The short version: ask what counts as a lead, what happens if the first three months underperform, and who you can speak to who left them. Most agencies will happily show you a glossy case study but go quiet when you ask about their worst client, and that reaction tells you more than any pitch deck. If you only ask one uncomfortable question before you sign, make it that one.
Why the pitch call is where deals go wrong, not the contract
I’ve watched a lot of small business owners sign lead generation contracts based on a slide with a big number on it. “We generated 400 leads for a client in month one.” Nobody ever asks what a lead was in that case. A phone number typed into a form? A person who booked a call and showed up? A person who bought? These are three completely different things wearing the same word.
I had a client, a home improvement business owner in Kent I’ll call Colin (he’d rather I didn’t use his real name), who signed a PS3,000-a-month retainer with an agency promising “50 qualified leads a month, guaranteed.” By month three he’d had 31 form submissions, four phone calls booked, and zero jobs. He’d spent PS9,000 and got one quote request that went nowhere. When he finally asked the agency to define “qualified,” they told him it meant the person had filled in a name, phone number, and postcode. That was it. No budget question. No timeline question. Just a name and a postcode.
Colin isn’t unusual. He’s just one of the few who told me about it afterwards instead of quietly writing it off as a bad experiment. If you want a clearer read on when this kind of arrangement pays for itself, I wrote a longer breakdown on when outsourcing lead generation is worth it and when it is not, because the honest answer depends entirely on your sales process, not just the agency’s ad spend.
Ask exactly what counts as a lead, in writing, before you sign
This is the single most important question and the one people skip because it feels basic. Don’t let “we’ll define that together” be the answer. Push for specifics:
- Is a lead a form fill, a booked call, or a call that happened?
- Does it need a real phone number and email, verified, or just typed in?
- Is there a minimum budget or intent question in the form itself?
- What percentage of their leads across other clients turn into a sales conversation, not just a form submission?
Get the definition written into the contract, not just said on the call. Agencies that resist this, or say “trust us, we know what a good lead looks like,” are usually the ones optimising for volume because volume is what shows up nicely in a monthly report.
Ask what the first 90 days look like, day by day
Most contracts have a 90-day minimum term. Most results take four to six months to settle, especially with cold traffic on Facebook or LinkedIn. That gap between contract length and real ramp time is where agencies quietly make their money, because a lot of clients cancel right before the campaign would have started working, and the agency has already been paid for three months of testing that looked like failure but was just calibration.
I’m not saying every agency does this on purpose. But I am saying the incentive lines up badly for you and reasonably well for them, and almost nobody points that out before a client signs.
Ask this instead: “Walk me through week one, week four, and week twelve. What are you testing, what will change, and what would make you tell me this isn’t working before month three?” A good account manager can answer that in under two minutes without checking notes. A bad one will talk in generalities about “optimising the funnel.”
Ask to speak to a client who left, not just one who stayed
Every agency has three or four glowing case studies ready to send over. Ask for something different: a client who cancelled in the last 12 months, and permission to email them directly. You won’t always get a yes. But the way an agency reacts to the question matters more than whether they say yes.
A defensive “we don’t really have churn” is a red flag on its own, because every agency has churn, the industry average for marketing agency client retention sits somewhere between 18 and 24 months for most small business accounts, so a company with none is either brand new or not being straight with you. A confident “sure, I’ll ask Sarah if she’s happy to chat, she left us in March because her sales team couldn’t keep up with the volume we were sending” is the answer of a company that isn’t hiding anything.
Ask who owns the leads, the ad account, and the list
This one gets missed constantly and it’s expensive to miss. If the agency builds and owns the Facebook ad account, the CRM automation, or the landing pages, what happens to all of that if you leave? Does your contact list transfer to you, or does it stay locked in their system?
Ask specifically:
- Is the ad account under my business’s Meta or Google account, or theirs?
- If I cancel, do I keep the list of everyone who’s opted in, with full contact details?
- Do I own the landing pages and forms, or are they hosted on the agency’s own domain?
If the answer to any of these is “no” or “we’d need to discuss that,” treat it as a genuine dealbreaker, not a minor detail. I’ve seen businesses pay for six months of Facebook lead ads only to discover the entire list sat inside the agency’s own third-party tool with no export option written into the contract. If Facebook ads are part of the plan, it’s also worth understanding what good looks like on that platform before you hand it over, which is why I put together a practical guide on how to optimise Facebook ads for more lead conversions, so you can judge their setup against something concrete rather than just trusting their word.
Ask how they’re generating leads, not just which platforms
“We use a multi-channel approach across paid social and search” tells you nothing. Ask for the actual mechanics. Is it a static form ad? A quiz? A downloadable guide? A booking calendar? The mechanism matters because different offers attract wildly different intent levels.
