Pros & Cons: Buying vs. Building Your Email List

July 19th, 2017
Andrew BunyiCloud CIO

Email marketing is one of the most lucrative of digital marketing strategies. McKinsey & Company puts the average value of an email at three times higher than social media. Three-quarters of businesses report that email provides “good” to “excellent” ROI. Some report an ROI as high as 3800 percent.

But should you buy a list or build your own… or both? We’ll break down the pros and cons of each option below.

Buying an Email List

Pros

1. Instant gratification

It can take a long time to build your email list by hand. However, with a purchased list you have instant access to thousands – perhaps tens of thousands – of subscribers instantly.

2. Targeted lists

Email list providers have started fine tuning their list building options. It is now possible to filter addresses by location, interests, age, gender, survey responses, etc. Knowing exactly how your list was gathered can help you hone how you approach prospects.

3. More refined lists

By sending small batch emails to as few as 10 recipients, you can refine your list. Sending bulk emails can land you in the spam folder. With a purchased list, you can try out new tactics on smaller numbers of recipients until you have optimized your approach. Over 75 percent of email revenue comes from triggered campaigns as opposed to one-size-fits-all campaigns, according to DMA’s National Client Email Report.

email list

Cons

1. Price

The cost of buying an email list may or may not be a con for you. Depending on your budget and how many emails you want to buy, you can expect to pay anywhere from $200 (for 2,500 to 5,000 addresses) to $2,000 (for 25,000 addresses). Once you add in the cost of managing a list, most companies end up paying between $500 and $3,000.

2. Blacklisting

Buying a list of subscribers who have not opted in to receive emails from you can be the quickest way to end up on recipients’ blacklists. Not only are you more likely to alienate potential customers, but email service providers are also more likely to reject your campaign if you use a purchased email list. If you think you can dupe them by claiming your list is opt-in only, think again.

Not only are most email service providers experts at sniffing out questionable lists; many will require recipients to re-opt in before they can receive campaigns.

3. Out of date addresses

Purchased email lists are far more likely to contain out of date or bad email addresses. And you paid for each of those addresses – if you use an email service provider that charges above a certain level, you are probably still paying for each of those bad addresses.

Even if you are okay with a high bounce back rate, your email service provider probably is not. Once your email bounce back rate goes above a certain level, it may start raising red flags.

If you do choose to buy a list, keep these tips in mind:

  • Use a reputable vendor: Look for transparency and reviews when selecting a vendor: transparency from the vendor itself in how it acquires addresses and reviews from others who have used the vendor.
  • Look for cost-per-lead: Instead of paying a flat rate for a bulk list, look for vendors who charge per (valuable) head.

email blacklist

Building Your Own List

Pros

1. Higher quality addresses

If you’ve built your own list, each subscriber should have opted in at some point, meaning they genuinely want to hear from you.

2. Improved deliverability

Reducing the number of inactive addresses can immediately increase your deliverability by up to 5 percent. Building a list from scratch is the most sure fire way of keeping inactive addresses off your list.

3. Lower cost

If you maintain it, an organic email list can save you money by not wasting valuable subscriber counts on outdated email addresses or recipients who send your emails directly to the Spam folder.

building an email list

Cons

1. Slow

Perhaps the biggest complaint against building organic email lists is the time it takes for them to grow. If you purchase a list, you have access to thousands of names with the click of a mouse.

2. Requires effort

In addition to the time cost, there is a higher effort involved in creating your email list from scratch. You’ll need an established sign-up form, perhaps an enticing opt-in offer, and – most important of all – a method of reaching your target audience.

3. You need to know how

Perhaps the biggest hurdle to building an email list is knowing how to go about it. If you are not a marketing pro, it can be hard to even locate the starting line, let alone keep up in the race for more subscribers.

If you choose to build a list, keep in mind it is still only as good as your maintenance. It is up to you to keep your list in peak shape. Here are a few tips on how to manage your customer email list:

  • Use web analytics: If you built your list from scratch, you should have access to analytics from your website that can help you better connect with your audience.
  • Use groups: Segment your list into groups for more targeted campaigns. Groupings can be by age, location, interest, purchase activity, or whatever your email service provider offers.
  • Add your groups to your sign-up form: Make your life instantly easier by letting your subscribers choose the groups they belong to.
  • Use double and re-opt ins: To keep your list from becoming outdated, ask subscribers to do a double opt-in at sign up and then to re-opt in periodically.

The Bottom Line

Whether you buy or build your email list, it always comes back to maintenance. All lists require that you keep them clean. Go through bounce and open rates regularly to flush out any stale email addresses. You either paid for or worked hard to build this list; don’t waste valuable resources carrying old email addresses in your deck.