Buying Leads
Should You Buy Leads or Generate Your Own?
Buying leads can help a prepared business grow. They cannot replace a sales process, a budget, or the ability to follow up. Two conversations from my time in lead generation explain when to buy, when to build, and when to wait.
You have a license. You have a product. Maybe you have a desk, a headset, and a new set of business cards that looked like a good idea at the time. Now you need someone to call.
That is usually when people start asking whether they should buy leads, run their own advertising, or pay somebody else to generate opportunities for them. It sounds like a marketing question. Quite often, it is a readiness question.
I have had conversations with people who wanted to buy leads from me and who were not ready to work them. I have also worked with people who had enough resources to buy leads but were trying to build an entire acquisition operation by themselves.
Those are different problems. They can produce the same disappointing result: “The leads are bad.” Sometimes the leads are bad. Sometimes the buyer is not ready. Sometimes both things are true. You need to find out which one you are dealing with before you spend more money.
The new agent I told to wait
One of the most important parts of my job was turning away people who were not ready for purchased leads.
A woman in Texas, around forty and working from home, came to us through one of our advertisements. She had some experience with final expense insurance—the lower-cost life-insurance product often sold to people who do not have much set aside for funeral expenses. It can be a steady product for a good agent, but it is a very different audience from the people who buy annuities.
She had completed a course and held the necessary license, and she wanted to move into annuity sales. She had never earned money in that line of work and had never worked with high-net-worth individuals. Her budget was about $200 a month for leads. Our annuity-lead program used a prospect’s confirmation of at least $100,000 in liquid investable assets as a benchmark—not a universal minimum for buying an annuity, and not a claim that we had independently verified the assets. The leads we sold often involved people with roughly $500,000 or more in net worth and $100,000–$300,000 in investable assets. Those are serious conversations, not practice calls for someone still getting comfortable hearing their own voice.
I told her, in plain language, that it was too early.
She did not know what a CRM was. She was not confident on the phone. She did not yet have a reliable way to organize conversations, remember follow-ups, or see what was happening with the people she had already contacted. She needed practice and a process before she needed a larger flow of expensive opportunities.
My advice was to use networking and referrals for practice, learn to have the conversations, and build the basic working habits first. Networking can give you a starting point and a side channel. It is not a dependable growth engine for a sales-marketing business. You can survive on referrals; you generally cannot build a predictable, scalable business on them alone.
I told her the truth as plainly as I could: with a $200 monthly budget, she would burn through the money before she had built the skill and process to use those leads. An honest person should tell you that. A bad salesperson will take the money and promise to “make something happen.” Someone doing the responsible thing will tell you to wait.
That was not a judgment about her intelligence or her future. It was a judgment about the next useful step. A purchased lead is not a substitute for knowing how to speak to a prospect. It is not a substitute for a follow-up system. It is not a substitute for confidence earned through repetitions.
There is a temptation to think that better leads will solve those problems. They usually make the problems more expensive. If you cannot work a free or low-cost conversation, a more valuable lead does not automatically make you better at working it.
Carl had the opposite problem
Another person—let’s call him Carl—came back to me after disappearing for a while. He had originally bought leads from me. Then he joined a larger insurance agency and wrote to ask for help.
His situation sounded good on paper. He had the resources of a larger company, a good product, and colleagues who could help close business. He trusted my opinion and wanted to know what he should do next.
On a video meeting, he showed me what he had been building. He was trying to create his own funnel, design his own web pages, run his own advertising on Facebook and Google, and manage the surrounding pages and process himself.
He was working hard. The leads were still terrible.
We went through his site and his funnel. Then I asked him to confirm what I already suspected: the leads existed, but the quality was poor.
The problem was not that he lacked effort. For the scale and quality he wanted, he did not have enough budget and specialized experience in the right places. A large lead generation operation can spend years testing offers, audiences, landing pages, creative, tracking, and follow-up. It can also spend a budget that gives it enough room to run those tests.
Advertising platforms are not simply a matter of putting up a page and waiting for good prospects to appear. Google describes its search auction in terms of Ad Rank, which includes the bid, ad and landing-page quality, competition, the search context, and other factors. The highest bid alone does not decide everything. But a small budget still leaves you with less room to test, learn, and fix mistakes.
I told Carl he could buy leads from me, buy them through his agency, or give a clear assignment to his marketing department. I did not care which of those routes he chose. I did care that he stop trying to do every job himself.
