Every NZ business that spends money on lead generation eventually faces the same question: should you pay a monthly retainer to an agency, or should you pay per lead?
The answer isn't as simple as most agency websites make it sound. Both models have real advantages and real risks. The right choice depends on your industry, your sales cycle, your close rate, and how much control you want over the lead generation process.
Here's an honest breakdown of both models — including the maths most agencies hope you never run.
How the Retainer Model Works
You pay a fixed monthly fee — typically $2,000-$8,000/month for a NZ agency — plus your ad spend. The agency manages your campaigns, produces creative, and optimises for results. You're paying for their time, expertise, and the infrastructure they bring.
What you get:
- Full campaign management (strategy, creative, optimisation)
- Regular reporting and strategy calls
- Control over messaging, targeting, and brand
- Ownership of data, audiences, and ad accounts
- A team invested in your long-term growth
The risk:
You pay the retainer regardless of results. A bad month still costs you $2,000-$8,000 in fees plus whatever you spent on ads. If the agency isn't performing, you're out both time and money before you discover the problem. Most NZ businesses give an agency 3-6 months before evaluating — that's $12,000-$48,000 in retainer fees alone before you know if it's working.
How the Pay-Per-Lead Model Works
You pay a fixed price for each lead delivered. No retainer, no ad spend management — you simply receive leads into your CRM and pay for what you get. Typical NZ prices range from $30-$150 per lead depending on the industry and qualification level.
What you get:
- Predictable unit economics (you know exactly what each lead costs)
- Zero risk on slow months (no leads = no cost)
- No ad spend to manage or monitor
- Immediate lead flow (no 2-3 month ramp-up period)
- Simple ROI calculation: revenue from leads minus cost of leads
The risk:
You don't control the lead source. You don't own the ad accounts, the audiences, or the data. The lead provider can raise prices, reduce quality, or shut off the tap at any time. And because you're often sharing leads with competitors (many PPL providers sell the same lead to 3-5 buyers), your close rate will be lower than exclusive leads.
The Maths: A Real NZ Comparison
Let's compare both models for a solar installation company in Auckland targeting residential customers.
Scenario A: Retainer Agency
- Monthly retainer: $4,000
- Monthly ad spend: $5,000
- Total monthly cost: $9,000
- Leads generated: 120
- Cost per lead: $75
- Qualified rate: 60% (72 qualified leads)
- Cost per qualified lead: $125
- Close rate on qualified: 15%
- Installs: 10.8
- Average install value: $15,000
- Revenue: $162,000
- ROI: 18x
Scenario B: Pay-Per-Lead Provider
- Cost per lead: $50
- Leads purchased: 120
- Total monthly cost: $6,000
- Qualified rate: 40% (shared leads, less control) = 48 qualified
- Cost per qualified lead: $125
- Close rate on qualified: 10% (shared leads close lower)
- Installs: 4.8
- Revenue: $72,000
- ROI: 12x
Both are profitable. But the retainer model generates more than double the revenue at a 50% higher total cost. The critical difference is lead exclusivity and qualification depth — when you own the funnel, your leads are higher quality and only your sales team is calling them.
When Pay-Per-Lead Makes More Sense
The pay-per-lead model is the better choice in specific situations:
- You're just starting out and need leads today, not in 2-3 months when a retainer agency ramps up.
- You have limited budget and can't commit $5,000-$10,000/month to an agency plus ad spend.
- You're testing a new market and want to validate demand before investing in a full funnel.
- Your sales team is small and can only handle 30-50 leads per month anyway — so lead volume isn't a bottleneck.
- Your industry has simple qualification — if a lead just needs to be a homeowner in the right area, deep qualification isn't critical.
When a Retainer (or Hybrid) Makes More Sense
The retainer model wins when:
- You need exclusive leads — in competitive markets (insurance, real estate), shared leads get called by 3-5 competitors. Exclusive leads from your own funnel close at 2-3x the rate.
- Your sales cycle is long — mortgage and finance leads can take 90 days to close. You need to own the nurture sequence, not just the first touch.
- Brand matters — if your prospects need to trust your brand before buying (professional services, financial advice), you need to control the entire experience from ad to conversation.
- You're scaling — at some point, buying leads from a provider caps out. Building your own lead engine is the only way to grow past the provider's capacity.
- Data ownership is important — with a retainer, you own the ad accounts, the audiences, the creative, and the CRM data. If you part ways with the agency, you keep everything.
The Third Option: Pay-Per-Lead With Full Ownership
There's a model that combines the best of both: you pay per lead, but the agency builds and operates the entire funnel on your behalf — your ad accounts, your CRM, your brand, your data. No retainer. You only pay when a qualified lead lands in your pipeline.
This model eliminates the retainer risk (you don't pay $4,000/month when results are slow) while keeping the quality benefits (exclusive leads, your brand, your data). The lead provider takes on the ad spend risk and only gets paid when they deliver.
The catch? The per-lead price is higher than a generic PPL marketplace, because the leads are exclusive, verified, and qualified. But the close rate is higher too — which usually makes the unit economics better, not worse.
How to Evaluate Any Lead Generation Proposal
Whether you're looking at a retainer, pay-per-lead, or hybrid model, here are the five questions that actually matter:
- What's the cost per qualified lead? Not cost per lead — cost per lead that actually meets your criteria. This is the only metric that matters.
- Are leads exclusive or shared? If shared, how many buyers get each lead? Your close rate drops roughly 50% for each additional buyer.
- Who owns the data? If you stop working together, do you keep the ad accounts, audiences, CRM data, and creative?
- What's the verification process? Are phone numbers and emails verified before delivery? Are fake leads filtered?
- What does the optimisation feedback loop look like? Can you see which lead segments actually convert, and does that data feed back into targeting?
If a provider can't answer these clearly, they're selling volume, not quality.
Our Model
At OneAdsphere, we run a pay-per-lead model with full ownership. We build your funnel, run your ads, qualify your leads, and deliver them into your CRM. You pay per qualified lead — no retainer, no ad spend management fees. But you own everything: the ad accounts, the data, the CRM, the brand experience. Explore our lead generation systems across solar, insurance, mortgage, real estate, and professional services — or check our lead gen pricing page for transparent per-lead costs.
If you want to see what this looks like for your specific industry, book a 30-minute strategy call and we'll walk through the numbers together.