Finding the right B2B appointment-setting partner for your lead generation needs is rarely an easy decision. There are countless factors for you to consider: experience, technology, references, and the overall “vibe” you get from talking to the company, to name just a few.
But, of course, the final decision often comes down to money—not just how much you’ll spend, but how you’ll spend it.
When choosing your lead generation and appointment-setting partner, it often comes down to deciding between two pricing models: an hourly rate or pay-per-performance.
While there are plenty of variations and nuances to each model, the main difference comes down to this: An hourly rate means you pay a flat fee for the time your partner devotes to your program, regardless of how many appointments are set for your sales reps. Pay-for-performance, on the other hand, means you pay for each appointment set on your behalf.
In theory, pay-per-performance might sound like the ideal pricing model, sort of reminiscent of those fast-talking salesmen you see on late-night cable TV: “If we don’t deliver, you don’t pay!!”
But there’s a reason why VSA and most other high-end firms utilize an hourly pay structure for their client partnerships. We find it to be the most mutually beneficial, and the model most likely to produce consistent results for our clients.
An hourly rate delivers the following three advantages:
1. Creates a sense of urgency to optimize results as quickly as possible
VSA knows we only have a short window of time before a client expects to see certain results. Taking a set-it-and-forget-it approach to appointment-setting or focusing solely on the performance of our Business Development Representatives isn’t likely to yield the type of quality meetings our clients entrust us with scheduling for them.
The hourly pay structure allows us to actively devote a multitude of resources to our client programs, with everyone from the tech team to the Senior VP of Operations invested in helping a client succeed.
VSA’s management is fully incentivized to design the best program and handle all the moving parts. It’s all or nothing—either you are satisfied with the results and choose to continue the partnership, or you stop. We never want to leave that decision to chance.
While a pay-for-performance firm would seemingly feel the same sense of urgency, they might be so laser-focused on the BDRs’ ability to deliver appointments that other factors involved in optimizing the program (the calling list, the script, the dialing technology) could get short shrift.
2. More appointments for your money
An hourly program is the ideal pricing model if your lead gen partner delivers more appointments than expected. When a program is running at its peak, you should expect periods where appointments increase—and you don’t pay a dime for these extra meetings!
Occasionally, VSA even has programs in which a clients’ sales reps can’t keep up with the number of scheduled appointments in a week. That’s a great problem to have—unless you’re paying for each appointment. The hourly pricing model allows companies to prioritize which prospects to meet with based on the quality of the appointment, without the fear of wasting their money on a meeting they didn’t attend.
With a fixed hourly rate, you don’t know exactly how much you’ll be paying per appointment from week to week, but you can budget a monthly payment and expect a minimum required level of meetings.
3. Higher-quality appointments
If your lead gen partner’s only payment source is scheduled meetings, then their only incentive is to deliver a high quantity of appointments, while minimizing the importance of each meeting’s quality.
And here’s another factor to consider: If a firm is being paid per appointment, then the BDRs making the telephone calls to prospects likely are also being paid per appointment.
That means even if a prospect gives a valid reason for a lack of interest (no budget, happy with their current vendor, under a long-term contract) or acknowledges they’re not the right decision-maker, BDRs might still push hard for the appointment. And what looks like a win in the moment ends up being a waste of time for your sales rep—and a waste of money for your company. You’re also likely to pay more per appointment, since the lead gen firm probably needs to factor the risk into the pricing.
Pay-per-appointment firms work best for cookie-cutter programs, because they rely on BDR labor to produce results. If your program is unusual or challenging, a pay-per-appointment firm will have little incentive to use management talent to improve scripts and lists.
As a result, you may end up with a program that either produces too many unqualified appointments or doesn’t produce enough results—both of which may prevent you from achieving your financial goals.
Conclusion
Before partnering with a lead gen firm for your B2B appointment-setting needs, it’s best to ask a lot of questions—including learning about the company’s pricing model.
If your only goal is setting appointments—regardless of their quality—perhaps a pay-for-performance model makes the most sense for you.
However, if you view appointment-setting as part of a larger picture for growing your business, an hourly-based model is probably the way to go.
If you’d like to talk pricing—or any other aspects of a B2B lead generation campaign—give us a call or drop us an email. We’re always excited to talk about ways to help companies reach their sales goals.