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Buying Leads: Good and Bad Lead Companies

Feb 27, 2008
It may sound as an easy way to build a mailing list and market your business, but buying leads may not be always a wise investment. There are some legitimate lead companies out there, with high standards and high level of ethics. Unfortunately, there are also companies out there that will sell the names of deceased people or entirely fictional people names and addresses.

The leads are generated by many lead companies through advertising such as contests for free televisions, cars, or other costly items. A person fills out a form, including personal information such as their name, email address and phone number in order to enter the contest. The longer the form, the lead becomes more expensive. Usually there is some fine print on the form that says that by filling out the form, the person agrees to receive information about a home-based business or other offer, but the person filling out the form is not even noticing it.

The company generating the lead this way then takes that information and sells it to their unsuspecting customers. When the lead buyer calls the lead, the person has no idea what he or she is talking about. The lead company also sells the same lead information to more than one customer, so now, instead of only one lead purchaser calling a person's phone number, there are another 3-4 people doing the same thing.

The "lead" (the person filling out the form in the first place) is now on a few mailing lists and a few phone marketing lists. The lead purchaser is now out of the money that they spent on the leads. Because there was a little bit of fine print on the form that mentioned acceptance of information about an offer, the lead company is not guilty of false advertising.

Not all companies offering leads for sale are bad or unethical. With proper research, one can find great companies that stand behind their offers and services. It can be done. The best way to find if a company is delivering good leads is by word of mouth, from a trusted source.

A detail as the amount of time a lead generation company has been in business can be decisive when buying leads. Unethical lead generation companies are caught easily by their customers, so their market life is pretty short.

Also, when starting a relationship with one of the lead companies, always buy the smallest package available, so you have an idea of what type of leads you will receive should you make a more expensive leads purchase later. As always, the proof is in the pudding: the amount of sales that you make out of that purchase will tell you if you need to buy more or just drop totally that specific lead company.
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