Starting a lead generation company without a lead generation agreement is a big NO.
It is vital to set up an agreement that will serve both parties–provider and client–when it comes to lead generation.
It’s not always rainbows and butterflies when working on lead generation–results will not always be good. This is why an agreement has to be made between you and your client.
It’s a bit complicated, so let’s get to it.
What is a Lead Generation Agreement?
A lead generation agreement is a contract that contains all relative and important information about the transaction.
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A lead generation contract is between a provider and a buying company or client.
It is giving the assurance that the provider gets paid with the information they provide, which are sold on a per lead basis, regardless of the conversion rate of the leads purchased by the company.
What is the Importance of a Lead Generation Agreement?
With any business, you will encounter challenges with clients and companies. It is perfectly normal because you have different views and opinions.
The primary objective here is to limit those restraints and make the workflow much easier and more importantly, fair.
Working with different clients, you’ll see a huge difference between the client’s expectation and the amount of work you’ll be providing.
To avoid any misunderstanding, the company and client must set an agreement approved by both parties.
Before moving forward, a contract needs to be established.
To avoid any payment issues, the provider will create a lead generation commission agreement.
In case of unexpected problems or issues, the lead provider must have packages and ready to sell solutions.
For this purpose, both parties will sign a lead generation contract of agreement to ensure payment is delivered regardless of the company’s ability to convert the purchased leads.
There will be situations where the company will deny payment if the leads are not converting.
To prevent this from happening, the client has to sign a non-solicit agreement with lead providers.
It can be mentioned in a clause or, for more assertion, in the contract itself.
What is Included in a Lead Generation Agreement?
What makes a lead generation agreement will depend on the services the agency will provide and of course the terms and conditions by both parties.
There is no specific template or structure that a contract must follow but it may include but are not limited to the following:
- Details of both parties
- Duration of the contract
- Expressed and implied terms
- Definition of key terms used
- Services, goods, and deliverables to be provided by the agency
- Payment details including interest for late payments if applicable
- Renegotiation options
- Dispute resolution
- Termination conditions
It should include everything needed for the provider and the company to have a smooth transaction.
While this information will provide safety and quality assurance, it may be too overwhelming for a client.
To avoid this, the provider must determine a type of measurement for their lead generation agreement/contract.
1Duration of Service
This pertains to the amount of time that the agency dedicates to providing services needed by the client.
Duration is something like a yearly lead supply, monthly or weekly.
It will depend on how many the company needs.
2Low Conversion Rate
When it comes to leads, clients have high expectations of conversion.
However, there is no assurance that all the leads they provide will convert.
To avoid this, the agency must provide a clear number or percentage of the conversion rate of their list of leads.
The provider must not give out any promises or assurance that all their leads will convert as this will question their credibility if it doesn’t happen.
The agency will keep track of the quality of their leads and provide technical support to ensure high-quality standards. The quality of leads can be measured by one or more of the following:
- Number of generated leads
- Number of lead conversions
- Revenue from converted leads
- Total profit from the generated leads only
- Total sales from the start of contract
Again, there is no guarantee that all of the leads generated by the agency can be converted by the company.
It is to measure any security breach in situations where data protection is essential.
Software, tools, and any precautionary measures to be used must be included in the contract.
What to Consider in Creating a Lead Generation Agreement
The main objective here is to incorporate the client requirements and the agency service performance.
Mention the Right Standards that Drives the Client to Sign
When creating the contract, the agency should mention the requirements needed from clients asking for their services.
Keep in mind what the majority of lead generation services seekers want. Look for ways on how to spark their interest in the contract. Give assurance that you will deliver what is needed.
Try to meet the client halfway and decide on what’s good and fair for both parties.
Include Every Possible Outcome
Make sure that both parties know what to expect in situations where one chooses to violate any of the conditions. Penalties are important in the terms and conditions of any lead generation agreement as these will set the limit of each party’s actions.
Let’s say the client fails to pay on time. Let them know that there will be an interest to be applied. Same for the agency. If they don’t deliver on time, there will be a penalty as well.
Another thing is having outcomes that are different from what’s expected.
Keep in mind that there may be external factors that can affect the end results. So, make sure to discuss these factors with the client.
Include All Services to be Provided
Again, include services, tools, and deliverables that the agency will be providing as per client request.
With that said, make sure that the agency does indeed do all of the services included in the contract.
Sections of a Lead Generation Agreement
The most common parts included in a lead generation contract would be the basis for creating a successful agreement.
Those parts will outline the client’s goals and the lead generation agency’s efforts.
1) Summary of Agreement
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This first section will include a brief summary of the lead generation agreement.
It will also include the services the company will provide to its client, and the agreed payment for the services to be provided.
The standards and parties signing the contract are also a part of the summary to guarantee the agreement.
2) Objectives and Expectations
Like any other business transaction, the client has certain goals and expectations.
In this case, the company accepting the client’s requests should mention this in the contract as well.
Both parties will include their objectives and end-goals for the duration of the contract.
Again, these goals and objectives must be realistic and attainable.
3) Requirements and Obligations
In case the company needs certain requirements from the client, it should be mentioned here.
It should also include the roles and responsibilities of each party.
4) Other Parties
In a situation where a third party is involved, it should be mentioned in the agreement as well.
The third party will need to comply as well. There is a chance that the client is not the only party. He or she might partner with a different person for reporting, consulting, or technical support.
If in any case where the lead generation company is in direct contact with the third party, it should be mentioned in the contract as well.
