Pay-per-appointment vs. fee-for-service: What to choose?
Jeffrey, currently a content writer at Kalyna Marketing agency, is a digital content marketer for B2B technology startups and marketing agencies.
Co-founder of Belkins, serial entrepreneur, and investor with a decade of experience in B2B Sales and Marketing.
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Choosing an outsourced appointment setting provider means committing to a long-term partnership. To establish reasonable expectations, you need to answer these 2 questions:
1. What is the pricing model itself really selling?
For example, the pricing page might promise you X amount of leads over a given period with no upfront cost. However, this structure’s appeal lies in risk mitigation and cost saving, not a focus on results such as increased revenue.
2. What does the pricing model incentivize?
“Qualified leads” can mean just about anything. If you’re paying for each and every poorly defined lead, expect a high volume of low-converting appointments and a very unhappy sales team.
Ultimately, the depth and quality of the deliverables received are based on the resources invested.
If you’re ready to pull back the curtain on appointment setting pricing models, keep reading. By the end of this article, you’ll have a clear view of what the different pricing models are, what they offer, and how they align with your company’s future.
When dealing with appointment-setting pricing models, it’s easy to overlook factors that can significantly impact your bottom line.
Traditional models like pay-per-hour or pay-per-appointment are well-known, yet they often fail to align the interests of the service provider and the client. Newer models like pay-for-performance attempt to tie the provider’s payment directly to the results. So how can you understand their implications on your business and the results those services could deliver? By understanding the intricacies of these pricing models and the incentives that they create.
Pricing models typically fall into 2 well-known categories:
Fee-for-service: Transactional, providers are compensated per service rendered. These can be split into 3 sub-types:
Pay-for-performance: Deliverables-focused, providers are rewarded based on predefined metrics like leads and appointments. These can also be split into 3 sub-types:
Because this model is more focused on the overall service rather than a particular deliverable, it can take a more nuanced approach than pay-for-performance.
For example, companies like Sekisui Chemical, whose industrial client base resides outside their home country, have great difficulty at acquiring a single client. Their outreach approach must start with a deep understanding of their prospect’s business, people, and culture.
As with Sekisui, when the target prospective client is high-value, in preciously short supply, and takes a long time to close, fee-for-service offers more utility than a simple pay-for-appointment plan can.
So what can the fee-for-service model look like in practice?
Retainer pricing model
B2B appointment setting retainer pricing refers to a model where clients pay a fixed monthly fee to retain services. Clients typically receive a comprehensive package of B2B appointment-setting services that include the following:
Qualified appointment scheduling
Outsourcing these tasks allows companies to focus on core operations while generating a steady stream of qualified leads.
In terms of the actual pricing, at Belkins we offer a transparent pricing structure tailored to each client’s specific needs. While we can’t speak for other providers offering a retainer model, here’s a breakdown of our process, how we allocate resources, and what you could expect in terms of results.
With our retainer model you’ll have 5 dedicated professionals, all specialized in a different stage of the appointment setting process. These include:
Lead generation and research specialist
Email deliverability specialist
Each member is part of the Belkins team. We do not outsource SDRs from external providers for multiple reasons, including having direct oversight and cost savings.
We use a retainer pricing model because it allows us, more than any other, to stay focused on delivering results to our clients.
By working with a limited set of funds, we’re incentivized to become very efficient at spending money on factors such as the number of domains, mailboxes, licenses, and emails sent, resulting in more targeted work.
For instance, Google recently increased email requirements to bypass spam filters. This development is set to have a massive impact on the outbound lead generation industry.
As email deliverability (landing in the prospect’s inbox) requires more sophistication, so will the increased investment of resources.
However, implementing this model requires establishing strong relationships with line managers and understanding their key performance indicators (KPIs). By aligning with their goals, we can ensure maximum effectiveness and client satisfaction.
The structured buying process of mid-size companies, coupled with their allocated budgets for growth, makes the retainer pricing model highly advantageous. It enables scalable and predictable revenue generation while fostering deeper client relationships and opening doors to potential up-selling opportunities.
Retainer pricing costs
On average, the starting price for a basic retainer agreement tends to hover around $2,000 per month.
