When it comes to sources of business contacts as leads there are a number of different options. They are among the most valuable commodities in business to business sales and marketing and when you’re out shopping for them, you’ll notice they come in different packages.
Pay once for unlimited use – This is the kind of pricing model which needs a one time upfront investment usually in the form of a subscription fee or purchase amount which gives you a years access or an export file of a fairly high volume of business contacts you can use as and when you need to use those business contacts.
Pros
- You pay one time and have access to those contacts whenever you have a need
- They are usually larger databases with more contacts which could be suited to those who need volume over focus
- Considering the volume of contacts and data you have access to the cost per contact is much lower and your investment is spread across a larger number of contacts
Cons
- You pay or make your investment in advance and if you don’t make much use of your access to these contacts, your cost remains the same which means you might end up wasting your investment.
- You may be paying for what you dont need. For example if you spent $10,000 to a database subscription which gives you access to 10,000 contacts of which only 1000 of those contacts are relevant to your marketing and sales needs, you have effectively paid $10 per contact and not $1 as you may have believed.
- If you need very specific business contacts and some amount of customization over volume and more general contacts, then this model is not very suitable as you are paying a fixed price for an ‘off the shelf’ bundled set of contacts.
- You dont get a say in selecting your target accounts or business contacts so the chances of duplication with your existing database and redundancy is always there.
Examples
Hoovers, Active Contacts, OneSource, ZoomInfo, iProfile and InfoUSA are just some examples of a one time ‘pay for access’ or purchase of business contacts model.
Pay per use or on demand – This is the model which lets you select your contacts or buy only as much as you need, when you need them. It’s the category which includes customized business list building services and on demand contact databases.
Pros
- You get to select the contacts or the type of contacts that you suit your requirements so you are effectively getting more qualified business contacts which you know will be useful
- You pay only for what you need to consume so there is very little wastage and the costs are controlled
- There is clearer ROI and the effectiveness is more easily measurable when contacts are selected and used per camapign or per use.
- You have more flexibility with your budget and don’t need to block your entire budget by spending it in advance. With the pay per use model, if you are not happy with a particular source, you can move on to another unlike a one time payment where you can be stuck with something thats not working for you.
Cons
- The cost per contact can be higher with this model as its spread across fewer contacts or depending on the volumes you require. This is specially true for customized list building.
- You may not have instant access to contacts like you may have with a database subscription unless you can forcast your requirement a little in advance and select your contacts just before you need them.
Examples
DirectContact, Reachforce, Demandbase, Jigsaw & Zapdata are examples of options which allow you to select your contacts as per your requirement and pay for just what you need.
There is the free model which includes Linkedin, Spoke and similar network based models but thats another blog post.
There was a time when you had to buy a licence for Siebel or a software CRM. Then, along came Salesforce.com and provided the flexibity of being able to use and pay for 5 users in a small company to 5000 users for a larger company and became the preferred of the two options. It’s the same flexibility you get with your cell phone minutes, that Webex provides with its webinars, that Google uses for online Adsense campaigns, that you get when you need to buy tomatoes for the week at the supermarket. Will ‘pay per use’ business contacts sources become the preferred model for purchasing business contacts and leads? What’s been your experience?