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What does a lead generation company do, and should you pay per lead?

Ascent Vision · Published October 24, 2026

A lead generation company finds people who want a service and passes their details, or their calls, to businesses that provide it, usually for a fee per lead. Paying per lead can work when the leads fit your work, are not sold to several competitors at once, and turn into jobs. Before you sign, ask who else gets each lead, what counts as a billable lead, and whether the customer ends up dealing with you or with the seller.

What a lead seller does

Most lead sellers attract people who need a service, through their own websites, ads or phone lines, collect a name, a number and a few job details, and send them on to one or more businesses. Some send a form; some forward a live call. Usually you pay for each lead, or for a set number a month, rather than for the marketing that found it.

Marketplaces such as Angi and Thumbtack are one kind; the related answer on buying leads from lead sites covers how they charge. Other sellers can work under a name the customer never sees, so the customer may not know who passed on their details.

Exclusive or shared

An exclusive lead goes only to you; a shared lead goes to several businesses, often within minutes of each other, so the first useful reply usually wins, as the related answer on buying leads from lead sites explains. Ask which kind you are buying, and whether a lead sold as exclusive is ever sold again later.

Questions to ask before you pay

• Who else receives each lead, and is it ever sold again later?
• How did the person find the seller, and did they ask to be contacted by a business like yours? Call or text a lead only with the person's consent.
• What counts as a billable lead, and which ones can you return: a wrong number, a job outside your area, a service you do not offer, a duplicate?
• Can you choose your areas and job types, and pause or cap the leads in a slow month?
• Is there a minimum term or a monthly minimum, and how do you end the agreement?

Who keeps the customer

Some sellers run the website or the phone number the customer used. If you stop paying, the next call to that number can go to someone else, and a past customer who saved it may not reach you again. As general advice, give every customer your own phone number and website from your first reply, and copy each lead into your own lead list the day it arrives, so the next job comes to you directly. The related answer on who should own your business phone number explains why the number matters.

Judge the seller by jobs won

Tag each lead as paid, with the seller's name, follow it to won, lost or still open, and compare jobs won with cost, as the related answer on buying leads from lead sites sets out. A seller that sends fewer, better-fitting leads can be the better deal than one that sends many.

Warning signs: a seller that will not say who else gets each lead, will not say how it finds people, bills for leads you could never reach, or will only let customers reach you through its own number.

Related answers

• Should you buy leads from sites like Angi or Thumbtack?
• Who should own your business phone number?
• How do you work out what a customer is worth to your business?