List Rental vs. License for Ad Agency New Business Leads
Pay for single-use contacts or subscribe to a new business resource? Each has its purpose, pros and cons
I had a conversation the other day about renting email lists. The focus of the conversation was how to get the lowest possible cost per contact. What the new business person hadn't thought-through was what they wanted to accomplish, and didn't understand their choices.
As with most things, you get what you pay for. So, think about what you want, and then this short post may help you better understand what each option provides.
List Rental
Quality: mass email lists are gathered from a variety of disparate sources and are designed to be rented over and over again; they are generally known for being of relatively low quality. Smaller lists may be more targeted and higher quality.
Quantity: large lists necessitate your renting many thousands of names to overcome quality issues in the hope of getting enough responses to justify the purchase; smaller lists are intended for smaller mailings and may yield a higher response rate.
Purpose: Single use – for email (or direct mail).
Response rate: If you can get a 1% response rate on email you're really doing well; .04% is common. At the latter rate, if you want 100 leads, you're going to need to rent a list with at least 25,000 names.
Cost: $400-$500 per thousand names, or $11,250 at $450 per 1000.
List License
You can subscribe annually to some services.
Quality: Really large list databases are gathered from a variety of disparate sources; smaller lists may be more targeted and higher quality.
Quantity: Due to the number of companies and people in a really large database (when you start talking about more than a hundred thousand or millions of companies) quality control is very difficult. Smaller lists should be of higher quality and targeted for a particular industry vertical, geographic region, or discipline/function (e.g. IT).
Purpose: Ongoing use as a new business resource, one-to-one prospecting through telephone, email, direct mail.
Response rate: Should be much better than lists rentals.
Cost: $3,500 and up, depending on quality and the number of users who will have access.
Once you identify which type of services suit your new business needs, then decide on your service provider.
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