For more comprehensive services, including strategic planning, extensive research, continuous testing, and execution of sophisticated email campaigns, the pricing could range from $5,000 to $10,000 per month.
Remember, aligning the services to your actual revenue goals is the key to getting the most out of your investment.
Project-based pricing model
B2B project-based appointment-setting pricing is used to set appointments with potential clients in a project-based manner. Companies define the project scope and offer services to connect clients with qualified leads.
Several factors are at play within this model, such as:
Number of required appointments
Level of customization needed
Package cost ranges from basic options to comprehensive tailored solutions.
One of the main advantages of this model is its targeted approach. Appointments are set with more qualified and interested clients. Moreover, the project-based approach provides flexibility, allowing companies to scale their appointment-setting efforts based on demand and available resources.
However, there are a few drawbacks to keep in mind.
For example, in the enterprise segment, navigating longer sales cycles and complex compliance requirements is crucial. Companies need to invest additional time and effort in building strong personal relationships with key contacts.
In this regard, project-based pricing lacks the patience and strategic approach needed to gradually build relationships with enterprise clients.
Project-based pricing costs
The average pricing for project-based appointment-setting can vary widely, largely dependent on the aforementioned factors.
For projects of lower complexity, with fewer appointments and minimal customization, pricing can start from around $1,500 to $3,000.
However, as the scope and complexity increase, so does the price.
For larger-scale projects with a high level of customization and a greater number of required appointments, prices may range from $5,000 to $15,000 or more.
Keep in mind that these figures are general estimates. The actual cost fluctuates based on unique project requirements and market conditions.
Always seek a detailed quote from your service provider to understand the full picture.
Hourly rate model
B2B hourly rate appointment setting entails scheduling appointments with potential clients on an hourly basis.
Hourly rate appointment setting offers the most basic form of fee-for-service model. It involves typical lead generation services such as:
Cold calling & email
Scheduling appointments for sales representatives
Rates vary based on factors such as the complexity of the target market, the number of appointments required, and the level of expertise needed. Generally, prices are presented as a flat $X per hour.
Companies choose hourly appointment setting for its seemingly straightforward approach to pricing and the potential to save on resources.
This affordability and flexibility hold great appeal for small businesses. In addition, competitive pricing offers mixed with maintaining cost-effective operations lend to a diverse client base.
However, with limited control over the process, alignment challenges can arise between the outsourced team and the company’s brand in terms of messaging.
Opting for an hourly rate appointment setting model can provide a steady high volume of clients, but can result in managing numerous small accounts. Finding a balance between an acceptable level of operational challenges while maximizing profit margins is key.
Hourly rate costs
Typically, the hourly rate for appointment-setting services depends on the market, the complexity of the task, and the level of expertise required.
For a general idea, expect rates to start at around $25 per hour on the lower end for basic services.
Specialized industries requiring a high level of expertise could reach $60 per hour or more.
Pay-for-performance pricing models
Pay-for-performance is a pricing model where agencies are compensated based on outcomes achieved rather than charging a fixed fee upfront. These outcomes can be measured in various ways, such as securing appointments, generating qualified leads, or closing deals.
Belkins’ co-founder, Michael Maximoff, makes an important point that can be found in this LinkedIn post. Paraphrasing, he states the following: Folderly suggests that a Google mailbox should ideally send up to 200 emails daily, with the average between 100 and 150.
An SDR typically manages up to 5 mailboxes, allowing them to handle around 750 emails per day, which can yield about 250 leads. Over a month, excluding weekends, an SDR could potentially handle up to 5,000 leads. A team of 6 SDRs could reach 5,000 daily emails, potentially producing 30,000 leads (way too many).
Less than 5% of companies operate at such a level, as these volumes are often associated with spamming rather than strategic outreach. Most SDR teams handle 500 to 1,000 new leads monthly with just 2 mailboxes. Outreach presents a 0.3% complaint rate benchmark, indicating that surpassing this threshold could result in messages being blocked.
This suggests that it’s more important to focus on maintaining a low complaint rate than reaching a high email limit.
Michael’s point attempts to pull back the curtain on the reality of “leads” generated. Performance, then, can more accurately be associated with deliverables, not conversions, and not revenue. While pay-for-performance models may align with your specific business needs, it’s important to acknowledge that this model’s appeal lies in its risk and cost-saving functionality.
