Data drives marketing. Connecting with customers and creating a personalized experience depends upon quality data. According to the Direct Marketing Association’s 2016 Statistical Fact Book, spending in the US on collecting, purchasing, and managing data in 2015 totaled $11.6 billion, and 40% of all data used for marketing purposes was purchased from third party list vendors. This 40% equates to billions of dollars in list purchases. With so much money being spent on data supplied by third party vendors, Marketers need to understand what they are getting for the money, especially regarding email lists.

You have email marketing software and now you want to purchase a list of names and email addresses so you can begin prospecting. You find a list vendor who gladly sells you a list. You’re happy because you saved some money and were able to choose various selection criteria to get what you are sure is the audience you want to reach. You send out your email and eagerly await clicks. You get none. What happened? 

The truth is purchased email lists are garbage.

It doesn’t matter if the list is supposedly all Opt-in records. The person who opted-in expected to receive emails from a specific business, not from your company. When you buy a list you own those records and can send as many emails as you desire, but so can anybody else who purchased the same records. That email list contains records which have been emailed over and over again, been closed, are invalid, and even a few which are actively being used as spam traps by anti-spam organizations to identify spammers. You will get bounce backs and headaches. Your IP address could get banned. You could even be fined or face more serious legal action if you are found in violation of Federal Trade Commission CAN-SPAM laws.

Rented email lists are a better option. The quality of the records is typically much better and CAN-SPAM compliant. However, there are a lot of bad email lists offered by less than reputable brokers.  You won’t own the data so it’s one time use only and you must pay the list provider to send your email for you. To be sure you are getting a quality list you must investigate the origin of the data. How was the data collected? Can the list broker provide evidence? How many times has the list been rented? How old are the records? How are response rates tracked? Ask lots of questions.

The truth is buyer beware when renting email lists.  

If you don’t do your due diligence you may be taken advantage of and that’s on you. List owners of quality data are very careful about to whom they rent the list, because misuse and overuse diminishes the quality of the data.  Expect to pay more and to be required to submit your email design for approval.  Beware of hidden charges and fees tacked onto the price. A reputable list broker will reveal all costs up front.  Also beware of list brokers who do a free test email for you to demonstrate the quality of the list and the results come back much better than you anticipated. This is a red flag that the broker is reporting false results.

Cost Per Acquisition (CPA) and Cost Per Click (CPC) works a little differently and is increasingly popular. The perceived benefit to using a vendor for email services on a CPA or CPC basis is you pay less if the email performs poorly.

The truth is CPA and CPC emailing may not save you money. 

Reputable list owners with quality data are protective and they require a minimum fee or payout regardless of performance. Just as with list renting, the supplier is in control and you should expect to provide your email design for approval of offer and content.  

According to the DMA Response Rate Report 2016 the average response rate is .3% for email sent to prospect lists. The average email response rate from house lists is .6%, which demonstrates the need to build a house list on your own.  

The truth is it’s time consuming to acquire data and build a house list. 

You will find a good article about growing your email list at Hubspot. Once you have a house list the door is opened to doing Data-Driven Marketing (DDM), on your own or through a reputable vendor with robust data analytics and digital marketing capabilities. Avoid the urge to purchase email lists. If you decide to rent a list or use a vendor for a CPA/CPC service, be cautious and ask questions to prevent wasting your marketing dollars.