A PDF checklist gated behind a form will get you a pile of low-intent names. An interactive tool that asks someone three or four questions about their actual situation before showing them a result gets you fewer submissions but far warmer ones, because the person has already invested two minutes of thought before handing over their details. If the agency’s whole strategy is “download our free guide,” ask them why, because that model has been getting weaker for years as people have grown numb to it. I wrote about this shift in more detail in a piece on how AI now lets you build a real interactive lead magnet in a weekend instead of relying on the same static PDF everyone else is offering.
Also ask how they handle industry-specific nuance, because a generic playbook copied across every client rarely performs as well as one built around how your buyers behave. An agency running lead generation for a travel agency needs a completely different approach to one running it for a recruitment firm or a veterinary clinic, and if they can’t explain how their process changes by sector, they probably run the same template for everyone. I’ve written sector breakdowns for travel agencies, recruitment agencies, and veterinary clinics, and the differences in what converts across those three are big enough that a one-size-fits-all pitch should make you cautious.
Ask about the actual pricing structure, not just the headline number
There are three common models and they carry very different risk:
- Flat retainer, typically PS1,500 to PS5,000 a month for a small business account. You pay whether results come or not.
- Pay per lead, ranging anywhere from PS15 for a low-intent B2C form fill up to PS150 or more for a qualified B2B appointment. Cheap per-lead pricing almost always means low intent, so don’t shop purely on this number.
- Performance or hybrid, a smaller base fee plus a bonus or per-lead cost once volume passes an agreed threshold. This tends to align incentives best, but it’s also the model agencies are least likely to offer upfront because it puts more risk on them.
Ask directly which model they’re proposing and why, and ask what happens to ad spend if the retainer is cancelled mid-month. Some agencies keep unspent budget as a fee. Get that in writing too.
Ask who is running your account day to day
The person on the sales call is rarely the person managing your campaign. Ask their name, their experience level, and how many other accounts they handle at the same time. An account manager juggling 15 clients isn’t spending meaningful time optimising yours. Ask for a monthly reporting call as a contract condition, not an optional extra, and ask what’s covered in it beyond a screenshot of a dashboard.
A five-question test you can run on the first call
If you only have twenty minutes with a sales rep, here’s the shortest version that still tells you what you need to know:
- What exactly counts as a lead, and can you put that definition in the contract?
- Can I speak to a client who left in the last year?
- Who owns the ad account, the list, and the landing pages if I cancel?
- What’s the pricing model, and what happens to unspent budget if I leave mid-month?
- Who specifically will manage my account, and how many other clients do they run?
Watch the reaction more than the words. A good agency answers all five without flinching. A weaker one gets vague around question two and three every time.
What good looks like once you’re in
Once you’ve signed, the questions don’t stop, they just change shape. In month one you should be asking what’s being tested and why. By month three you should have a clear read on cost per qualified lead, not just cost per form fill. By month six, if the numbers aren’t moving in the right direction and nobody can explain why with specifics, that’s your answer regardless of how the relationship started. A good agency wants that scrutiny because it protects them too, since a client who understands what’s happening is far less likely to churn out of confusion halfway through a campaign that’s working.
Frequently asked questions
How much should a lead generation agency cost for a small business?
Expect a flat retainer of PS1,500 to PS5,000 a month for a small or mid-sized business, or a pay-per-lead model ranging from PS15 for low-intent consumer leads up to PS150 or more for qualified B2B appointments. Cheap leads are rarely a bargain once you factor in conversion rates.
What’s a red flag when talking to a lead generation agency?
Vagueness on the definition of a lead is the biggest one. If they won’t commit to a written definition, won’t let you speak to a client who left, or can’t explain who owns your ad account and contact list after cancellation, walk away or negotiate those terms before signing anything.
How long should I give a lead generation agency before judging results?
Most contracts run a 90-day minimum, but real ramp time for paid channels usually takes four to six months. Ask upfront what week one, week four, and week twelve look like specifically, so you know whether early numbers reflect testing or genuine failure.
Should I own the leads and ad account, or is it fine for the agency to hold them?
You should own your contact list, your ad accounts, and your landing pages outright, with a clear export process written into the contract. If an agency holds all of this in their own systems with no transfer clause, you risk losing everything if the relationship ends.
Related reading: How an SEO Rank Tracker Helps You Monitor Keyword Positions (And What It Won’t Tell You) and What to Ask a Lead Generation Agency Before You Sign.
This builds on my main digital marketing guide, my main guide on the topic.
