Lead generation companies come in a few kinds, so first work out which kind you are dealing with, then ask every one the same short list of questions: who else gets the enquiry, what checks happen before it reaches you, what exactly you are billed for, and how you leave. Then run a short, small test and judge it by cost per signed job.
This is a checklist you can use for any trade. If you are weighing a company against doing the work yourself, see lead generation agency or doing it yourself.
Four kinds of lead generation companies
- Shared-lead marketplaces and job boards. Homeowners post a job or ask for quotes, and several firms get the same details. You pay a subscription, a fee per lead, or both.
- Enquiry sellers. A company runs ads and sells you the enquiries, sometimes to you alone, sometimes to a few firms. Billing is per lead, per call or per appointment.
- Agencies that run your ads. You pay a fee, usually monthly, plus the ad spend. They are paid whether or not enquiries arrive.
- Share-of-the-job arrangements. You pay a cut of jobs won. Hard to audit, so ask how they will prove what you won.
Many companies mix two of these. Ask which one applies to the thing you are being offered, because the risks differ.
What to ask each
| Ask | Why it matters | A good answer |
|---|---|---|
| Is each enquiry sent to me alone? | Shared enquiries mean a race to reply and a price fight | Yes, in writing, and how they enforce it |
| What checks happen before I get it? | Unchecked leads cost you quoting time | A named list: real number, wants a quote, in my area, can do the job, decision maker |
| How is a billable lead defined? | The word “lead” can mean a form fill, a call or a click | A written definition with examples |
| What if it is not real or not in my area? | You will get some | Money back or a replacement, with a deadline you can meet |
| Who owns the ad account, page and data? | Leaving should not mean starting again | You do, or you get an export |
| Who speaks to the homeowner first? | They speak for your business | A named process, with notes or recordings you can read |
| What does stopping cost? | Lock-ins protect them, not you | Short notice, no exit fee |
Contract terms to read slowly
- Minimum term and auto-renewal. Check how you cancel and in what form.
- Price changes. Can they raise the price without your agreement?
- Minimum spend or minimum volume. Do you pay for enquiries you do not want?
- Returns. Deadline, evidence required, and who decides.
- Exit. Notice, fees, and what you keep.
In Australia, the Australian Consumer Law protects small businesses against unfair terms in standard form contracts. The ACCC says that from 9 November 2023 this covers businesses with fewer than 100 employees or under $10 million in annual turnover, and that a court can declare an unfair term void. See the ACCC’s page. In New Zealand, the Commerce Commission covers standard form small trade contracts in trading relationships worth up to $250,000 in any 12 months. See the Commerce Commission’s page. This is a pointer, not legal advice. Check your own contract.
Contact rules you stay responsible for
If a company rings or messages homeowners for you, the rules still apply to you. In Australia, the Do Not Call Register industry page says the business that commissions the calls must comply as well as the caller. See the Do Not Call Register industry page. In New Zealand, the Department of Internal Affairs says commercial messages need consent, must identify the business responsible and need a working way to unsubscribe, and that purchased lists need consent for each address. See the DIA’s three steps. Ask any company how it gets permission to contact people on your behalf.
Run a small test first
Agree a small spend or a small number of enquiries before you sign anything long. Log every enquiry, reply fast, and read or listen to a sample to check the homeowner knew they were asking for a quote. A slow reply tests you, not them, so see how fast to respond. The step-by-step version, with how long to run it, is in the agency guide linked at the top.
An email to send any provider
Copy this, fill in your details and send it before the sales call. Their written reply becomes your record.
Before we talk, I would like these answered in writing. How many businesses receive each enquiry? What do you check before it reaches me, and who does the checking? What exactly am I billed for? What happens if an enquiry is not real or not in my area, and how long do I have to raise it? Who owns the ad account, page and data? What does it cost to stop, and how much notice do you need?
A company that answers all six plainly is worth a test. One that will only answer on a call is telling you something.
Judge by cost per signed job
Cost per lead is the number sellers show you. Cost per signed job is the number that pays your wages.
The sum is: total spent, divided by jobs signed. As a made-up example, if you spend $2,000 and sign two jobs, each job cost $1,000 to win. If a cheaper source delivered ten enquiries and no jobs, it cost more. Do the same sum for every source and keep the one that wins work at a cost your margin can carry. What a lead is worth to your business has the full worksheet. Also track quotes lost because you never got hold of the homeowner. Why builder quotes go quiet explains the usual causes.
When to walk away
- They will not put the lead definition and refund terms in writing.
- They will not say how many other firms receive the same enquiry.
- They show results without saying where the numbers come from, or use another business’s name without permission.
- They promise a number of jobs or a date.
- They push you to sign today or to pay a large amount before you have seen one enquiry.
- You cannot reach a person when something goes wrong.
PreBuild runs ads, rings every enquiring homeowner, checks six things and sends each one to one business, with the terms given in writing on a call. See how it works.
Common questions
What is the best lead generation company for tradies?
There is no single best one, because the right one depends on your trade, your area and how fast you reply. Use the questions above and a small test, and keep the one with the lowest cost per signed job.
Are exclusive leads worth it?
Often, because you are not racing other firms. But exclusive means nothing unless it is written into the contract, so ask how it is enforced.
How do I know if a lead generation company is legitimate?
Look for a written definition of a lead, written refund or replacement terms, a clear exit and people you can reach. Be wary of any company that will not answer how many firms get each enquiry.
How long should I test a company before signing a long contract?
Run a short test with a small spend before any long contract. Judge it on cost per signed job, and give it longer for trades where jobs take months to sign.