What is Lead Flipping: definition and benefits for SaaS businesses

With sales shifting increasingly into the digital space, companies require a steady flow of leads to survive and grow. However, finding new leads and converting them into customers can be challenging, and 58% of business owners admit it to be the biggest challenge. 

Exchanging leads between businesses, or lead flipping, can help you overcome these challenges. Today, we’ll dig deeper into lead flipping, discuss who lead dealers or brokers are, and how they can be helpful for B2B, particularly SaaS companies.

What is lead flipping?

First, let’s look back to the origin of the term flipping in business. This way, it’ll be easier for us to understand how it works in relation to leads.

The term flipping first appeared in the United States as a type of real estate investment strategy, not for personal use for living or renting, but for its renovation and modernization with further resale for immediate profit.

Lead flipping in marketing is similar to real estate flipping as it’s essentially buying lists of pre-qualified leads and then reselling them at a higher price once they have been filtered through the lead generation system. 

Pre-qualified leads mean the seller filters out any bad or unqualified leads before selling the lead list. 

Lead qualification criteria for every business vary. For SaaS businesses, the highest lead score can be given when a person visits your pricing page or subscribes for a free trial of your product/service. In some industries like finance, an individual is qualified as a lead if they fill out two forms or pick up the phone and have at least a 30-second conversation.

Qualifying leads can take much time, so businesses increasingly buy pre-qualified leads through intermediaries—lead dealers (brokers). 

Who are lead dealers (brokers)?

Lead dealers or brokers are an emerging class of startups for whom lead flipping is a legit way to generate leads and make a profit with a minimal investment. 

For example, they can act as a lead generation company and create high-converting digital assets such as thematic landing pages or social media accounts to push high-quality customers through them. They can use popular lead generation strategies, from email marketing and blogging to hosting webinars. They then flip the collected leads to a business willing to buy them, target them more accurately, and charge a fee for making the connection. 

Lead dealers/brokers can connect businesses with potential leads in many ways, like buying leads from small local businesses within one industry and selling them to bigger marketing teams. They act as middlemen, negotiating deals between buyers and sellers; some companies also provide businesses with consulting services in the field of lead generation.

Lead flipping benefits

There are several benefits to dealing with lead intermediaries. First and foremost, they usually have extensive networks of potential leads and have spent years building relationships with buyers and sellers, so they know who to contact to get the best deals for their clients. 

Additionally, these middlemen have a deep understanding of the market and knowledge of current trends. So, if you’re looking for a more efficient way to find qualified leads, then contacting a lead dealer or broker is the right choice since they can help you save time and free up your resources to focus on running your business.

Is lead flipping legal?

In fact, yes. 

However, it should be kept in mind that when you flip a lead, you’re essentially collecting and transferring that person’s contact information to a third party, and if you’re not careful, lead flipping can land you in hot water with the authorities.

Due to the increasingly tightening privacy-protecting legislation like the EU’s GDPR and the U.S. CCPA, flipping leads has become a bit more complicated. Businesses that flip leads, as well as those that buy lead lists, must be careful to comply with a variety of regulations to protect the privacy of their potential customers. 

The first thing a lead flipper needs to do is get consent from the people they’re flipping leads for. This means getting them to agree to have their information shared with a third party in exchange for something of value, like a discount or free admission to a webinar.

That consent needs to be explicit—in other words, people must actively agree to share their information. You can’t just assume that they’re okay with it. Therefore, it’s a must for lead flippers to provide customers with proper disclosures. Lead flipping businesses need to find what the lead buyer is looking for, which is required by law to divulge in a web form and other operational elements. 

Wrapping up

Lead flipping can be a great way for B2B companies to get their products in front of more potential customers, and it can be a profitable venture for lead flipping businesses if done correctly.

Lead flipping through specialized intermediaries can help B2B companies speed up the sales process by providing them with pre-qualified leads, enabling them to improve their customer base and implement highly targeted marketing campaigns. They don’t have to spend time vetting leads themselves, meaning they can save much energy to streamline their sales processes and get more out of their lead generation efforts.

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