Two kinds of source: they come to you, or you go to them
Inbound sources bring leads that found you. Outbound sources give you businesses to contact first. The trade is simple: inbound leads start warmer but arrive on their own schedule, and outbound leads start cold but you choose them and set the volume.
If the words cold and warm are new, start with what a lead is.
The sources, side by side
| Source | You pay | Speed | You choose who |
|---|---|---|---|
| Referrals from customers | Little or nothing | Slow and uneven | No |
| Your website and search traffic | Time, content, sometimes an agency | Months to build | Partly, by what you write about |
| Paid search and social ads | Per click or per lead, every day | Days | Partly, by targeting |
| Events and trade shows | Stand, travel and time | A few times a year | Partly, by the event |
| Business directories, by hand | Your own hours | Slow | Yes |
| A lead list for one niche and place | Per row, once | Minutes | Yes |
| Running your own scraper | Tool, proxies and upkeep | Hours, after setup | Yes |
| A lead marketplace | Per file, set by the seller | Minutes to a day | By what sellers offer |
| Pay-per-lead services | Per lead delivered | Days | By the service's own filters |
The last column is the one most comparisons leave out. If you sell to a narrow kind of customer, such as dental practices within an hour of your office, the sources that let you choose are worth more to you than the ones that send whoever turns up.
Inbound sources in practice
- Referrals. The best conversion and the least control. Ask every happy customer for one, and do not plan revenue around them.
- Search traffic. People looking for what you do find a page you wrote. It compounds over time and is slow to start.
- Paid ads. The fastest inbound source, and the one that stops the day you stop paying. Track what each lead costs with the cost per lead calculator.
- Events. Good conversations, few of them, at a high cost each.
Outbound sources in practice
Outbound starts with a list of businesses that fit. The question is only how you get the list.
- By hand. Searching a directory and copying details into a spreadsheet. It works for twenty businesses. It does not work for two thousand.
- A scraper you run. You set up the tool, feed it searches, wait, then remove duplicates and fix the columns. You own the result and the upkeep.
- A ready list. Someone has already collected and de-duplicated the businesses. You choose the niche and the place and pay for the rows. On LeadsByCity that costs $7 per 1,000 rows with a $7 minimum, and you see the count and sample rows first. Start from the lead finder.
- A marketplace. Independent list builders sell files they collected, often for niches no ready list covers. The Lead Market holds payment in escrow until you have inspected the file.
How to judge a lead source
Ask the same five questions of every source before you spend on it.
- 1Can I see what I am buying before I pay? A count and real sample rows, not a promise.
- 2Do I choose the leads, or do they choose me?
- 3What does one lead cost, and what does one customer from this source cost?
- 4Is the lead mine alone, or sold to my competitors as well?
- 5Where did the data come from, and may I contact these businesses under the rules where they are?
Keep a simple record per source: what you spent, how many leads, how many customers. After a quarter the numbers usually make the decision for you.
A sensible mix for a small team
One source you control and one that compounds is enough to start. For most teams that sell to local businesses, that means outbound to a chosen list now, and a website that earns search traffic over time. Add paid ads once you know what a customer is worth and what you can afford to pay for a lead.
If your customers are local businesses of a particular kind, local lead generation covers the outbound side step by step.
Questions and answers
- What are the main lead sources?
- Referrals, your own website and search traffic, paid ads, events, directories searched by hand, ready-made lead lists, scrapers you run yourself, lead marketplaces and pay-per-lead services.
- Which lead source is cheapest?
- Referrals cost least but cannot be scaled on demand. Among sources you can scale, a list for one niche and one place usually has the lowest cost per lead, because you pay per row once and choose exactly who is on it. What matters more is cost per customer, which depends on how well the leads fit.
- What is lead sourcing?
- Lead sourcing is the work of finding businesses that fit your target customer and collecting a way to contact them. It comes before outreach: sourcing produces the list, and outreach works through it.
- How many lead sources should a business use?
- Two or three that you measure properly beat seven that you do not. Start with one source where you choose the leads and one that brings leads to you, and add a third only when you know what a customer from each costs.