steps
The benefits of outsourcing B2B lead generation typically outweigh the risks if implemented correctly. Follow best practices around agreement details, performance visibility, aligned messaging, strong relationships and lead qualification.
Think through your overall lead generation strategy. Which pieces make the most sense to outsource vs. keep in-house? Document your ICP and funnel metrics to inform outsourcing expectations and pricing models.
Finding the right lead generation outsourcing partner is critical to your success. Assess their experience, industry expertise, services, culture, costs models and security.
To explore outsourcing options for your specific business, click here to have one of our AI-powered solutions experts walk you through the process.