Buying Contact Lists in Email Marketing and Why it Does Not Work.

This morning at my office, I was running our weekly marketing meeting and upon talking about numbers in regards to our awareness campaign was interrupted by one of my young interns. He blurted out, “Why don’t you just buy a list of contacts and send out email blasts? Seems much faster than the ways you’re going about it.” Immediately everyone in the meeting became quiet. Not the kind of quiet from pondering a brilliant idea, but the quiet from disbelieving someone actually spoke aloud such an idea.   I quickly adjourned the meeting to continue our group discussion later in the afternoon, as it was necessary to explain to him how and why this practice should be avoided, which I am now sharing in this blog.

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Especially in small businesses and start-ups, we all know one of the primary focuses companies face is how to grow awareness and attract customers. Many who are not seasoned or well versed in marketing immediately think the quick solution is to purchase a list of contacts from a company that have been “pre-qualified” within an industry or interest targeted. However, using lists that were not earned through hard work and external communication channels like social media can do more harm than good. Below is a list of reasons that will illustrate why this practice should be avoided.

#1) It goes against the utilization rules of your software and ISP.

For many software packages and suites including agreements with Internet service providers, these unsolicited email blasts to people who have not opted in is a major violation of the terms and conditions of the software utilized. In some cases, abuse of this term will result in your accounts being suspended or outright cancelled.

#2) Your cumulative reputation will be negatively tainted.

Building a company’s reputation with a strong brand identity cannot be accomplished overnight. If it were as simple as flicking on a light-switch, then everyone would be successful. Receiving unwanted email advertisements can motivate some to engage social media to speak negatively on your practices. With enough of these negative reviews on your business practices, it will sabotage future efforts of enticing others to use your products or services. Tens of thousands of company’s reputations have been destroyed by comments posted on social media outlets like Yelp, the Better Business Bureau, industry forums and even on your own Facebook or Twitter page warning others of your invasive practices.

Additionally, these email blasts can negatively affect your sender score, which ISP’s utilize to determine the trustworthiness of the sender. Especially if you have a high bounce rate, the ISP will filter your sends out due to being labeled spam. Additionally your score can be reduced from complaints and levels of deliverability failure from sending to non-existent email addresses which lists are commonly full of. One large bad campaign of this type can make months to regain your original trustworthiness with the ISP.

#3) List values are overhyped.

As someone who has made this mistake years ago, I have heard from the salesman of these lists that they are “pre-qualified high-quality opt-in lists”. While these list companies talk big game, if the list was so valuable ask yourself they would be selling it for a lot more money. The only good list you can get is one you make yourself from your own efforts. In my experience over 35% of the contact information provided was outdated and full of expired email addresses. The more sends you do to expired or non-existent email addresses, the higher your spam rating goes. More often than not, these contacts have not opted-in to receiving information in your product or service category.

#4) No one wants unsolicited advertisements.

Unless people are specifically looking for your information, will consider your email to be a nuisance. If it doesn’t go directly into their junk folder and they do look at it, your message will fall upon deaf ears, conditioning your audience to ignore anything further you have to say.

#5) ROI near zero.

As I have heard time and time again looking at the pitches from these websites, they claim the ROI of email marketing up to 2500%.   The key words “up to” is the first red flag as it does not state “we guarantee” nor does it state “you will receive”. It’s funny how few of these entities actually have a money back guarantee and those that do have some sort of fine print loophole in the agreement. Imagine if you will, you purchase a list from one of these companies. Initially, you will find when blasting out all of those emails that the deliverability rates are less than 50%. After that, those that continue on the send process, the junk mail filters will typically take up to 60-70% of the emails to people’s email junk folder. In terms of open rates, it ends out if you are lucky, you may have up to 2% open rate, but most statistical reports state it was typically ended up 0.2%-0.8%…. not even one percent made it on average to an interested recipient. As any ROI formula will tell you, campaign profit must exceed cost/expenses to be remotely successful. I compare this to the analogy of 2,000,000 sperm trying to reach one egg. Along the way, most if not all fail to make it to the endpoint and impact.

Conclusion

Successful email marketing is not an overnight process. The time tested methodology of focusing on building relationships and establishing yourself positively on social media, through ads, media exposure and providing a positive product or service that makes your customer’s evangelize about you is the best way to build your following and attract others. Short cuts quite simply do not work.