Email Lists: Building vs. Buying

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Wednesday, September 19, 2012

Email Lists: Building vs. BuyingEXCERPT: Purchasing email addresses for most industries and markets is easy to do, and takes very little time and effort. However, does this mean that purchased lists are as relevant and convert as well as "home grown" lists? In this post, I outline the differences of building versus buying email lists, as well as my personal preference.

Email Lists: Building vs. Buying

Email marketing plays an integral role in many of today's most successful online companies, and for good reason too. Email marketing provides businesses with an opportunity to quickly, easily, and cheaply engage their most loyal customers, and compliments other marketing initiatives quite well.

For example, one company may choose to use email marketing for customer retention purposes, while another uses it to cross-promote and grow their other marketing verticals, such as blog subscribers, social media following, and requests for new print catalogs.

Regardless of how you plan to use email marketing to grow your online business, it's important to note that a company's email marketing strategy is only as strong as its email list - the individual list of email addresses obtained by the company. Email marketers worth their weight will agree that companies operating with highly targeted and relevant email lists will experience greater success than those who don't. This much is clear.

However, what's not so clear and often the focal point of many discussions is how a company comes to acquire their email marketing lists. There are two options; build or buy.

What is Building an Email List?

Building an email list is a process, and a time-consuming one at that. The idea is to obtain the email addresses of one's most loyal customers, as well as the permission to use it, for the purposes of sharing relevant and timely content. It's important to note that it is the customer that volunteers their information and requests to be contacted. Traditionally, email addresses are collected one at a time through the use of an online form. Using this method for email collection, companies can ensure that their lists remain highly targeted, and only contain those individuals interested in receiving email updates.

What is Buying an Email List?

Buying an email list is the process of purchasing a list of names and email addresses that a third party has collected. Traditionally, little information is provided about how these email addresses are obtained, only that they are targeted to specific industries and markets. For example, a broker may prepare a list containing mostly men of a certain age that have purchased tobacco online. In turn, they may sell this list to online cigar retailers. While there is little that can be done to corroborate the quality of a purchased list, it is a quick and easy way to break into email marketing, which is valued by some companies.

My Preference on Building vs. Buying Email Lists

In Email Marketing, one is only as good as the company they keep, and that means maintaining a vibrant, growing list of engaged customers. As a website marketing professional, I tend to favor the "home grown" option over simply buying a list of names and addresses. Not only does purchasing email addresses go against my personal belief on marketing ethics, but I am also a firm believer that a home grown list is far more relevant than a purchased one, and will ultimately convert better too.

It has been my experience that when buying email addresses from a third party, most of the addresses, say 50%, will be outdated or no longer valid. These emails are likely to go to spam and in-turn may hurt your company's reputation, deliverability, and sender score. Of the remaining 50% that actually reach a valid inbox, most will be ignored.

I find it best for marketers to always take a walk in their audience's shoes, and first determine how their solicitation will be received. Consider for a moment how one might react to finding an email from an unknown source or company soliciting a product or service to which they have no intention of ever purchasing. Similar to receiving a telemarketer's phone call, customers will likely ignore the advance and delete it without agitation.

Furthermore, building an email list from scratch offers email marketers multiple advantages, including the ability to segregate their list into smaller, more targeted niche markets. Imagine being able to divide a list of emails based on a customer's product or service preference, requirements, birthday, and countless other variables important to one's business. Such segregating would make sending separate, relevant messaging to different groups of recipients easier, more cost effective, and highly profitable.

5 Basic Tips for Building an Email List

In closing, I would like to offer the following 5 basic tips for building an email marketing list:

Advocate Customer Privacy

The idea that one's private information is likely to be shared or sold is not only disheartening to most, but can limit a person's desire to sign up for anything online, including email subscriptions. Therefore, if your company is not in the business of buying, selling, or sharing customer information then make it known. Create and promote your company's privacy policy and provide assurances whenever possible that your customer's personal information is well cared for.

Make Signing Up Simple

Signing up for an email subscription should never be difficult. Instead, companies should only focus on collecting the information they need, and nothing else. In most cases, an email subscription should require customers to provide their name and email address. Requiring customers to provide other information such as a mailing address, phone number, and date of birth may cause concern and stop them from subscribing.

Provide Subscribers with Content Options

One should never assume that their customers will want to receive EVERY email update. Instead, companies should segment their messaging and allow customers to subscribe to those emails that interest them most. For example, some subscribers may wish to receive newsletters and promotions, but not company announcements or even specific service and product updates. By giving subscribers content options, companies are able to provide a quality email experience while ensuring their efforts remain targeted and relevant.

Offer Incentives for Signing Up

Companies wishing to grow their email lists should give serious consideration to the idea of rewarding customers just for signing up. For example, a company that excites their customer base with a promise of a free gift upon joining their email community will likely do better than one with no offer. A gift can be anything from a sample of product to a favorable discount. However, it is important that the offer is unique and relevant to your target audience, and does much to entice customers.

Highlight the Value of an Email Subscription

While your company's email newsletter may not be for everyone, who is going to know if you don't express the value it provides? Simply put, don't just create a form and place it on the side or bottom of your website expecting anyone and everyone to sign up. Instead, companies should focus on helping customers to understand the kinds of content they are going to receive via email, as well as the value of said content. For example, a restaurant that says "Register Your Email" isn't likely to do as well as one that says "Receive our weekly newsletter and get daily lunch and dinner specials, new menu selections, and other restaurant updates."

In Closing...

In closing, I wish to acknowledge that while I may not be a personal fan of buying email lists for the purposes of email marketing, doing so is certainly a viable option and one that many companies use. Purchasing email addresses for most industries and markets is easy to do, and takes very little time and effort. However, does this mean that purchased lists are as relevant and convert as well as "home grown" lists? I have argued against this idea, but would love to hear other points-of-views on the topic.

What do you think? Is one type of list better than the other? Which do you prefer to work with?

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9 Comments:

  1. I'm with you Karl. Home grown lists are the way to go.
    By Anonymous Dex Chen on September 21, 2012
  2. Hi Karl. Great post! Don't forget to add in the time & cost caused by too many spam reports coming from purchased lists.
    By Anonymous Carrie Hill on September 21, 2012
  3. Thanks for the comments!

    @Carrie: Great point! As with most things cheap and easy there will likely be a setback or two. Buying email lists is of no exception. I don't deny that.
    By Blogger Karl Ribas on September 21, 2012
  4. Karl, is there a better time to use purchased lists instead of built lists? I was thinking maybe during the holiday season or other peak seasons.
    By Anonymous Bill Kemp on October 05, 2012
  5. Hi Bill, I'm of the mindset that there's never a good time to use an email list that wasn't built in-house. While, I can understand your reasoning for wanting to reach out to a larger audience during peak shopping times, it still comes down to the the idea that purchased lists, no matter how relevant the seller claims, will not work as you need them too.

    Instead, stick with your home-grown list and focus on crafting the very best messaging possible as a way to boost sales during peak times.
    By Blogger Karl Ribas on October 05, 2012
  6. You are absolutely right, Email marketing plays an integral role in many of today's most successful online companies. Thanks for sharing
    By Anonymous Anonymous on February 27, 2013
  7. Thanks! I appreciate your feedback!
    By Blogger Karl Ribas on February 27, 2013
  8. Karl, great job explaining both sides of the argument, building vs buying. Like you, I tend to favor the "home grown option". Great stuff, keep it up!
    By Anonymous Karl Greggory on March 08, 2013
  9. Thanks Karl! I'm glad you agree. BTW, that's a great name you've got there! ;)
    By Blogger Karl Ribas on March 08, 2013

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