$55,000 Spent. ZERO Qualified Leads. Here’s What Went Wrong

A business owner spends nearly $55,000 with a marketing company and receives zero qualified leads. How does that happen — and why is the client still locked into the agreement?

In this episode, Mike and I talk about one of the biggest problems in digital marketing: agencies that get paid regardless of whether they're actually producing results.

We discuss:

The danger of long-term vendor lock-in
Why leads and qualified leads are completely different things
Why Google Ads and Meta Ads are often better starting points than cold outbound
The importance of connecting marketing data to actual customers and revenue
Why business owners need an ongoing feedback loop with their agency
How inexperienced marketers can burn through enormous advertising budgets
Why good agencies sometimes need to tell a client, “This isn't working”
The questions every business owner should ask before hiring a marketing company

Marketing doesn't always work perfectly. Campaigns need time, testing and iteration.

But there is a major difference between working through a campaign that needs improvement and continuing to collect money while delivering no meaningful outcome.

If you're spending thousands of dollars per month on digital marketing, your agency should be accountable for what happens next.

Learn more about Sage Digital Agency and how we approach website design, Google Ads, Meta advertising and digital strategy.

What is Sage Insights?

Sage Insights is a podcast about business, digital marketing, website design, and the real work behind building a strong brand online.

Hosted by Alex Jariv of Sage Digital Agency, the show features honest conversations with business owners, entrepreneurs, creatives, and industry experts about what actually drives growth: better strategy, stronger websites, clearer messaging, smarter marketing, and the right people behind the work.

From web design and WordPress to paid media, branding, client experience, leadership, and the lessons learned from building real businesses.

Alex: 00:00

Line of ours, we did a website for first, which is usually how it works. We redo the site, then we turn on the market. We're like, Well, now what do we do? Obviously, it's the marketing. His exact words.

Alex: 00:09

I spent $75,000 last year with a quote unquote marketing agency. I got zero, zero phone calls and inquiries. Zero.

Mike: 00:15

We can only do so much. We see the numbers. We see the search terms. We see the campaign performance, the conversion rate. You see all those metrics.

Mike: 00:22

That's only half of it. What happens when those people are not qualified? Yeah. You need to be able to iterate.

Alex: 00:27

If you're not willing to place the right individual or group into management, well, don't be in the management business.

Mike: 00:32

I think that's the difference. When you have someone who has the experience and the track record, they're able to identify the problems much earlier on.

Alex: 00:42

Mike. Alex. It's been a while since we sat down and chatted. It has been. You're too busy locked away in your office working all day long.

Alex: 00:49

So I brought up to you earlier this unfortunate scenario that a beloved client of ours has experienced recently. Not going to name who they are, of course. And long and the short of it, actually, this company came across my radar, I don't know, six months or so, and offered services to us, right? Hey, we're going to do this work for you. We're going to won't give away too much here, but we're going to send out cold email and we're going to call and we're going to send postcards and you're not going to believe how many appointments you're going get, but we're not going to verify or guarantee that you're going to get any amount.

Alex: 01:24

This client, who is a contractor, signed up for a year agreement at a very significant price, 5 k monthly. And guess what? Eleven months in, has not gotten not one qualified lead with a $55,000 spend to date. I mean, I don't know what to say. You just gotta cry.

Mike: 01:51

You know, this isn't the first time that I think we've either one of us have heard this type of scenario. I I think the actual term's called vendor lock in, where someone will they'll get hooked and sign some long term agreement and things it's easy to start things off great. And then what happens? Said agency is secured, you know, nothing to you know, there the ability to drive or the necessity to drive performance month after month kind of goes away because they know that they They're getting paid irrespective of contract their secured. Kind of company?

Mike: 02:28

Off to a junior. Just what kind

Alex: 02:30

of company are you generally promising too much and delivering zero, and on top of that causing financial loss to the customer and locking them into a contract? You know, like, at the very least, have some basic minimum, like, you know what? You're right. We didn't perform. We're giving you unqualified people that could never have literally she even said, they're telling me they didn't even want to have a conversation, but I'm still getting an appointment booked with me.

Alex: 02:57

This is the

Mike: 02:57

one that did not have reporting or they did? Goodness. Who I don't recall. There's so many

Alex: 03:02

of these stories, but I I don't think they have much by of any of anything. So but what does one do? Like, just again, look, the point of all of this is I'm not saying that Google Ads and Meta Ads are the only way. Right? But, like, if you're an organization looking to spend money, you got a bit of a budget.