Providers offering pay-for-performance pricing are delivering value by keeping the operational costs on the agency side.
In an ideal world, businesses would only pay when tangible results are achieved. However, securing this concept in reality comes with challenges:
Despite providing promising leads, there is no guarantee that all deals will successfully close.
Agencies have to cover the costs of teams, tools, and investments required to deliver results, necessitating liquidity and financial planning.
Inherent uncertainty in the business, like pandemics or geopolitical unrest, can disrupt close rates, even when the agency’s end of the work is fulfilled.
While pay-for-performance models incentivize agencies to deliver results, they can also come with unforeseen risks that need to be identified and carefully managed.
B2B pay-per-lead appointment setting is a model where companies pay based on the number of leads generated. Its results hinge upon the client or agency’s definition of a lead, the most typical being a prospective customer who’s shown some level of interest.
Once the lead definition is established, providers focus exclusively on generating volume on behalf of the client.
The cost of pay-per-lead appointment setting varies based on factors such as:
Complexity of the target market
Level of customization required
Volume of leads needed
Prices can range from a few dollars to a couple hundred per lead, appealing to a wide range of organization sizes.
Companies choose to outsource to pay-per-lead providers, primarily, in an attempt to align costs with measurable outcomes. However, pay-per-lead pricing model providers often employ mass mailings and offshore resources which come with a host of limitations like lack of personalization and depth of lead engagement.
The price for pay-per-lead appointment setting is quite broad. This is due to the variability of the marketplace and the complexity of the services required.
On average, expect to pay anything from $20 to $200 per lead.
The lower end of the spectrum usually entails basic lead generation with minimal customization. However, as the degree of personalization and market complexity increases, so does the cost.
Businesses targeting high-level executives in niche industries may find themselves at the higher end of this price range.
B2B pay-per-qualified-lead appointment setting offers an additional layer of definition to what constitutes an acceptable lead. Therefore, this model is an attempt to remedy the issues inherent in the pay-per-lead approach.
It works by the service provider employing various strategies, such as:
These efforts seek to engage with prospects and qualify them based on predefined criteria. Once a lead meets the qualification standards, they’re delivered as is to client-side sales representatives.
Costs can vary depending on industry, target audience, and geographic location. It’s typically structured on a per-lead basis, with prices reaching several hundred dollars per qualified lead.
The exact cost depends on the complexity of the sales process and the level of qualification required.
At first glance, pay-per-qualified-lead poses as an amazing offer. The agency handles everything while simply delivering cost-effective and promising leads to fill your sales team’s calendars.
It can seem too good to be true; impressive results without the need for any upfront investment. But like with the simpler pay-per-lead model, certain essential measures are under-performed or entirely overlooked, namely:
Identifying and targeting the ideal client profile (ICP)
While this model still offers a high degree of flexibility and may overcome some of the objections to a more basic pay-per-lead approach, it also suggests the possibility of taking the pay-for-performance pricing model a step further.
Pay-per-qualified-lead appointment-setting services typically start from around $50 per lead on the lower end.
Prices reach up to several hundred dollars, even exceeding $1,000 per lead for complex, high-ticket B2B industries.
Naturally, these prices can fluctuate depending on various factors such as the industry, target audience, geographic location, complexity of the sales process, and the level of qualification required.
This model allows organizations to define appointment criteria, such as specific industries or target audiences. The outsourced provider then matches these criteria with potential leads, setting up appointments accordingly.
Companies opt for pay-per-appointment to only pay for tangible results, save time and resources, and focus on their core competencies while still attracting potential clients.
Some platforms charge a fixed fee for each confirmed appointment, while others work on a commission basis, taking a percentage of the value from successful deals resulting from the appointments. The exact cost varies depending on the platform and services offered.
However, to continue the conversation on the LinkedIn post shared above, Charlie Riley, a professional specializing in generating revenue adds this:
In response, Michael gives his analysis of the pay-per-appointment model through a series of shared observations:
Illusion of zero upfront risk
Prioritization of volume over qualification and solution provision
Higher churn rates
Incentivizing sales teams to over-promise
Lack of strategic depth
Wide outreach lacking nuance
Hasty onboarding process
Reduced collaboration resulting in superficial ICPs and value propositions
Like with all pay-for-performance pricing models, long sales cycles, complex products & services, high-value contracts, and reputation building all pose substantial roadblocks. For that reason, we urge you to look for platforms with a solid network of qualified leads and a transparent pricing structure.