This is to avoid any problems like “it wasn’t our fault”, “we didn’t get any service” or any statement that may harm the business and the transaction.
Since the lead generation agreement is for the protection of each party, failure to comply with each side will result in a penalty as a means of protection of the receiving end.
When a lead generation agency cannot provide the services mentioned in the contract then there will be consequences.
It is also the same for the client. If they don’t respect the conditions, fail to pay on time or don’t pay at all, then they will have penalties.
These penalties may differ from one agency to another.
- Compensation in the form of more leads, discounts, etc.
This will establish trust and guarantee that both parties meet their obligations.
6) Terms and Conditions
This will have all the clauses that if not respected will terminate the contract.
This part of the contract will set the rules and conditions that must be followed by both parties. Failure to comply will result to contract termination, indemnity, and penalties.
For example, the agreed period of payment is two months but the client fails to pay on time. What the agency can do about this is termination of contract or an applied interest.
These conditions are not only for the client, but also for the company.
They can include the client’s fears or the majority of complications in the lead generation business.
Like goals end up being unmet for a long period of time, or there was a breach of security in the client’s base.
These can also be grounds to terminate a contract.
Lead Generation Agreement Template Providers
We mentioned that there are no specific formats or structures of an agreement, but of course, it’s still possible to use a template to make things easier.
Example of a Lead Generation Agreement
LEAD GENERATION AGREEMENT
This Lead Generation Agreement established and applicable from the MM/DD/YYYY to MM/DD/YYYY.
Signed between ABC Company (Lead Generation agency), DEF corporation (Ecommerce in Fashion), and GHI Ltd. (Third party).
- ABC Company has expertise in lead generation, marketing, website development and design, optimization of product or service and technical support. It is an independent lead generation agency providing solutions for small B2C businesses.
- DEF Corporation provides its customers with Fashion products, displayed on their website and other platforms. Wants technological solutions to generate more leads and tools for website optimization.
- GHI Limited gives consultation and audit services for DEF Corporation to enhance its performance. Considering the mutual understanding the parties hereby agree to the following:
Lead generation agency services.
- Will, in the agreed upon times and manner, provide the parties with: Full names, email addresses, and social media profiles of the Fashion products’ potential clients.
- Respect of the parties’ conditions for qualified leads, such as the demographics agreed upon.
- Provide the agreed upon list of leads. The information regarding each lead should be sufficient and available. This will allow the second party to easily reach the lead.
- Restrain from illegally extracting the lead information. The list must not contain the lead’s: Address, State, Social security number, Tax identification number, credit card information or any private information.
- Report to the third party the progress of obtaining verified leads. Providing both second parties the created list each month.
Second and third parties’ obligations
- Verify the list of leads once they receive them. After a period of 15 days, they are all considered as verified.
- Notify reception after getting the report and list of leads.
- Determine the second party as the one to communicate any feedback, complaint or verification.
- Contact the list of leads for the purpose listed in the agreement and not for any other purpose not mentioned.
ABC agency’s obligations
- Shall not in any condition contact the lead on behalf of DEF corporation.
- Any additional information about the lead should not be included in the list
- Avoid Negotiation, offers, representation or anything that relates the Agency to DEF corporation to the lead.
Concerning the lead
ABC Agency is not required to present leads with:
- Accurate contact information
- Readiness to purchase
- Registered or subscribed to the corporation
- A pre-set number
- Real identity
Both Company and the Consultant agree that the lead generation agency will act as an independent contractor under this Agreement. Nothing contained in this Agreement will imply that the agency, or any employee, or agent is a partner, agent or employee of DEF Corporation or GHI Ltd.
- Information about: Leads, process, technologies, inventions, pricing, finances, employees, private documents, services provided, terms of this contract, business development, client base…
- Not included: Public information that is already known and shared by parties or through other recipients.
- During the Term and consistently from that point, neither one of the parties will uncover Confidential Information of the other party. Or even utilize such Confidential Information for any reason other than in encouragement of this Agreement.
Without restricting the previous sentence, each party will use at any rate a similar level of attention in shielding the other party’s Confidential Information.
- Once the contract is terminated, all information related to each party should be returned, destroyed and not in any way exploited.
- During the contract period parties are not allowed to exploit, steel, hire, or solicit any of their employees.
The compensation, for a list of 1 000 leads, verified and determined by all parties are included in the document attached to the contract and signed by the concerned parties.
- The commission is paid 4 working days upon receiving the list
- In case of termination payment should be available to the agency
- The DEF corporation and GHI Ltd are not obliged to pay for faulty leads
The agreement starting MM/DD/YYYY and ending MM/DD/YYYY will be automatically renewed. Unless there is a 30 days’ notice.
- If the contract termination has no reason then the party wishing to terminate it must give 30 days’ notice
- If there is a reason for the termination then a 10 days’ notice is communicated
The reasons deemed to be the cause of termination can be:
- More than 20% of leads are faulty
- No payment was made for a total 2 000 Leads
- All parties are in disagreement and mutually decide to terminate the lead generation agreement
- Confidentiality or security breach
Neither the lead generation agency nor the other parties are responsible for any important, exceptional, coincidental Harms. Including loss of benefit, Income, or business opportunity.
This Lead generation agreement is signed by the parties below:
Lead generation agreement should be custom-made according to each client and agency. It must contain the agreed-upon conditions, services, and payment.
It is also essential to consult an expert or hire a lawyer to help create these types of contracts.
Even though writing a lead generation agreement seems easy, only a slight deviation of the agreement may result in termination.
No matter how overwhelming a contract may be, it is of great importance nonetheless.
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