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Avoid Costly Mistakes When Hiring Lead Gen, Sales, Marketing Agencies, or RevOps Software!
Find People, Agencies, and Software Providers to Power Your Revenue Growth
Dave Menjura & Amir Reiter
October 25, 2024
In partnership with
If you buy based on the lowest price, you're already at a 75% failure rate—and here's why.
All sales-related investments aren’t just expenses—they are investments.
Investments can result in either a 100% loss or unlimited ROI. It’s completely understandable for leaders not to have a clear vision of their ROI, and that’s why tools like Barometrics exist—but that’s a topic for another day.
Negotiating is natural—I negotiate too—but the problem arises when you approach hiring agencies, SDRs, or AEs with this mindset.
These are not expenses; they’re investments.
If you view them as just another cost, it’s time to pause and rethink your approach. Before making a decision, you need to plan for both the best- and worst-case ROI scenarios.
Here’s a real-world example:
I’ve sold over $30 million in lead generation services, and I’ve seen it firsthand—any client investing $5,000 or less per month typically cancels within 90 days, while those committing $1,000,000 per year have stayed with us for 5+ years.
Why? One company bought out of fear, focusing on cost, while the other understood its business model and purchased with confidence, committing to a long-term plan.
The Hidden Cost of Always Seeking the Lowest Price:
When CEOs and Revenue Leaders prioritize the lowest-cost option—whether for services, software, or new hires—they’re effectively choosing to minimize perceived financial risk.
If the main goal is to lower immediate risk, that’s understandable. But consider this: how often is the cheapest solution actually the best?
In practice, buying low-cost often equates to buying lower quality.
Think about your personal purchases—are you buying quality silverware made to last, or are you picking up low-cost cutlery from Alibaba as a short-term solution? In business, as in life, you often get what you pay for.
Know Your Math:
The key isn’t just cost—it’s understanding your Customer Acquisition Cost (CAC) and Lifetime Value (LTV).
Set a target price based on your desired ROI, whether that’s 0% for hyper-growth companies focused on valuation or 1000% for businesses enhancing their cash position and balance sheet.
Your target ROI should guide every investment decision in your business, from agencies to software.
I’ve seen it firsthand: Companies prioritizing ROI, even at a higher cost, see sustained benefits.
Clients who commit to high-value investments have stayed with us for years, while those opting for the cheapest options rarely make it past 90 days.
Value is all about perspective—what’s valuable to one person may not hold the same weight for another. Instead of approaching a situation with 'tunnel vision,' aim to understand the broader picture. I've won numerous deals this way; in one case, my offer was double the cost of a competitor’s, but by sharing unrelated insights and helpful advice with the prospect, I built trust—and they signed with me
How to Avoid Becoming a Bad Buyer: Focus on ROI Over Price.
When negotiating with agencies, selecting software, or hiring new sales reps, shifting from a cost-first mindset to one centered on ROI is essential.
Here are three key questions that will guide you toward evaluating long-term value over immediate price:
1. "How will this service/software help us increase revenue?"
Understanding the direct impact on your revenue clarifies the investment’s true potential and helps justify the cost.
2. "What kind of ROI can we expect, and in what timeframe?"
Knowing the expected return and the timeline for results allows you to set realistic expectations and benchmarks for success.
3. "Can you share case studies or data from similar clients?"
Insights and data from similar companies help paint a clear picture of potential success, reinforcing confidence in your investment.
By focusing on these questions, you shift from being a "bad buyer" obsessed with minimizing costs to a strategic buyer intent on maximizing value.
On a last note, if you’re unsure of your ROI, that’s okay!
Many agencies focus on “Market Validation Campaigns.” These campaigns are not designed to give you an ROI and are not intended to take your company to the Moon!
They will give you the cold, hard truth about your offer and messaging and provide you with the information you need to become a better buyer and plan a successful campaign. Remember, sometimes the truth hurts, but it’s much safer to invest first in uncovering your ROI before attempting to scale a losing campaign.
It's not just ROI, but reducing the risk of not hitting your goal.
Spending less on no results is just huritng the bottom line.
You are better off pocketing the profits than wasting kieny on a less expensive option that increases your risk of not hitting your goals.
What’s Your Approach to Evaluating ROI in Lead Generation and Sales Investments?
When you’re selecting agencies, sales software, or hiring SDRs and AEs, how do you evaluate long-term value over cost? What questions do you ask to ensure your investment generates real ROI?
📩 Reply to this email or drop a comment below with your approach and insights.
Your contribution could be featured in next week’s edition!
Featured Software That Can Help You Calculate ACV, LTV, & ROI On Your Outbound Investment
Leaders who clearly understand their ACV, CAC, and LTV tend to make more accurate investments in Sales; we see a lot of growth spikes from customers who understand the math powering their inbound and outbound funnels.
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