sales strategy

How to start a profitable lead generation business

Noel Bouwmeester
LAST UPDATED
May 3, 2024
READING TIME
7 min.

If you have sales and marketing skills but don’t want to create a product…

Then, starting a lead generation business may be a great way to use your expertise and generate substantial income by connecting companies with quality leads.

Below, we’ll share how to start a lead generation business, its challenges, and how to actually find leads and clients. ⬇️

What is a lead generation business?

A lead generation company specializes in finding potential customers (leads) for other businesses.

The goal of lead generation is to collect information from people who have shown some level of interest in a product or service.

The leads are then sold to other companies that can convert them into paying customers.

These businesses pay handsomely for these leads because it means that they don’t have to spend time and resources looking for leads themselves.

Challenges of lead generation businesses

Starting a lead generation business has a low barrier to entry.

However, just as with any business, it comes with its own set of challenges.

Cost 💵

Even for starting a one-person lead generation business, you’ll need some money to get started for:

  • A domain
  • A professional website
  • Hosting
  • Subscriptions to lead generation tools

The cost of starting a lead generation business increases exponentially for larger-sized lead generation agencies.

Lack of lead quality

Businesses purchasing leads expect to receive good quality leads.

Adequately filtering out bad leads requires ongoing optimization and refining of the lead generation process.

Competition 🆚

Because of lead generation’s low barrier of entry, it has become a competitive field.

One of the challenges lead generation businesses have to deal with is standing out among their competitors.

Differentiating your service and niching down to create a unique value proposition is increasingly important in the lead generation business.

Laws and regulations

Being aware of relevant laws and regulations is essential when starting a lead generation business.

Applicable laws could include:

  • GDPR
  • CAN-SPAM
  • CCPA

Consult a lawyer before starting lead generation, as failing to do so could result in significant fines.

Where to find leads

To start a lead generation business, you need to be able to find, well… leads!

There are several methods you can use and in this section, we’ll discuss some of them.

Cold email ❄️

When done right, cold email can be highly effective for generating leads.

It allows you to reach out to a specific set of customers and filter your contact list based on factors like industry, job title, and much more.

In other words, you start with a targeted list and then take the most responsive leads and sell them to your clients.

Since everyone with an email address has already received thousands of cookie-cutter outreach emails, it's important to personalize each one.

Fortunately, that doesn’t mean you have to write each email by hand.

Cold outreach tools like lemlist can do most of the work for you.

lemlist allows you to run highly personalized multichannel outreach campaigns.

lemlist allows you to personalize at scale like no other outreach tool. Your emails will look just like a manually written email.

With lemlist, you can use the usual (custom) text replacements, but it goes much further than that.

Take its feature liquid syntax, for example. It allows you to display different content based on specific conditions, such as the recipient's location, interests, or campaign interactions.

LinkedIn

If you’re looking for leads for a B2B audience, you can’t go wrong with LinkedIn. It’s the best social media platform for generating leads.

With LinkedIn Sales Navigator, you can run more advanced searches than with regular LinkedIn search. It allows you to zoom in on the most relevant leads.

LinkedIn Sales Navigator even recommends leads based on your saved searches and activity, bringing you new leads you might not have discovered on your own.

Once found, you can quickly push the leads to any lemlist campaign with lemlist's Chrome extension.

With the leads in your campaign now, you can start your outreach.

SEO (Search Engine Optimization)

Have SEO skills? Can you rank a website on a specific topic?

If so, you can capture leads through sign-up forms on your website.

If people sign up, you know those leads are already pre-qualified and probably in the market for your client's product or service.

Obviously, it takes time to build a website, get it ranked, and maintain those positions, but in terms of monetary costs, you can’t beat having a lead-capturing website.

Leads databases

One of the easiest ways to find leads is through a lead database.

Now, you might be asking: why wouldn’t potential clients use such databases?

The answer is simple: your clients want ready-to-go leads delivered to their “doorstep.” They certainly don’t want to spend hours per week filtering and tweaking lead databases’ search results.

lemlist comes with a 450M+ B2B leads database. its advanced filters allow you to find the specific leads your clients need.

Best of all? You can add them to any lemlist campaign with just one click.

How and where to find clients

Define your offer

The first step to finding clients is defining your offer.

Start with a narrow niche focus instead of being a general lead supplier. This allows you to get a foot in the market’s door.

For example, you could target SaaS companies in a specific industry and then expand to other industries as you grow.

Define your ICP

Your Ideal Customer Profile helps you define who your customer is.

Knowing their paint points, where they hang out, and what kind of language they use helps refine your marketing.

Our AI-powered ICP generator will help you generate an ICP in just a few minutes, giving you an advantage over the competition, which might take weeks to develop one.

Social Media

Social media, especially LinkedIn, is a great place to find clients.

