About This Episode
If you’re a business owner or lead the teams responsible for marketing and sales, you’ve likely noticed something unsettling. If you’re paying for leads or ads, your leads are becoming more expensive! You might find yourself spending more money to get the same number or even fewer leads. What’s going on? Why is this happening?
These are the questions that Connor Delaney, Lead Sales Consultant at IMPACT, tackles on the latest episode of Endless Customers, hosted by Alex Winter. In this insightful discussion, Connor breaks down the driving factors behind the rising cost of leads and what business owners can do to get more quality leads while minimizing cost.
Why Are Leads Getting More Expensive?
Alex kicks off the conversation by addressing what many business owners are feeling but not fully understanding: why are leads becoming so costly? According to Connor, it’s happening across industries, and there are multiple reasons behind it.
One of the biggest changes, says Connor, is the evolving way customers are interacting with businesses. “The way people search and find information is changing, and that means businesses need to adapt,” Connor notes. He points out that the rise of AI tools, changes in customer buying behavior, and the sheer competitiveness of digital marketing are all contributing to the upward trend in lead costs.
The Impact of Big Players
In many cases, it’s not just AI or technology that’s changing the landscape, but also the fact that bigger players are spending more on the ways they’ve traditionally won. “Big companies are spending more to stay at the top,” Connor explains, referring to companies that dominate lead aggregators and paid ads. With deep pockets, they can afford to outbid smaller businesses and dominate online spaces where leads are generated.
It’s not just about having the biggest budget, though. Connor shares that big players are benefiting from established customer trust and widespread brand awareness. This is something smaller businesses can’t always match head-to-head.
But how does this affect medium-sized or smaller businesses? It creates an uneven playing field, especially when those larger companies are using the same lead generation methods that smaller businesses rely on. “If they’re outspending everyone on paid ads, that pushes costs up for everyone,” Connor explains.
Buyer Behavior is Changing
What’s fascinating is that even with all this spending, customers are more hesitant to bite. This, Connor says, is where buyer behavior plays a massive role in the rising costs.
“The reality is that customers today are much more educated,” he points out. They don’t just click on the first ad they see. They research, compare options, and make informed decisions—often long before they even interact with a sales rep.
Connor highlights a recent conversation he had with a business owner in the home improvement space, who said they used to get 10 to 30 jobs a month from their SMS campaigns. Now, they’re lucky to get one or two. “People are just not buying based on a quick text anymore,” Connor says. “They’re doing their homework.”
Customers are more informed, but they’re also savvier. Alex chimes in with his own experience, noting that when he shops online, he does a ton of research, looking for the best deal and using multiple tools to make his decision. “I go on incognito mode, I check prices on multiple platforms, and it all plays into whether or not I’m going to buy.”
This means businesses can’t rely on high-volume, low-quality leads anymore. Instead, they need to focus on smaller pools of higher-quality leads—people who are more likely to buy but also more demanding when it comes to their decision-making process.
So, What Can You Do?
Connor’s message is clear: while bigger companies can afford to keep throwing money at paid ads, smaller and medium-sized businesses need to be more strategic. Here are some of his key takeaways for navigating the rising cost of leads:
1. Adapt to Changing Buyer Preferences
The most important shift businesses need to make is understanding that the customer journey is different now. “It’s no longer about hitting as many people as possible and hoping something sticks,” says Connor. Instead, businesses need to understand where their buyers are in the decision-making process and tailor their messaging to fit that.
Buyers are doing more research before they reach out to a company, and businesses need to meet them where they are. This might mean offering more educational content that helps buyers make decisions or focusing on lead nurturing to guide them through the process.
2. Diversify Your Lead Sources
Connor stresses the importance of not relying on just one lead generation tactic, especially paid ads. “You can’t just throw money at ads and expect it to work forever,” he says. Instead, he recommends businesses diversify their lead sources. This could include investing in organic SEO, creating high-quality content that draws in leads over time, or using referral programs to bring in more word-of-mouth leads.
Connor shares an example from a roofing company he worked with that spent nearly $100,000 a month on paid ads. Despite this huge investment, when the business owner Googled “how much does a roof repair cost?”—a key question their customers would ask—the company didn’t even show up on the first page of results. “It’s a huge wake-up call when you realize that paid ads aren’t always the answer,” Connor warns.
3. Focus on Quality Over Quantity
The days of blasting out cold emails and hoping for a return are over. “Businesses are realizing that you can’t just hit volume anymore,” Connor says. “We’re all focusing on smaller pools of quality leads who actually have buying intent.”
This is where smaller businesses can compete effectively. Instead of trying to outspend the competition, focus on offering value to the right people. Create personalized experiences, offer genuine solutions to problems, and build trust with potential customers.
Alex echoes this sentiment, emphasizing that buyers today aren’t easily fooled by flashy ads or discounts. “Buyers are smart,” he says. “They know when they’re being sold to, and they’re looking for authenticity.”
4. Leverage Local SEO
For businesses that serve a specific geographic area, local SEO can be a game-changer. “There’s huge value in dominating your local market,” Connor says. By optimizing for local searches—think “lawn care services near me” or “best bathroom remodeler in [your city]”—businesses can position themselves as the go-to solution in their area.
Connor recommends focusing on building out local content, optimizing your Google My Business profile, and ensuring that your website is mobile-friendly. “Local SEO doesn’t just get you seen—it gets you seen by people who are more likely to buy.”
5. In-House Marketing Is Key
Outsourcing marketing can sometimes lead to slower decision-making and less flexibility. Connor suggests that businesses bring marketing in-house whenever possible, allowing for more agility and faster response times.
“The companies that can quickly adjust to market trends and customer needs are the ones that are going to win,” he says. Having an internal team allows businesses to experiment with different tactics, tweak strategies on the fly, and better align marketing efforts with sales goals.
Buyer Preferences Are Changing—So Should Your Strategy
Connor’s final takeaway is one that every business owner needs to hear: buyer preferences are evolving, and businesses that don’t adapt will struggle to keep up. “It’s the biggest reason why leads are getting more expensive,” he says.
But for those willing to adjust, the opportunity is there. By focusing on quality over quantity, diversifying lead generation efforts, and building trust with customers, businesses can not only survive but thrive—even as lead costs rise.
As Alex wraps up the episode, he leaves listeners with this thought: “You can’t control how buyers act, but you can control how you respond. And right now, it’s all about being smarter, not just spending more.”
Connect with Connor
Connor Delaney is a Lead Sales Consultant at IMPACT who helps businesses understand how they can create the growth they have always dreamed of.
Learn more about Connor
Connect with Connor on LinkedIn
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