We mapped out what he actually needed: qualified leads in ten states, with five states as the immediate priority—Florida, Texas, California, North Carolina, and South Carolina. I looked at the states where he was licensed, the opportunity in each market, and the kind of customer he was best equipped to serve. Lead selection was not only a licensing question. It also had to fit his working style and the conversations he could realistically handle. We discussed the approximate budget, the volume he could handle, and a simple CRM so the work would stop living in a spreadsheet.
He eventually bought leads from me. I kept an eye on the process and helped him work it better. Before we rebuilt the system, he was closing roughly two or three clients a month. Afterward, he was closing at least two or three a week. I had left the company by then and was no longer following his career over the long term, so I am not presenting that as a guaranteed outcome. But it was a meaningful improvement from a system we built together—not a formal training program, just a workable process around the resources he already had.
A lead does not close itself
The part many people miss is what happens after a form is submitted or a lead is delivered.
Can you contact the person? Can you explain the offer without sounding like you are reading a ransom note? Can you follow up when the first call is unanswered? Can you tell the difference between a bad lead and a poor conversation? Can you handle the volume you asked for?
That is intake: the first part of your process for receiving, contacting, qualifying, and moving a lead forward. It is not glamorous, which is probably why people prefer to discuss traffic sources. It is also where a large part of the outcome is decided.
A good lead sent into a weak intake process can look like a bad lead. The same lead sent into a prepared process may produce a completely different conversation. This does not excuse a provider from delivering what it promised. It does mean the buyer has responsibilities too.
The CRM is part of that responsibility. A CRM is the system where you keep contacts, notes, stages, tasks, and follow-up history. A spreadsheet can be enough for a very small experiment. Once several people are calling, or a prospect needs a second, third, or tenth follow-up, a spreadsheet becomes a very optimistic way to lose track of money.
A simple readiness test
Before choosing a source, ask yourself four questions.
1. Do I know which lead I can actually work?
Define the customer, the product, the geography, the qualification, and the next action. “I need more leads” is not a specification. It is a feeling. If you sell insurance, licensing and product fit matter. If you work in several states, the state list matters.
2. Can I handle the first conversation?
You do not need to sound like a television presenter. You do need to know what you are offering, ask useful questions, listen, and keep going when the first call is uncomfortable. If you are still learning how to make a call, practice on lower-risk conversations first.
3. Can I track what happens next?
You need a place to record when a lead arrived, how quickly you responded, what happened on the call, what the next step is, and whether the opportunity became a customer. Without those records, every conclusion about lead quality is partly a guess.
4. Do I have enough budget, time, or expertise?
You do not need to be a large agency. You do need at least one honest advantage: enough budget to run a sensible test, enough time and skill to learn the system, or a qualified person you can hire to do the work. If you have none of those, waiting is not failure. It is cheaper than buying a problem you cannot yet diagnose.
When buying leads makes sense
Buying leads can make sense when you have a defined offer, a working intake process, a way to track results, and the capacity to follow up. You should know what “qualified” means in your business and what the provider is promising to deliver.
The provider should be able to explain the source, the delivery process, the pricing, the replacement or dispute terms, and the limits of the arrangement. You should be able to run a controlled test and decide what you learned.
You are not buying certainty. You are buying an opportunity to run a process you are prepared to operate.
When generating your own leads makes sense
Generating your own leads can make sense when you want control over the offer, the advertising account, the landing page, the data, and the learning process—and you have the time, skills, and budget to earn that control.
Plan as if your first campaigns will lose money. Treat that early loss as a budgeted investment in learning, not as a personal failure. Set a stop-loss before you start, cap the money you are willing to spend, and do not keep feeding a campaign just because you have already spent something on it. The point of the first test is to learn enough to make a better next decision.
It can be a very good path. It can also quietly turn one business owner into a copywriter, media buyer, page designer, analyst, tracking specialist, and follow-up manager. That is a lot of jobs before the owner has made the first sale.
Do it yourself because the work fits your resources and you want to learn it. Hire help because a qualified person improves the economics and the process, not because you want someone else to absorb an undefined problem.
The answer is sometimes “not yet”
The best choice may be to buy leads. It may be to generate them yourself. It may be to hire someone who has already built the part of the process you are missing.
And sometimes the honest answer is: not yet.
That was the right answer for the new agent who needed practice, confidence, and a basic system. Carl needed a different answer: stop trying to be the whole marketing department and build a process around the resources he already had.
Before you spend on the next lead, ask a less exciting question than “How many can I get?” Ask: “What will happen when one arrives?” If you can answer that clearly, you are ready to compare sources. If you cannot, the first thing to buy may be a little time to build the process.
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