What lead generation actually costs: in-house vs done-for-you

Most owners compare lead generation options by looking at one number each: the salary of the person they would hire, the hourly rate of the freelancer, or the monthly fee of the agency. Those three numbers are not comparable, because they cover wildly different amounts of the actual job. A salary buys you a person's time and nothing else. A subscription fee usually includes the tooling, the data, the management and the process. Comparing them directly is how businesses end up surprised in month four.

This post walks through the full cost of each option, including the lines that never make it onto the spreadsheet, and then gives you a way to decide. Every figure below is an illustrative range rather than a quote, because the real numbers move enormously by country, city and seniority.

Option one: hire in-house

The in-house route usually means a junior sales development rep, or a generalist marketing hire who is also expected to prospect. It is the option that feels most solid, because at the end you own the capability. It is also the option whose cost is most consistently underestimated.

The costs on the offer letter

Base salary is the headline. A junior SDR in the United States typically lands somewhere in the $45,000 to $60,000 base range depending on the market, often with a variable component on top. In the UK the equivalent role sits materially lower in absolute terms, and in Nigeria, India or the Philippines lower again. Whatever your market, take the base you would realistically have to offer to get someone competent, not the number you hope you can get away with.

Then add employer costs, which are not optional and are easy to forget when you have never hired before. Depending on where you are, that means employer payroll taxes or national insurance, a pension or retirement contribution, health cover if that is the norm in your market, holiday pay and sick pay, and any statutory insurance. As a rough planning assumption in most developed markets, budget a meaningful percentage on top of base before you count anything else. It is not a rounding error.

The costs that never appear on the offer letter

This is where the comparison usually breaks down, because these lines are real money and real time, they just do not have an invoice attached.

• Recruitment. Either you pay a recruiter a percentage of first-year salary, or you spend your own weeks writing the ad, screening applications and running interviews. If your time has any value at all, doing it yourself is not free — it is just unbilled.
• Tooling and data. A prospecting seat needs a CRM, a contact-data or email-finder subscription, sending and deliverability infrastructure with warmed domains, a sequencing tool, and often a LinkedIn premium or Sales Navigator seat. Individually these look small. Added together they routinely run into the hundreds of dollars a month for one person.
• Ramp time. A new SDR does not produce qualified conversations in week one. They need to learn your product, your market, your objections and your qualifying criteria. Two to three months before steady output is a normal expectation for a junior hire, and you pay full cost throughout.
• Management overhead. Someone has to write the target account list, approve the messaging, review the calls or emails, and hold the person accountable to a number. If that someone is you, the cost is your attention, taken from whatever you were doing instead.
• Turnover. Entry-level sales roles churn. If your hire leaves in month nine, you lose the ramp investment, absorb a vacancy gap, and start the recruitment cycle again. Any honest model of in-house cost has to amortise this rather than assume the first hire stays forever.

Stack those up and the fully loaded cost of one junior in-house prospector is considerably more than the salary line, and the first quarter of it buys you learning rather than pipeline.

Option two: a freelancer or VA

The freelancer route is the cheapest on paper and the most variable in outcome. You are buying hours from someone who already has some version of the skill, without the employment overhead, the recruitment fee or the long commitment.

Rates spread across an enormous range depending on where the person is based and what they actually do. A virtual assistant building lists and doing manual research sits at the low end. An experienced outbound specialist who can write sequences, own deliverability and handle replies costs many times that. Be clear about which one you are hiring, because the job titles overlap and the capabilities do not.

The honest costs of this route are these. You almost always still pay for the tooling, because a freelancer will either use your subscriptions or bill you for theirs. You carry the same management overhead as an employee, and often more, because a contractor has other clients and less context. Quality control is entirely on you. And there is no continuity guarantee: a freelancer can take a better-paying client and give you a week's notice.

Option three: a done-for-you subscription

A done-for-you agency subscription bundles the people, the process and the tooling into one recurring fee. You are not buying hours, you are buying an outcome definition: a number of qualified leads or booked conversations per month, delivered by a team that already owns the infrastructure.

For reference, our own plans are Launch at $349 a month, Growth at $749 a month and Domination at $1,499 a month, billed monthly in USD or NGN and cancellable at any time. Growth includes 50 qualified leads a month and Domination includes 120. The point of quoting them is not to argue that a subscription is always cheaper, because for some businesses it is not. The point is that the fee already contains the tooling bill, the data costs, the management and the process, so it can be compared against a fully loaded in-house number rather than against a salary.

The genuine trade-offs are control and depth. An agency team will never know your product as well as an employee who sits in your sales calls every day. You have less direct control over day-to-day activity, and you are dependent on another company's staffing and priorities. If your sale requires deep technical fluency to even open a conversation, an outside team starts at a disadvantage that no amount of onboarding fully closes.

The cost lines side by side

Read that table as a checklist, not a verdict. Fill in your own numbers for each row and compare totals across twelve months rather than one. Twelve months is where ramp time and turnover show up, and those are the two lines that most often flip the answer.

When hiring in-house is genuinely the right call

There are clear cases where the employee wins, and pretending otherwise would be dishonest.

• Your need is high volume and sustained. If you know you will be prospecting at scale for years, the fixed cost of an internal team eventually beats paying a margin on top of someone else's.
• The sale is complex or technical. If a credible first conversation requires real product fluency, you want that knowledge inside the building, compounding.
• You have management capacity. Someone with time and sales judgement must set targets, review work and coach. Without that person, a junior hire drifts and you blame the hire.
• You are building a capability, not just filling a quarter. Owning the playbook, the data and the relationships has long-term strategic value that a vendor relationship does not.

When a subscription is the right call

• The channel is unproven for you. If you do not yet know whether outbound works in your market, hiring is an expensive experiment with a painful exit. A cancellable subscription is a cheaper way to find out.
• You need to start this month. A hire realistically means weeks to recruit plus months to ramp. If the pipeline problem is urgent, that timeline is the whole argument.
• Nobody is available to manage. An unmanaged junior hire is the most expensive of all outcomes, because you pay full cost for output that does not arrive.
• You want the ability to stop. Seasonal businesses, a lumpy year, a pivot on the way. Fixed headcount is hard to reverse; a monthly plan is not.
• Your volume is modest. If you need tens of good conversations a month rather than hundreds, a full-time salary plus tooling is poor value for the work involved.

A decision framework you can apply this week

Work through these in order. The first one that gives you a firm answer usually is the answer.

1. 1Is the channel proven for your business? If you have never run outbound successfully, buy a cancellable version first and hire once you know it works.
2. 2When do you need pipeline? If the answer is inside ninety days, ramp time rules out a new hire as the primary solution.
3. 3Who will manage the work? Name the actual person and the actual hours. If you cannot, do not hire.
4. 4What volume do you need, sustained? Model twelve months. Low or uncertain volume favours a subscription; high and certain volume favours building internally.
5. 5How complex is the first conversation? If it demands genuine technical depth, lean in-house or plan a much heavier onboarding of any outside team.
6. 6What happens if you need to stop in month four? Write down the cost of each option's exit. For many small businesses this single question decides it.

The broader point is that a salary is the smallest component of an in-house hire and a subscription fee is most of the cost of an agency. Once you compare fully loaded twelve-month totals instead of headline numbers, the decision is usually much clearer than it looks, and it is frequently not the one the headline numbers suggested.