Alex: 03:20

Right? You wanna spend $510,000 a month something on a monthly basis and you want some result. I think the point I want to make is the first money I don't think needs to be going to cold email, cold outbound telephone calls, and an attempt to book meetings with group that's going to lock you in for a year and not provide a result. Turn on Google Ads. Turn on Meta, if possible.

Alex: 03:45

Turn on both together, preferably. And these people have intent. Going to these biggest platforms. They're typing the query and they're coming to the website. Like, should that not be generally the first steps?

Mike: 03:57

Look, cold phone calls, I think we know no one who's answering a cold call. And then cold email, best case scenario, you're getting what? A fraction of 1% on Is that what it is? Actual response rate, which, you know, who's yeah. Between the email filters and people just as me one hell of a cold email to get a response.

Alex: 04:20

Yeah. Yeah.

Mike: 04:20

Yeah. Think some of the best client engagements that I've had are with the clients who are actively involved in some capacity. The term that we've used is done with you.

Alex: 04:34

Mhmm.

Mike: 04:35

We can only do so much. We see the numbers. We see the search terms. We see the campaign performance, the conversion rate. You see all those metrics.

Mike: 04:43

That's only half of it. What happens when those people are not qualified? Yeah. You need to be able to iterate. And for people and companies that have they don't need to have the platform knowledge, the experience, the understanding, but they have to have the business understanding

Alex: 05:03

Yep.

Mike: 05:03

Of what's happening for the feedback on

Alex: 05:05

those I was gonna say feedback loop, right? Are they quality? Are they not quality?

Mike: 05:08

Look, e commerce is easy. Someone's gonna go to a They're gonna click a link. They're gonna go to from an ad. They're purchase or not. And then you can track the cart abandonment, etcetera.

Mike: 05:18

The lead gen, a whole separate component. Are they qualified? You can put certain filters in. People can you know, they say yes. They do this, may

Alex: 05:26

ask more questions.

Mike: 05:28

But you still need to track from lead submission to actual acquisition or conversion of a paying client, paying customer, paying whatever. And you need that feedback somehow. And it has usually, it's gonna come from whoever's on the other side of the business. Yep. You know?

Mike: 05:52

Hopefully, when we get a chance at this, we'll get that feedback.

Alex: 05:56

It reminds me, a client of ours, we did a website for first, which is usually how it works. We redo the site, then we turn on the marketing. We're like, well now what do we do? Obviously, it's the marketing. His exact words.

Alex: 06:07

I spent $75,000 last year with a quote unquote marketing agency. I got zero, zero phone calls and inquiries. Zero. We had success, thank God, month one.

Mike: 06:16

Well, you see this from the web design. Again, Google Ads, slightly, not, you know, it's probably the same barrier to entry. And you know, you get somebody from a guy, day he's a cashier at a bank, the next day he's

Alex: 06:30

Google Ads expert.

Mike: 06:31

Ads expert, AI expert, you know,

Alex: 06:33

it's Yeah, yeah,

Mike: 06:34

yeah. It's How can you

Alex: 06:36

be an AI expert when a thing is all new, right? If

Mike: 06:42

you're not a data scientist, I'm convinced can't be an AI expert. Everyone's learning it at the same time.

Alex: 06:48

We're all learning it, yeah, yeah.

Mike: 06:49

Which to me, I think most fascinating part is that everyone who's deeply invested is learning today.

Alex: 06:58

Yeah.

Mike: 06:59

You know, the same way that at one point you didn't know how to drive a car, you figured it out. You're you're messing around with it long enough, you'll get it. But it's and seeing these people, you know, I look back on on on TikTok and Instagram. A a year ago, they're promoting crypto. Now all of a sudden, they're the AI workflow automation expert.

Alex: 07:19

It's Yeah. Not to go down a rabbit there. Like, I'm so interested in our own Google ads. Like, again, expensive locally. It can be upwards of a $100 a click.

Alex: 07:28

Right? Fair statement for us. Right? For my business. Yeah.

Alex: 07:31

For certain terms. And when I look at some of the results, every one of them is some AI churned landing page with no depth, no nothing. They all look the same. Again, good in this looking in the sense of it's not some, like, horrific template that's a total piece of garbage. But also at the same time, really bad for the customer.

Alex: 07:52

Right? Really bad for the customer. Because when you have a service that costs to acquire that lead significant, right? $100 a click in this case, how many clicks do I need in order to get a lead? And you have somebody that thinks they're getting a custom website for $1,500 They're grossly misunderstanding what It's goes into very difficult to succeed.