Now, in addition to looking for clients with Sales Navigator, I'm also talking about setting up actual profiles and content that attract clients.

How?

  • Share how you find leads
  • Share your marketing experiments
  • Share insights on industry trends
  • Create infographics on industry stats
  • Like and comment on posts of your potential clients

The first four action items above demonstrate your expertise and commitment to your industry; the last one helps you gain visibility with potential clients.

Outreach

You can use it to uncover high-quality leads and to find clients to whom you can sell them.

Armed with your ICP and unique offer, you can start to find leads similarly to how you would find leads for other companies.

Then, use a tool like lemlist for the actual outreach. With lemlist, you can reach out to your leads using a multichannel approach.

lemlist allows you to bulk send hyper-personalized outreach emails that look like real human emails.

Instead of just email outreach, lemlist also lets you engage your leads through other channels like:

  • LinkedIn (Invitations, chat and voice messages)
  • Cold calling
  • Manual steps with reminders (Comment post, like post, etc. The sky’s the limit.)

lemlist multichannel image

What to charge for leads 💹

Most lead generation businesses have one of two ways to charge for leads:

  • Average Contract Value (ACV) - Average price a client pays for a set of leads or for access to a lead generation platform (think Apollo, Rocket Reach, or even lemlist’s leads database).
  • Cost Per Lead (CPL) - Clients pay a predetermined amount for each lead.

The actual cost per lead, be it through ACV or CPL, depends on your industry and how qualified the lead is.

To find out how in-demand your industry is, check the pay-per-click costs for a main keyword in your niche.

Also, run searches for main keywords in other industries to compare the costs per click. This will give you an excellent idea of how much you can charge for leads in your industry.

Naturally, a more competitive and in-demand industry will command higher prices, sometimes up to several hundred dollars per lead.

One thing is for sure: understanding the competitive landscape is essential for accurate pricing, and it may be the deciding factor between your business's success and failure.

Stand out from the competition

Lead generation is a field with a low barrier to entry.

However, that automatically means there’s a lot of competition.

Differentiating yourself is crucial to your success, especially in the beginning when you’re still making a name for yourself.

A simple way to set yourself apart is the ability to find high-quality leads quickly.

lemlist AI-powered leads database allows you to do just that. You can even reach out to the leads with a single click.

Sign up for a free 14-day lemlist trial here.

Noel Bouwmeester
SEO Content Writer @ lempire
Get weekly outreach tips
SHARE THIS ARTICLE
Thanks! You've successfully subscribed to lemlist newsletter
Oops! Something went wrong while submitting the form.

Multichannel Expert

$
99
/ MO
Per user / 5 SENDING EMAIL
Everything in Email Pro
Email finder + verifier (500 credits/mo)
500 free credits per month
Linkedin prospection
LinkedIn voice notes
with Aircall
Cold calling prospection with Aircall
with Aircall
Advanced campaign conditions
Custom landing page
Premium support chat

Outreach Scale

$
159
/ MO
Per user / 15 SENDING EMAIL
Everything in Multichannel Expert
Email finder + verifier (1,000 credits/mo)
1000 free credits per month
Dedicated account manager (4+ seats)

More than 10 users?

Multichannel Expert

$
89
/ MO
Per user / 5 SENDING EMAIL
Everything in Email Pro
Email finder + verifier (500 credits/mo)
500 free credits per month
Linkedin prospection
LinkedIn voice notes
with Aircall
Cold calling prospection with Aircall
with Aircall
Advanced campaign conditions
Custom landing page
Premium support chat

Outreach Scale

$
144
/ MO
Per user / 15 SENDING EMAIL
Everything in Multichannel Expert
Email finder + verifier (1,000 credits/mo)
1000 free credits per month
Dedicated account manager (4+ seats)

More than 10 users?

Multichannel Expert

$
79
/ MO
Per user / 5 SENDING EMAIL
Everything in Email Pro
Email finder + verifier (500 credits/mo)
500 free credits per month
Linkedin prospection
LinkedIn voice notes
with Aircall
Cold calling prospection with Aircall
with Aircall
Advanced campaign conditions
Custom landing page
Premium support chat

Outreach Scale

$
129
/ MO
Per user / 15 SENDING EMAIL
Everything in Multichannel Expert
Email finder + verifier (1,000 credits/mo)
1000 free credits per month
Dedicated account manager (4+ seats)

More than 10 users?