Again, the cost for outsourced B2B appointment-setting services can vary considerably based on the complexity of the task, the qualification of leads, and the reputation of the provider.
On average, the cost per appointment ranges from as low as $50 to as high as $500.
A more comprehensive service, which includes lead generation, qualification, and appointment setting, could start from around $1,000 a month and reach up to $10,000 a month.
The pricing largely depends on the intricacy of the sales process, the industry, and the costs being shouldered by the appointment-setting provider.
When choosing an outsourced appointment-setting provider, select a pricing model that aligns with your company type, industry, and business needs.
For example, industries like software development, marketing, and healthcare encompass startups, SMBs, and enterprise companies. They’re also highly competitive industries that demand a more focused approach to outreach.
What pricing model allows for that? Which has been built in a way that accommodates your industry, company size, and budget? Because each situation is complex, the effectiveness of a pricing model hinges on resource allocation and how it shares risks with your company.
Here are a few pricing models that have evolved to meet such project complexity as well as market competition:
For startups and SMBs, flat-rate models can range from $25 to $50 per hour.
Fee-for-service models, commonly used by enterprisesin industries such as technology and consulting, charge a fixed monthly rate for a specific scope of work.
Pay-per-appointment models, commonly found in healthcare and professional services sectors, typically range from $25 to $100 per appointment set.
In terms of risk sharing, your clients’ compensation structure should influence your choice.
If your clients are used to project-based payments or longer intervals, you might choose a similar payment structure for appointment-setting services. Conversely, if your clients are accustomed to monthly payments, choosing a yearly pricing model could pose a higher risk.
Not all appointment-setting models are suitable for every business, especially if the provider relies heavily on specific tools or outsourced services that don’t integrate with your current operations.
You may find a pay-for-performance model that makes sense for your goals. However, if your desired contracts reside in the hard-to-reach C-suite, what can you really expect from a pay-per-appointment or basic hourly billing model? Higher-value clients require high-end agencies that typically operate only on retainers.
AI and automation are double-edged swords when considering the optimal appointment-setting pricing model. The key is to understand how they are being leveraged by the provider in question.
At Belkins, our lead generation experts process and validate AI-generated content as a means to save time and resources. We do not attempt to replace human operators but rather use AI to support and empower them.
In skilled hands, AI tools can accomplish tasks like research to provide the same value proposition to our clients, but with increased productivity.
While AI and automation are incredible tools, we can’t overstate the significance of personal relationships and collaboration in constructing successful marketing strategies.
We plan to stay true to our human-focused approach, rather than becoming an AI and automation solution for lead generation. By doing so, we can deliver tangible and impactful results to our clients while nurturing strong and meaningful partnerships.
Ready to get started?
Here are several options and free resources that will help you get started on your outbound sales journey:
Hire Belkins: If you want to discuss your current business goals and how we can potentially help you achieve them, contact us.
Belkins’ case studies: Gain insights on how we’ve generated 4,760,850 leads and millions of dollars for businesses of all sizes. Read their stories.
Belkins Growth Podcast: Get to know our VP of sales, Brian Hicks and Belkins co-founder Michael Maximoff as they interview professionals on market challenges, effective sales practices, and business perspectives in various industries. Listen to the Belkins Growth Podcast.
Jeffrey, currently a content writer at Kalyna Marketing agency, is a digital content marketer for B2B technology startups and marketing agencies. His background is in hard-close sales, teaching English, and creative writing. He's worked with B2B marketing agencies, SaaS, DevOps, Martech, and cybersecurity companies. Jeffrey was raised in and is currently based out of Houston, Texas.
Co-founder and Managing Partner at Belkins
Michael is the Co-founder of Belkins, serial entrepreneur, and investor. With a decade of experience in B2B Sales and Marketing, he has a passion for building world-class teams and implementing efficient processes to drive the success of his ventures and clients.