Alex: 08:11

But anyway, coming back to the point of, like, I really believe, look, I don't know what I don't know, right? And I take that philosophy in my life that the more I learn, the more I realize how much is yet to be learned. Whereas some, you you get a little bit of experience that you're the knower of all things and can solve every issue. I feel that way about us collectively, Sage. I feel like we come, we learn, we infuse the best that we possibly can.

Alex: 08:34

We're not perfect. Nobody's perfect. It's a matter of how you deal with the imperfections, I think, rather than trying to say we do all things well all the time. We only take on engagements that we believe we can succeed in. I think that's also a big benefit to our clients, right?

Alex: 08:46

Not everybody can say that. That company that, I'm sorry, stole almost 60,000 from this lady so far, they didn't have the, I don't know what the right word is, ethic, ethical perspective, more, whatever it is, to not do harm to her, right? If they knew they couldn't succeed or didn't think they really could. Or had the benefit of like, Hey, you know what? It's been a few months.

Alex: 09:09

We haven't done nothing. Let's probably cancel this thing. Sorry for the hassle. I mean, come on.

Mike: 09:16

So that's the thing with the vendor lock in is that they're secured. Most likely, it got handed over to some junior post college grad nephew of someone to I don't know. Sustain. Who knows? Maybe maybe not.

Alex: 09:28

Or maybe just the whole process sucks,

Mike: 09:29

and maybe that's not the way to generate leads. Look. It's not a win on every account. I think we have a good track record.

Alex: 09:36

I was gonna say the same.

Mike: 09:38

Why? Because Certainly better than most.

Alex: 09:39

We're not taking the wrong engagements. That's what it is. When you don't take the wrong engagements, you have better, you know, better success.

Mike: 09:44

Some verticals just don't pan out for whatever reason. Sometimes you get into the ad auctions for Google and Meta Ads, and then you find out that the cost per click is not what the tools reported, and your cost is three x, four x. And even at a successful campaign, sometimes the cost of conversion just doesn't make sense at that time. I get it. But often we'll see in certain verticals, all of a sudden, then the cost drops after a month or so.

Mike: 10:12

But that's why I think it's so critical that the any sort of ongoing engagement, whether it's the website design development, someone's actively involved. I mean, we've had plenty of those where someone signs up, they get started, then radio silence for nine months. Yep. The marketing, the same thing. Someone needs to work it's a it's a partnership for a reason.

Mike: 10:32

You're you're working with a vendor.

Alex: 10:33

Leadership slash management, etcetera, team associated that's there in order to be involved. I totally agree with that.

Mike: 10:39

And you know what? Maybe that's just for the, like, the custom work. Because if you're going to buy some product that's or if you're buying a template for $500 and that's what it is. You don't need, you know I get it. You're not going outside that framework.

Alex: 10:54

But You want custom work. You need to be involved in the process, the feedback loop, like we said, and better result will come out of it. I agree. Again, just to strongly understate, if one is interested in spending money in digital marketing, please let it be in Google Ads, Meta Ads, managed by professional people paying attention to the details and not allowing days, weeks, months to go on with problems and horrific spend. I always remember the example I gave.

Alex: 11:21

We took over management of a real estate agent broker ads many years ago, and we're in Las Vegas. The guy is licensed in Las Vegas. If I'm not mistaken, I Mexico. Think a Yeah. Dollars 175 for a click for sell my home in Mexico.

Alex: 11:39

I mean, if that's not, I don't know, what's the word, gross negligence at minimum, right?

Mike: 11:46

It's

Alex: 11:47

crazy. Doing terrible harm to your customer. Right? Crazy. So, again, I'm just flabbergasted I hear these stories.

Alex: 11:55

Maybe I shouldn't be anymore. I think you always think you've heard it all. You've heard every scenario so many times because you do something long enough, but I'm still shocked at the things which I hear from time to time. And this was one of them.

Mike: 12:07

I think that's the difference. When you have someone who has the experience and the track record, they're able to identify the problems much earlier on, which leads to better outcome in almost every case. And they're asking the right questions. And as a client, I think as you interview whoever, you start to understand who gets it and, you know, who's just doing it.

Alex: 12:36

But it's tough. You know, the client's perspective, they're hiring once or twice or three They have a nice sales pitch or they must be qualified, right? I'll tell you my, look, what I know you already forgot. All right. My mother always says that.

Alex: 12:49

Like someone once said to me, Alex, you're a reasonably smart guy. Why don't you just manage the ads? I'm like, are you joking? I couldn't even log into the platform. I mean, I'm joking, but not joking.

Alex: 13:01

But like, it would be a abuse of my relationship, my duty to our client to not have professional oversight and not do what is necessary. If you're not willing to place the right individual or group into management, well, don't be in the management business. Right? I really believe that.