PRM Tool
G2 Rating
Price
Best for
Standout feature
Con
4.9
star
star
star
star
star
$30/mo
$75/mo
$2,999/mo
Large, distributed sales teams
AI evaluation precision, gamified KPIs
Lack of tracking system
4.6
star
star
star
star
star-half
Not publicly available
Sales operations and finance teams
Powerful configurability
Limited training resources and complex to navigate
4.4
star
star
star
star
star-half
Not publicly available
Mid-market and enterprise businesses
Comprehensive incentive management
Potentially high cost and steep learning curve
4.7
star
star
star
star
star-half
$15/user/mo
$40/user/mo
Enterprise: custom price
Complex sales structures and businesses of all sizes
Intelligent quota management and gamification
Steep learning curve
4.6
star
star
star
star
star-half
Not publicly available
Collaborative teams
Connected planning
Complexity and steep learning curve
4.6
star
star
star
star
star-half
Not publicly available
Companies with complex sales structures
Complex incentive compensation management (ICM) with high efficiency and accuracy
Complexity for smaller teams and potentially high costs
4.7
star
star
star
star
star-half
Not publicly available
Companies who want to automate commission calculations and payouts
Simplicity and ease of use
Lack of features like redirection
4.7
star
star
star
star
star-half
$30/user/mo
$35/user/mo
Custom: upon request
Businesses that need a comprehensive and user-friendly sales compensation management software
Ease of use and adoption
Lack of ability to configure the product based on user needs
4.8
star
star
star
star
star-half
Not publicly available
Companies with modern sales culture and businesses who want real-time insights
A built-in dispute management and real-time visibility
Users say it works slowly, customer support is slow
4.9
star
star
star
star
star
$30/user/mo
$50/user/mo
Smaller sales teams
Powerful automation
Lesser user base and average user interface
4.7
star
star
star
star
star-half
Not publicly available
Companies with scalable needs
Automated Commission Calculations
Lack of filtering by date, no mobile app
PRM Tool
Rating
Feature
Pro
Con
Mobile App
Integrations
Free Plan
Pricing
4.65
star
star
star
star
star-half
Org-wide alignment
User-friendly layout and database
Suboptimal as a personal CRM
square-check
Lack of tracking system
square-check
Team: $20/month
Business: $45/month
4.7
star
star
star
star
star-half
Social Media Integration
Easy contact data collection
No marketing/sales features
square-check
Lack of tracking system
square-xmark
7-day trial
$12/month
4.75
star
star
star
star
star-half
Block Functions
High customization capability
Not a dedicated CRM
square-check
Limited
square-check
Plus: €7.50/month
Business: €14/month
N/A
Open-source
Open-source flexibility
Requires extensive manual input
square-xmark
Limited
square-check
Self-hosted
$9/month or
$90/year
3.1
star
star
star
Simple iOS app
Ideal for non-tech-savvy users
iPhone only
square-check
iOS only
Limited
square-xmark
1-month trial
$1.49/month or
$14.99/month
3.6
star
star
star
star-half
Smart Contact Management
Feature-rich and flexible
Reported bugs
square-check
Rich
square-xmark
7-day trial
Premium: $13.99/month
Teams: $17.99/month
4.4
star
star
star
star
star-half
Customizable Interface
Customizable for teamwork
Pricey for personal use
square-check
Rich
square-xmark
Standard: $24/member
Premium: $39/member
4.7
star
star
star
star
star-half
Integrated Calling
Integrated Calling
Too sales-oriented & pricey
square-check
Rich
square-xmark
14-day trial
Startup: $59/user/month
Professional: $329/user/month
4.8
star
star
star
star
star
Business Card Scanning
Business Card Scanning
Mobile only
square-check
Limited
square-check
$9.99/month
4.45
star
star
star
star
star-half
160+ app integrations
Comprehensive integrations
No free app version
square-check
Rich
square-xmark
14-day trial
$29.90/month or
$24.90/month (billed annually)
PRM Tool
Capterra Rating
Free Trial
Free Plan
Starting Price (excluding the free plan)
Maximum Price (for the most expensive plan)
Best for
4.5
star
star
star
star
star-half
square-check
14-day
square-check
Up to 1,000,000 contacts
€15/month/seat billed annually
€792/month/3 seats billed annually + €45/month for each extra seat
Versatility and free plan
4.2
star
star
star
star
square-check
30-day
square-xmark
But it offers reduced price to authorised nonprofit organisations
€25/user/month
€500/user/month billed annually (includes Einstein AI)
Best overall operational CRM
4.3
star
star
star
star
star-half
square-xmark
square-check
Limited to 3 users
Comprehensive incentive management
€52/user/month billed annually
Small-medium businesses and automation
4.5
star
star
star
star
star-half
square-check
14-day
square-xmark
€14/seat/month billed annually
€99/seat/month billed annually
Sales teams and ease of use
4.1
star
star
star
star
square-xmark
square-check
Limited 10 users
$9.99/user/month billed annually
$64.99/user/month billed annually
Free plan for very small teams up to 10

What you should look at next

Receive weekly outreach tips in your inbox, sent to 210 000+ salespeople, marketers, founders, and entrepreneurs worldwide!

Subscribe to the lemlist newsletter
You've successfully subscribed to the lemlist newsletter!
Oops! Something went wrong while submitting the form.