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Bought Leads Are Not Leads: Why Buying a List is Never A Good Idea

This post comes from our Inbound Marketing Channel sponsor, HubSpot. Please visit them to learn more about their revolutionary marketing automation SaS offering.

I was recently asked my opinion on when a company should buy a list of names. My response was this: buying a list is never a good idea. Buying a list of names to cold call or email isn’t the same thing as creating leads. Real leads have, at some point or another, interacted with your brand. They may have downloaded interesting information, or asked for something from you, or even contacted your sales team. They want to know more about your brand, product, or service. Why is purchasing a list different? The people on this list haven’t opted in to anything from your company. They may not even know you exist!

Why Shouldn’t I Purchase a List?

Thinking that purchasing a list is how you do marketing is an extremely costly mistake for many reasons. Not only do you risk harming your brand reputation because people don’t like getting unwanted communication, but you risk having your emails end up in spam filters. This will lower your sender score, which damages your domain’s ability to end up in people’s inboxes in the future, even for legitimate emails.

You are probably also breaking the law when sending people emails that have not been solicited. The CAN-SPAM Act (Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003) outlines the rules for commercial emails. This gives email recipients the right to unsubscribe to emails they do not want. Companies that do no honor these wishes may be forced to pay huge fines per email violation. This law also explains the requirements for subject lines, to and from lines, and other personal information, to avoid sending misleading information.

Names from a list also have lower close rates and conversion rates. Why? Because the people you are targeting are a harder sell and they have no interest in your product or service at first, so you will need to not only educate them about what you do, but also convince them they should buy. If they’re unwilling to even open your email, this education cannot happen — and this will not make your sales team happy. Attempting to sell to people who are not leads, have no interest in your product, and didn’t invite the conversation will result in lower sales numbers.

Marketers may think that buying a list is a quick fix for generating leads, especially for teams that think they don’t have the time and resources to build a list of their own. But the definition of marketing isn’t pitching and selling to anyone you can force to listen, but building relationships with customers and potential customers. Creating love for your company requires some work and time.

What are My Different Options for Building a List?

You cannot have a list that is generated quickly, is low cost, and is high engagement, but you can have two out of the three. Each has advantages and disadvantages

Looking at that chart, it’s clear that list purchasing provides no strategic advantage over the other options I’ve presented. Utilizing inbound marketing creates the most sustainable list of re-generating leads out of the three options, and also costs the least amount of money. Continually building your own list through inbound marketing is the best long-term solution for your company.

Information I Will Never Forget:

So what should you take away from this? Lists you have created on your own are always of higher quality, and contain actual leads. They came looking for you! What could be better? These people are more likely to close at higher conversion rates.
Always consider the situation you are in. Do you need leads immediately? Maybe pay per click advertisements could serve as a good short-term complement to launching your long-term inbound marketing strategy. PPC-generated leads can be faster to generate than through inbound marketing, though pricier and not always as reliable. To make sure you’re getting high quality leads through this venue, though, offer them a piece of content, such as an Ebook or whitepaper, in exchange for their contact information. This content can also be used to bring in organic inbound leads at a later date.

In short, ask yourself this question: buying a list may give you a lot of email addresses in the short term, but how many of them turn into leads and customers? How many people did you upset by sending them spam, therefore decreasing your reputation and sender score? Your ROI will be much higher when you put the effort into creating an awesome inbound marketing campaign that attracts the right people to your company. Did you know that inbound leads cost 62% less than outbound leads? If you’re still thinking you don’t have the time to do inbound marketing, I urge you to reconsider. Your marketing team, sales team, and finance team will all thank you in the long term.

About the author:

Mike Volpe is the CMO of HubSpot, an inbound marketing software startup, where he leads a team of marketers that work on the company’s lead generation and branding strategy through inbound marketing, including blogging, search engine optimization, video marketing, and social media.

  • A.C Bloy

    You’re right, you have to be great at SALES to work out bound. If you want to rely on waiting for business to come to you, you’re basically standing at the bottom of the mountain of money waiting for the pennies to roll down. That’s a philosophy that’s easy to recommend when you (yourself) need only refer to your credentials. The reality is buyers don’t become buyers until they talk to skilled professionals. Furthermore, as they are responding to your cleverly worded advertising, they’re responding to 4 or 6 other “entrepreneurial geniuses” just like you. A focused, aggressive attack (Smart work) will always beat being clever.