A pay per lead agency builds and runs a channel for you and bills per result. Pay per lead generation companies sell you contacts from a funnel they already own. Both charge per lead and only one of them leaves you with anything when you stop paying, which is the difference worth deciding on.
Who owns the funnel
When a lead generation company's contract ends, the flow stops that week and you keep the customers you already won and nothing else. When an agency has built campaigns in your own ad accounts on your own domain, the asset stays with you at reduced effectiveness. The per-lead price can be similar; the residual value could not be more different.
What the numbers say about building against buying
In the nearest published comparison, generating leads through paid media costs $50 to $120 against $80 to $150 to buy them exclusive, with the lower figure conditional on genuine competence. The premium for buying is therefore roughly $30 to $60 a lead, which at any serious volume exceeds the cost of the competence it substitutes for.
Bounding an agency arrangement
A pay per lead agency that bills per result sounds like it carries the risk, and it does until the results are cheap and poor. Write a target cost per booked job into the contract alongside the cost per lead, and review it monthly. Without that second number an agency is incentivised to produce volume rather than work, which is the failure mode of every per-result arrangement in this market.
Questions people ask about pay per lead agency
What is a pay per lead agency?
An agency that builds and runs marketing for you and bills per result rather than on a fixed retainer. The distinction from a lead generation company is who owns the funnel.
Which is cheaper per lead?
They can be similar. The published gap between generating leads and buying them is roughly $30 to $60 a lead, so the deciding factor is usually ownership rather than unit price.
How do I stop an agency optimising for volume?
Write a target cost per booked job into the contract alongside the cost per lead, and review it monthly. A per-result deal measured only on leads rewards cheap ones.
What do I own at the end?
With an agency working in your own accounts, the campaigns, the domain and the audiences. With a lead generation company, only the customers you already won.