Mike: 13:22

I think it's well said.

Alex: 13:23

Don't take it on. Go do something else. You're doing harm to your customer, period.

Mike: 13:28

Look, if you're, I don't know, a one man shop working out of your parents' basement, mean, maybe it's not so easy.

Alex: 13:35

I've said this before. Don't take it, go find I another mean, it's just not right. It's crazy. I mean, and the loss just amplifies when you're working working with bigger customer. Right?

Alex: 13:46

Like not everybody's gonna agree to lose 60 k in a year just for some company to sell you a story. Right? It's just unbelievable.

Mike: 13:53

But that's where the advantage of working with a company that's gonna do no vendor lock in. You know, you have to perform. I mean, how many months is someone gonna go with a negative outcome before they say goodbye?

Alex: 14:08

I just wouldn't take it on. I would say goodbye. No.

Mike: 14:10

I'm saying but I'm saying, like, as a company, if we went to hire a vendor and they could not perform, if there's no there's nothing to hold them accountable. I agree. They have to perform. They have to pay attention.

Alex: 14:22

Agree. 100%. I mean,

Mike: 14:23

the money's guaranteed, they're gonna they can do whatever they want.

Alex: 14:26

That's right. Maybe they will. I have no desire to be entangled in relationships that aren't a fit for either way, right? From our side, from the client side, from both. I want to do good work.

Alex: 14:34

I want our clients to be satisfied. I want to know that we've done right by them. And again, right by them means paying attention to the details and knowing that things are problematic in advance and fixing them or moving them in the right direction or testing something different, right, in order to see.

Mike: 14:49

Look, when you told me about this client, I guess the first thing I thought of was this vendor lock and that I keep coming back to you. Having one month, three months at most of an ongoing notification, I don't think there's anything wrong with that. I think it's pretty standard in the in the industry of something. You need time to correct. You need time to see things out.

Mike: 15:10

Mhmm. One month is not necessarily I agree with you. An indicator of of performance.

Alex: 15:14

Especially not the first month. There's a ramp up. There's time. I get

Mike: 15:16

it. But especially now with how quickly things are changing, the tools, the tool set, the approach, the the channels, I think that by getting involved with those type of vendors puts the business at a disadvantage because as things change, you need to have a partner that is changing with it.

Alex: 15:37

Yep. I

Mike: 15:37

agree. Not necessarily being you don't wanna be necessarily the first one, but you certainly don't wanna be the last one. And I think that's the tough part because these people have big businesses. They're doing real business. They have other priorities.

Mike: 15:48

They have whole teams.

Alex: 15:49

Mhmm.

Mike: 15:50

You're trusting that the vendor that you choose is gonna, like you said, do right. But, you know, you need some sort of accountability. And that's where the reporting, which, not the fancy graphs, but here's what happened and here's what yielded from it.

Alex: 16:06

Yes.

Mike: 16:06

And here's what needs to happen. Your monthly check ins. Both sides should be asking the right questions.

Alex: 16:12

Yeah, I agree with him. But again, I meant, know, I said it before, the client doesn't. The client doesn't know. They have a business, they're a business owner, they're an operator, generally, right?

Mike: 16:19

Mhmm.

Alex: 16:19

And it's problematic when they don't know the questions to ask. That's why they should be educated as to the And questions to maybe a little bit of what we've discussed here can help someone make a better decision when given the time to, I don't know, signing your agreement or something like that.

Mike: 16:35

You don't know what you don't know. If anyone wants to reach out, I'll be happy to outline the questions that

Alex: 16:41

should I

Mike: 16:42

like that. You know, we'll add it to the bottom of the Great. Blog

Alex: 16:46

I think that's great.

Mike: 16:47

Questions that should be asked. I think it's very important.

Alex: 16:49

I think it is too.

Mike: 16:50

You need to understand what questions to ask.

Alex: 16:53

Things are just so much more fast paced now than ever. Right? Like, think about it.

Mike: 16:57

Well, it's not so direct. It's not you're clicking on an ad, going to some funnel opt in squeeze page and converting. It's, you're going to Google, you're doing the website, you're seeing them on Instagram, you're seeing them on Facebook, you get an email, maybe a text message. It's the whole funnel approach. It's not so easy.

Mike: 17:16

I agree. But you have to look at the channels independently and then together.

Alex: 17:21

It's always a great pleasure to speak with you, and we should do this more frequently. We should have this lovely studio. Yes. Yes. Yes.

Alex: 17:29

Thank you.