Reducing a Telecom Company’s Cost per Lead by 60 Percent in One Month When resources are limited, it can be tempting to purchase the least-expensive contact list. After all, what’s the difference between a list that costs $1 per contact and one that costs $24? The researchers at MECLABS discovered it’s far more than merely $23.

1. The High Price of Low-Cost Lists
MECLABS Reduces Telecom Company’s
Cost per Lead by 60 Percent in One Month
When resources are limited, it can be tempting to purchase
the least-expensive contact list. After all, what’s the
difference between a list that costs $1 per contact and one
that costs $24? The MECLABS Leads Group discovered it’s far
more than merely $23.

2. The High Price of Low-Cost Lists
The High Price of Low-Cost Lists
MECLABS Reduces Telecom Company’s
Cost per Lead by 60 Percent in One Month
When resources are limited, it can be tempting to purchase the least-expensive contact list. After all,
what’s the difference between a list that costs $1 per contact and one that costs $24?
The MECLABS Leads Group discovered it’s far more than merely $23.
Experiment Reveals the High Price of Low-Cost Lists
Contracted by a leading telecom organization to generate leads, the MECLABS Leads Group proposed
conducting an experiment to see how they could do so more efficiently. They decided to identify which
list would generate the highest number of leads in the shortest amount of time. The goal: To give their
client the best return on their teleprospecting investment.
Experiment: Background and Design
Experiment ID: Telecom organization data test
Location: MECLABS Leads Group Research Library
Test Protocol Number: LG1001
Research Notes:
Background: A telecom organization engaged MECLABS for lead generation
Goal: To determine if higher cost/higher quality data can drive down overall cost per lead by
focusing on the most efficient list source.
Primary research question: Which campaign data source will drive the most efficient value?
Test Design: Four multi-source lists, a user-generated list, and a single-source list were tested under
consistent experiment conditions, with 300 accounts and 80 hours of teleprospecting.
Under consistent experiment conditions, MECLABS tested:
 A list provided by the telecom organization – this was used as the control. Its cost per record
was merely $1.
 Four lists purchased from brokers. These ranged from $3 to $24 per record. (Why so much for
the highest-price list? Each contact on was verified.)
 A list purchased from a community-based source, like Jigsaw.
2 Copyright © 2011 MECLABS LLC. All rights reserved.

3. The High Price of Low-Cost Lists
Segments Record Cost Validated
Multi source 1 $24.00 Phone – role-based
Multi source 2 $14.50 Phone – title-based
Multi source 3 $6.00 Phone – validated
Multi source 4 $3.00 Email - validated
User generated $1.00 Business cards
Single source $0.49 No validation
Experiment Results:
Here’s an overview of how each list performed:
Record Call Per List Cost Per List
Segments Leads Call Cost
Cost Lead Count Lead Cost
Multi source 1 $24.00 77 1000 312 $373.45 $24,000 $92,400
Multi source 2 $14.50 110 1560 312 $496.00 $22,620 $132,132
Multi source 3 $6.00 127 2475 312 $536.58 $14,850 $152,460
Multi source 4 $3.00 135 2810 312 $546.75 $8,430 $162,278
User generated $1.00 240 9350 312 $954.00 $9,350 $287,980
Single source $0.49 210 13100 312 $828.95 $6,380 $252,175
Teleprospecting professionals had to call 240 contacts to attain a single qualified lead from the list
provided from the telecom company. For every 11 calls they made, a lead had to be disqualified – the
contact or his organization was simply not within their target market. Furthermore, it turned out 67
percent of the contacts on their list were no longer with the company!
In contrast, only one percent of the contacts on the most expensive list were no longer with the
company. Telesprospectors only had to make 77 calls to attain a qualified lead. How often did they have
to disqualify a lead? Only once every 90 calls.
3 Copyright © 2011 MECLABS LLC. All rights reserved.

4. The High Price of Low-Cost Lists
60.85 % Decrease in Overall Campaign Costs
The $24/record list requires 60.85% less investment than the $1/record list
Segments Record Cost Cost per Lead List Cost Call Cost Total Cost
Multi 1 $24 $373 $24,000 $92,400 $116,400
User-gen $1 $954 $9,350 $287,980 $297,330
Difference ($14,650) $195,580 $180,930
What you need to understand: The “best deal,” a list that cost $1 per record, would
have resulted in a campaign that was more than 2.5 times more costly than a campaign
using the “most-expensive” list.
The test proved that a list that looks like a deal at the outset will cost you dearly in the long run:
 Cheaper lists have a higher number of inaccuracies. What are you paying for if nearly 70 percent
of the list is worthless?
 It takes significantly more time to produce an opportunity. In the case of the telecom company,
the cheaper list would have required nearly three times the hourly investment of the most
expensive list to produce a single lead.
Here’s how this plays out in the numbers:
 When you add in both the cost of the list and human resources, the cost-per-lead from the
most expensive list was $373.
 The cost per lead from the least expensive list was $950.
 Overall campaign costs would have been $92,000 with the “most expensive” list versus
$297,000 for the “least expensive.”
4 Copyright © 2011 MECLABS LLC. All rights reserved.

5. The High Price of Low-Cost Lists
Overall Campaign Costs
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Multi 1 Multi 2 Multi 3 Multi 4 User-gen Single
The MECLABS approach revealed an important lesson: Cheap lists cause campaign costs to skyrocket
when you add in the time spent by your team to eliminate bad data and finally reach a viable lead.
In this case, a teleprospecting campaign executed by the cheap list would have cost 2.5 times more
than that of the most expensive.
Return on investment is predicated on how much revenue you can drive in the least amount of time.
That’s why MECLABS conducts experiments like this to conclusively prove efficiency. We optimize
your revenue streams to ensure every penny, and every minute, of your investment is well spent.
5 Copyright © 2011 MECLABS LLC. All rights reserved.

6. The High Price of Low-Cost Lists
Optimize your Sales and Marketing Funnel
MECLABS is a science lab (primary research) with a consultancy (applied research). We conduct rigorous
experiments in the new science of optimization and we apply our discoveries to help leaders optimize
the financial performance of their sales and marketing programs.
MECLABS has partnered with organizations ranging from Fortune 50 companies to emerging businesses
to drive breakthrough financial gains and provide sales and marketing enablement. Current and past
Research Partners include:
Learn more about Research Partnership opportunities:
MECLABS.com/engage
1-877-635-0565
6 Copyright © 2011 MECLABS LLC. All rights reserved.