Buying vs. Renting a List
In direct mail and e-mail marketing, you have the option to buy or rent a mailing list. Each option has its advantages and disadvantages. You can buy a mailing list from a list owner. The advantage of buying a list is that purchased lists are often less expensive than rented lists. Companies like ZoomInfo, Spoke, and Hoover’s have gone through the trouble of compiling lists of contact information for people in certain demographics. Once you give them a set of criteria, they can create a list of target customers for you based on information they have collected.
Note: A list owner is a company that specializes in compiling mailing lists for e-mail and direct marketing and/or contact lists for cold calling. A list manager is a company that sells or rents these lists on behalf of the list owner. It used to be that list owners always turned their lists over to list managers to handle the sales or rentals, and marketers dealt exclusively with list managers. But now, some list owners are handling their own list sales or rentals. So you may deal with either a list owner or a list manager when buying or renting a mailing or contact list.
The main disadvantage of buying a list is that purchased lists are often less accurate than rented lists. A purchased list will often have more invalid or out-of-date mailing addresses, e-mail addresses, job titles (if it’s a list of businesspeople), and other information than a rented list will contain. The reason is that the owner of a purchased list usually has no direct relationship with the people on the list. Often, the people on the list don’t contribute their contact information directly, and they don’t know that the list owner has collected that information.
For example, let’s say a list owner chooses to compile a list of executives in various positions at software and high-tech companies, ranging from Fortune 500 companies down to small startups. They will build a “crawler” program that will search websites and extract the names of major executives, along with their contact information. But there are so many software and high-tech companies that it may take the list owner a year to map enough data to be useful to marketers who buy their lists.
Two years later, you ask the list owner for a list of 1,000 e-mail addresses of sales executives at software companies with 500 or more employees. They will give you a list based on information that was gathered two years ago. But during that time, some of the sales executives on the list are likely to have moved on to other companies. Or they may have left the sales department and taken on other positions at the company. Usually, the list owner has no way of knowing of such changes at each company on your contact list. Some phone numbers or e-mail addresses on the list may turn out to be inaccurate, or some contacts may no longer fit your criteria as target customers.
Instead of buying, you can also rent a mailing list. When you rent a list, you pay a fee to use an existing list for a single campaign in order to reach your target audience. Often, the owner of a rented list has a relationship with your potential clients, and therefore has a sense of their demographics and buying behavior. For example, Nike may rent out the list of subscribers to Tennis magazine, an obvious target audience for athletic gear. Dell may rent the Forbes subscribers list to high-tech marketers who want to reach small-business owners. Marriott Rewards may rent the Conde Nast Traveler’s list to marketers who are targeting people interested in traveling.
A rented list is usually more expensive, but it also tends to be more accurate and more targeted to the right demographic. For this reason, a rented list is often more cost-effective in the long run. It gives you a better chance of getting your message to your target audience.
Note: In cold calling, you can only buy a contact list; you don’t have the option to rent one. I’ll explain why in Chapter 14.