When to Buy, Rent or Build business contact lists?

Tweet

 

B2B marketers often face this dilemma in the quest of a perfect list.  How do you decide and where to start when it comes to finding that ideal business contact database? The search may not be as elusive as it seems if you map your list needs to what is available in the marketplace. Evaluate the following to determine what type of lists you need.

1. Your target market: Size, Industry, Geography etc
2. Personas of decision makers: Title based or Role Based?
3. Type of marketing campaign: Telemarketing, Email marketing, direct mail or multi-channel?
4. Available List resources: List Vendors, list brokers, in-house staff, list subscriptions, custom list providers etc
5. Hygiene of existing databases: Relevance, accuracy, reach and depth.
6. Speed to market
7. Your appetite for new data: Volume and frequency of your list or data needs.
8. Budget

Now let us evaluate some of the options available in the marketplace.

Buying the list: The business-to-business list industry has really matured in past few years. Customers can now choose from online subscription based list downloads, barter the contact lists; have a custom list emailed by a vendor specializing in niche industry specific databases etc.

Companies like Jigsaw, Hoovers, Dunn & Bradstreet, Zoom info, One Source, Info USA etc serve a generic list market, offering inexpensive lists.  A few other companies like Demand base, Lead411, NetProspex, Harte-Hanks etc also offer similar business contacts databases with some extra services and specialization.

Most of the above companies encourage a subscription based pricing model. A few companies offer contact-trading option also.  Once you sign up, you can search and do some degree of customization on the list you want to buy. In general it is a DIY (Do IT yourself) approach for small to mid size buyer.  The sources of their data include crowd sourcing, Internet crawlers, public records, telephone directories and in some cases research. Most of the companies claim to have millions of records in their database and offer free replacement guarantee for bad or invalid contacts. The prices are tiered to volume and can range from $0.25/ record to $2.5 record.

Other sources of business to business list purchase include companies specializing in industry specific data like IT, Telecom, Retail, Software, Manufacturing, Non profit, Insurance etc.  Database brokers are a good resource in case you are trying to buy a unique list or do not have time to deal with multiple vendors.

Though a lot of choices exist for North American business databases, there is a clear gap in the market for International business lists, especially from EMEA. Most B2B list providers located in foreign countries lack the sophistication that we are used to seeing in USA. Only a few specialized list companies within USA have robust business contact databases for European and Asia Pac markets.

At some point the B2B data industry becomes a little convoluted with instances of some of the list vendors buying data from each other or from same external source. This leads the B2B marketer to same data irrespective of the list provider and can pose a challenge in large list acquisitions.  It is very important to de-dupe the data and identify net new unique contacts in the list.

Building a list:  This approach is more suitable for highly targeted lead generation campaigns where you need to target very specific title based or role based contacts.  Building a custom business list involves a lot of research and phone calls to identify the decision makers. You could build the list in-house or outsource to a list building company. Either way it is a time consuming and expensive exercise.  The pricing in this case can range from $3 - $10/ contact depending the complexity of list and volume. In some cases I have also come across business lists being sold for up to $20/ contact. The high cost of list however can be justified by the high quality of leads it brings.  We have seen about 40-50% higher response rates with phone verified, role based business lists.

In case you are not able to procure a list or need a role-based list for Europe, Asia Pac or South East Asia markets, building a list could be the only option. If you are using an outsourced vendor the price generally starts from $10/contact depending on the language and other complexities involved in list building.  Language plays a key role. For example it is easier to build a custom list in popular languages like French and German rather than Dutch and Slovakia. We recently helped a customer build a role-based business contact email list from 13 different language regions including Europe and South East Asia. It is important to note that the EU privacy laws make it very challenging to obtain emails for the business contacts. The toughest markets are the Arabic speaking countries from Middle East as the telephony cost to those countries can exceed the resource cost.

Inbound marketing is another way of building business contact lists by way of pushing traffic to your website. Once the visitor arrives, you throw freebies like offers, white papers, e books, webinars, 15 day trial etc to sign up.  The sign up form provides most of the information you need to further engage, nurture and convert the lead. The proponents of inbound marketing strongly advocate that it is the most reliable method and in fact there is no need to buy, rent and build lists from other sources. .  No doubt it is a very effective method of lead generation but not for list building. It can take months or years to accumulate the critical mass i.e. size of the list required for market penetration. Besides it can be a very expensive if you add the cost of creating offers, SEO, Landing pages, CTA buttons, Keyword research, Blog, white papers etc. If you are anyway doing all these efforts, sure enjoy the leads you get but do not rely on it as the only way to build business contact list.

Renting a marketing list: List rental is a standard practice in direct mail marketing and email marketing world. In this case you never own the business list and in most cases do not even get to see the lists. Back in the days the list rental companies used to simply rent the databases and at best execute the marketing campaigns for you. Over a period of time the industry players have transformed their business model to offer guaranteed deliverability, click thru rates etc.  Customers can easily negotiate for something like pay for performance or guaranteed lead. The rental list providers keep running the campaign till the target numbers of leads are achieved. The arrangement works fine with certain type of campaigns but the quality of leads can deteriorate over time.  Renting business lists may be more suitable for organizations that do not have necessary marketing infrastructure or in-house staff to design, execute and monitor campaigns. Also keep in mind that since you do not control or monitor the campaign execution, there is a risk of going off target. The advantage however is that one does not need to incur expenses on maintaining the database.

Using your existing databases: You can sure leverage your existing business contacts databases if you have kept them up to date. Remember about 5-6 % data goes bad each month. So if you have not performed any maintenance on your lists in a year, chances are that about 70% of contact data is bad. The good news is that you can bring your data back to life by having a database company perform a hygiene check and then weed out bad data, append missing or new data, remove duplicates, run email validity tests and also map with USPS - NCOA database etc. Services like title-density and gap-analysis can further help you understand your data better and also help you decide if you need increase the depth and coverage of existing list or buy new business list.