This post was originally published on HuffPost Tech.
At the early stages of growth, startups should be emailing and calling thousands of prospects a week. As a startup sources leads, it can feed them into automated drip email campaign software like PersistIQ (YC S14) or Outreach, and/or leverage on-demand call agents to make thousands of calls to prospective customers a day through our platform, VOIQ.
However, at VOIQ, we get the same question over and over again from startups;
“Do you provide the leads, or do we need to get them ourselves?”
Unfortunately, for startups, lead acquisition is a process that they must solve by themselves. And it is not easy to find an optimal solution. It usually comes down to:
1) Buying murky, sketchy lists from obscure sources on the web.
These lists tend to be of very low quality and have yielded very low results for us (and for many fellow founders).
2) Outsourcing this process to high-cost providers like LeadGenius (YC S11).
LeadGenius is pretty good, however it costs $0.75 – $4 per lead, and there is a baseline of $3,000/month (in our case $7,000).
3) Having your team scour the web manually for leads.
Having your team looking for leads is not productive – your limited team should be focused on the latter part of the client acquisition cycle: closing hot opportunities.
4) Joining associations to have access to their updated lists of contacts.
This can be a great departure point depending on the cost.
At VOIQ, we have opted out of the first three options and instead we outsource this process to experts on Elance (now UpWork) and Odesk. Our cost per lead varies between $0.20 to $0.30 per lead. Here’s a breakdown of our process:
We select the category of prospects to reach out to (ie: Hospital Communication Directors on the East coast, Heads of Research for top 10 universities on the West coast etc.). Typically we want a group of at least 500 prospects per category. A number large enough that allows us to learn statistically whether they are an ideal customer profile (ICP) for VOIQ. A number large enough that allows us to launch two or three A/B test campaigns by email and/or call campaign, and at the same time leaves us some room to have one or two less-than-perfect attempts to engage them.
Once we identify the target group, we invest one hour internally to do the research ourselves and collect the URLs of the websites that might have lists or contact information that is relevant to this group.
We then create a Google Spreadsheet with two tabs: Source URLs and Leads. In the “Source URLs” tab, we include the websites where we have found the lists of potential leads. In the “Leads” tab, we create the column headers (First Name, Last Name, Title, Email, Phone, etc.), and list 5-10 examples of leads we found ourselves through our own research.
Once we create this spreadsheet, we go to Elance (UpWork) and post a job as a “data appending & research” or “data extraction” job. We provide a paragraph description of the target leads as well as the fields that we require (Company, First Name, Last Name, Title, Email, Phone, City, State, Country, URL).
When it is our first time evaluating new vendors, we select two or three vendors to do the same job. This allows us to identify the top performer vendor(s) very fast.
Once we select the vendor(s) that applied for this job, we provide them with access to the shared Google spreadsheet and ask them to work directly in this spreadsheet. This way, we are able to see a live update of their work. Our vendors can communicate with us and vice versa through comments on the spreadsheet.
After several jobs, we found our cost-per-lead to be in the range of $0.20 to $0.30 and the time frame to average 10 days per list.
We constantly test new providers in order to build an internal list of the best vendors for specific type of lists.
The second most common question I get from fellow founders is:
“Who are these data-appender vendors that you work with?”
I actually asked the same question to my brother, the person who introduced me to this process, but I am grateful that he directed me to do the exercise myself instead of placing all my hopes in one vendor. Because, unfortunately, there is no one magic vendor! This is the reason why LeadGenius can charge $1 per lead!
We do have 5+ vendors that have done a great job for us, but their level of availability to take on our projects vary. Also, some lists require simple data-appending from online sources, while others require deeper research, and no data-appending request is the same.
Our process allows us the flexibility to outsource a data-appending/research campaign without having to meet any minimums, and for a fraction of the cost of premium services. That being said, we do encourage looking at a side-by-side comparison with premium providers.
We hope our process provides your startup with yet another alternative to source leads.
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