The hidden costs associated with dirty leads, dirty demand generation, low quality leads (LQL), and non-compliant, non-consenting B2B lead gen campaigns.
Dirty Leads, otherwise known as LQL leads (“low quality leads”), are inferior quality – and sometimes outright fake – sales leads that can cause a whole host of issues for B2B organizations (yours included).
What is dirty demand generation?
Generally speaking, dirty leads (LQLs) are leads that are generated very hastily – and very cheaply – typically via international call centers and B2B lead gen mills.
More often than not, the telemarketing agents at these call centers have been trained in a very limited capacity, and their understanding of any B2B sales cycle – let alone your company’s sales cycle – is basic at best. Most of the agents don’t last long, and turnover rates are generally quite high.
But being international – and not based in the USA – can of course have its perks… And in the case of companies guilty of dirty lead generation, those perks are numerous. These companies are not held to the same data processing and data privacy regulations that companies in the USA and European Union are, and as such, the door is left wide open for plethora of issues and liability concerns.
Can dirty leads cause problems for my company?
In short, yes, they can absolutely cause problems – and they do. Dirty leads can lead to data compliance violations, data privacy breaches, and hefty fines for companies that are based in the USA and EU… Even when they are not the companies that originally generated the leads.
A good portion of the time, international call centers and overseas lead gen mills are not compliant with data processing regulations, are not legally or properly obtaining consent, are not respecting data privacy laws, and in some situations, are not even generating real leads. To answer your next question – yes, you might be buying fake leads.
Non-Compliant Leads
For one thing, many international call centers (and companies in general) are not held to the same data privacy standards that we are held to in the United States and EU. In other words, the companies generating your leads are generally not GDPR, CCPA, TCPA or CASL compliant… Though they might claim to be.
Non-Consenting Leads
Non-compliance, as bad as it is, can lead to even more significant issues. Issues arising from consent and your ability to contact the lead in question. True consent equates to consent that is freely given by the data subject, and, that is granular and “unbundled” in nature… The kind of consent that you need when you are reaching out to a lead for the first time.
Low Quality Leads (LQL’s)
Did they ever know that they were registering for your white paper or webinar? Did they actually respond to any of those custom questions? Or is it more likely that they were pulled from an aging intent database? You have probably seen this one before… The lead that no longer holds the same job title – or even works at the same company – and who has no idea what you are referring to when you reach out to discuss your white paper, webinar and products/solutions.
But how can this be when the lead supposedly had a “purchase timeframe” within 6-months (or less)? It’s because the lead was never actually BANT qualified, and rather, was exported from an aging intent database. So, did the lead really have an initiative to research or potentially buy your product or solution? Possibly. But more possibly, a long time ago when they were marked with an intent tag…
But does intent from 2019 or 2020 mean that a company is still interested in 2022? Probably not. It’s more likely that the company has already made a purchase – or even just decided to do an internal build-out. Look at it from a consumer perspective:
You had intent to buy car insurance in May of 2020. You were immediately marked as a hot lead… Somebody in the market for auto insurance – and maybe even a new car, by proxy. Now that it’s Spring 2022, do you still need that car insurance?
Now admittedly, the B2C sales cycle is a much shorter process… So let’s look at it from a B2B perspective:
Your company had intent to buy an integrated talent management solution in May of 2020. They were marked in an intent data repository as a company ready to go remote… Now, is it likely that your company still needs an integrated talent management solution? Or, is it more probable that they’ve gotten that figured out over the last two years? If you researched neo4j use cases in 2021, are you still interested in graphdb use cases today?
This is another drawback of LQL low quality leads… They often leverage an ever aging database of “intent data” that is rarely cleansed of pre-existing, aging records – that can often go back years. Rather than truly asking a custom question or BANT qualifier, they back fill the data based on irrelevant intent data from years past.
Fake Leads
Yes, it can be just that simple. Their contact information might be valid (email address, phone number, etc.) – and it almost certainly will be! But did they ever really register for that white paper? Do they even know about your brand, your company, or the solutions that you were promoting via your campaign assets, webinars or white papers? Sadly, sometimes the answer is a resounding “no.”
Many of the dirty leads generated by overseas call centers – especially the ones with the impossibly low CPLs – are simply not real leads. Rather, they are generally referred to as “data dumps,” and are basically lists of B2B contacts that are pulled together based on your targeting criteria. Folks that fit the bill for job title, company size, and industry… no doubt from companies on your TAL and ABM lists. But alas, leads that were never actually leads. Leads that are simply contacts pulled from a database.
How can buying dirty leads negatively impact me?
Huge Fines
Dirty leads are almost always non-compliant… And non-compliance with data and privacy regulations – such as the California Consumer Protection Act (CCPA) – can lead to some pretty hefty fines. For example, non-compliance with the General Data Protection Regulation (GDPR) can lead to fines of up to $20 million or 4% of your company’s total annual revenue (whichever number is larger) per incident. Fines for non-compliance vary by country and regulation, but here are a few recent examples:
- Amazon: Amazon’s GDPR fine, announced in the company’s July 2021 earnings report, equated to approximately $877 million USD. This was because the company had not obtained “freely given”, informed, and unambiguous opt-in consent.
- Google: The French data protection authority (the CNIL) hit Google with this substantial fine earlier this year (January 6, 2022) – totaling $68 million USD. The language that they used for users accepting versus rejecting consent was deemed confusing. In other words, consent must be “freely given” and equally easy to accept or refuse.
- WhatsApp: Per the New York Times, On September 2, 2021, Facebook’s WhatsApp messaging service was fined nearly $270 million for not being transparent about how it uses the data collected from people on its service.
Legal Liabilities
The liabilities associated with data privacy are numerous to say the least. According to the Global Legal Group (ICLG), companies that ignore data privacy and the associated risks are doing so at their own peril.
- SEC liability for privacy risks.
- Civil liabilities for company officers and directors.
- Direct liability for state data security and privacy statutes, with special emphasis on California.
- Global civil and regulatory liability, with a focus on New York (NYDFS) and European Union (GDPR) data regulations.
Hidden Costs
According to Soma Metrics, “the hidden costs associated with LQLs come from wasting time, resources, and human capital. On average, bad lead prospect data costs sales departments 550 hours and $32,000 per representative. Assuming the average cost of $60,000 per year for a sales representative, not including additional payroll-related expenses, this means individuals are spending over 50% of their time and payroll working with low-interest customers—for SMEs, this number can often be higher at 85%… Each bad lead can also cost as much as $100 per record. For instance, the cost of 5,000 bad leads is about $500,000. These numbers can add up very quickly.”
How can my company avoid dirty demand gen?
The next time you run a demand generation campaign, ask yourself these questions:
- Are your leads being generated by low cost, non-compliant call centers and lead generation mills?
- Are the companies generating your leads based in the USA or EU, where compliance is mandatory?
- Actually, do you even know how or where your leads are being generated?
- Have the leads given unconditional, granular level consent to being contacted by your company?
With the current state of data privacy – and the plethora of compliance regulations – these are all very important questions to be asking yourself.
Knowledge Hub Media is a transparent, 100% USA based digital marketing agency that you can always count on for high quality demand generation, granular level consent, and full data compliance. If you’d like to learn more about our process – and the importance of valid, freely given, and unbundled consent – please be sure to reach out or request a quote. And if you’re looking for proprietary intent data… B2B intent data that’s constantly being checked and updated across multiple channels, look no further than our home grown intent data solution.
