Getting a return on investment when you buy lead lists

Discover the keys to successful lead generation by buying leads online – Learn when and how you can use these prospects effectively.

By Jon Arancio, Vice President

Getting a return on investment when you buy lead lists

Successful lead generation for small businesses using professional lead lists comes down to planning.

What is a list provider? How do they create lists?

List providers are businesses that sell marketing data for commercial purposes. They have the ability to segment their lists and offer some kind of targeting so that they can provide useful information to many potential purchasers of lists. Where that data comes from varies. Some providers may collect the information themselves (1st party) and while most derive their information from others (3rd party) who aggregate large databases. Your company can even build lists directly, independent of any outside organization. However, it may be most cost-effective to acquire lead lists from a list provider, particularly those who focus on a certain industry or market.

If you are interested in an overview of where the data comes from, this article provides an easy-to-read outline. The list of leads can come from surveys, purchase transactions, online and social media tracking, web forms, and extracting data from membership databases among many others. Larger firms like Google, Facebook, and Amazon collect their own data. When a business is looking for raw data to market to, they may be dealing with lists that are put together from multiple sources - demographics from one source, email addresses or phone from another. The end product is intended to be of value to as broad an audience as possible.

What is the cost of a list?

The pricing of the list is variable. If you are just interested in the data (a spreadsheet) the cost will depend only on how targeted, how accurate, and how large is the list you are buying. Brokers tend to be negotiable and often want to add more volume to improve the rate. Generic business leads would be low cost but few businesses would want such unfocused data. More likely a business will have a specific type of client in mind and will want qualified B2B leads targeted by industry, product consumption history, size, or geographic metrics. The more specific the data, the higher the quality of lead and the unit price.

Many of the larger list merchants offer more than just the lead lists. They provide an ongoing subscription so that they can offer you tools to use and manage the data. This can allow them to offer ongoing updates to maintain accuracy. Often, they will offer tools for advanced filtering, make available CRM integration (interfaces that do things like update or pass records to your CRM), show buyer intent, news alerts about prospects, and more. This enriches the data but may also complicate the implementation of your sales and marketing strategy as you have to incorporate the new vendor into your existing sales process.

We have observed pricing under annual subscription that ranges from $0.20/contact to almost $1.00/contact depending on the lead provider and subscription level. Buying leads from an independent broker should have similar pricing but no long-term commitment.

Cost of lead lists

Alternatives to lists

Purchasing leads and then making outreach is pretty straightforward, but is not the only means of collecting data. Before we discuss the specific benefits and costs of the list approach, let's consider our other options:

  • Organic lead generation tools - set up SEO content on the web, and do promotional activities (ads, podcasts, etc.) to make connections. This takes longer to see results and requires internal resources to maintain it but is a good alternative to generate leads and is higher quality data.
  • Outsourced lead generation services - you can hire firms to do cold calling or other types of outbound marketing for a fee. It can be effective but generally carries a high cost to implement.
  • Pay per lead - rather than buy sales leads lists, you can acquire lead information from others who survey or interview buyers. These companies pass on qualified leads for a specific inquiry in a specific market.

In the end, you may find a mixed approach works best for your investment. If you land on buying a lead list and managing your own marketing, here are things we've observed that may help you make a better decision.

Alternatives to buying lists

What makes marketing lists work?

Most purchasers put a lot of effort into getting really appropriate and targeted data at the lowest cost possible. It is worthwhile to acquire targeted leads for your business, but what you plan to do with the list once you possess it is more important.

So, early on you should confirm that once you buy business leads that match your industry, your lead provider's terms allow you to retain them and continue to contact those prospects. Read the agreement and make sure that there are no ongoing costs to continue using the data if your relationship with the list merchant ends.

Next, figure out your goal. Are you going to call these new leads, visit them, email them, or otherwise message them electronically? Business people get a ton of messages and calls. They are inherently hard to connect with and likely resistant to straight sales outreach.

Most marketers recommend providing content of value that would draw attention to your unique benefit.  We've seen this work when the content is repetitive (industry news) and relevant (really targeted). We've seen this not work when the sales lead lists are not highly targeted both to the right businesses and the right people at those companies.

So, the most important work is figuring out if your industry is something that the big marketing firms know how to segment. Law, healthcare, and construction are industries that are well known and have been carefully segmented by the list industry. If you are in one of these industries it will not be hard to find a law firm that specializes in agricultural real estate law.

When does lead lists work

For specific niches, the cost to buy lead lists may be at a premium because it can provide excellent results. If you sell cardboard boxes it may be more difficult to find a target list of relevant leads. Spend some time learning and sampling data from the lists that are provided as 'targeted' and make certain that they look like quality leads to you.

Once you have a plan for how you are going to use the lead database, you can evaluate the efficacy by testing a small list. The sellers often charge a lot for small lists but it is worth a test before investing too much in the effort. In our experience, construction and healthcare clients that we support have done well with industry-specific directories. These prospect lists contain contacts who speak the language of that industry and have needs for parts and services to keep their operations running.

When might this not work?

There may be many companies who should actually steer clear of lists, simply because the lead scoring of the providers may not match the reality of who you sell to. A maker of a small electronic parts may find uses in many industries. However, the broad use of this part may result in large lists of potential clients with a really small hit rate.

Furthermore, the technical news content that might drive interest in this part is probably only interesting to a very narrow audience even within companies with buying potential. In such cases, companies are likely to invest more in SEO. When the engineer who knows how to use this part needs one, your message will be in the right place and at the right time. Direct outreach may not be the right method unless you are targeting ads with your list, and coordinating your effort with your web content.

What should I do once I have the list?

Let's assume you operate in an industry that has been carefully documented by the list sellers. The contacts are appropriately segmented so that you can make the outreach to the right people. This might include messaging, focused search, or targeted ads. When you have the custom list in hand, your next step is to incorporate that list into your business follow-up process. The most important part of exploiting a list is not to send one message and be done. You want to fill your sales pipeline by incorporating regular touches with these contacts to generate interest over time.

To get started, you will import the lists directly into the CRM system in an initial batch or via some other automated integration such as Zapier. This makes quick work of the data entry and allows you to focus on the marketing and sales effort. In this scenario, you'd want to think about delivering a monthly newsletter about your industry.

We've had experience with some clients who made this type of outreach in the construction industry, specifically in building out retail stores and restaurants. They were able to generate content of interest to the designers and project managers they wanted to connect with, and keep a relevant stream of information heading their way, all the while building a business case for the products they offered.

To manage this, they stored the data in a CRM solution called Maximizer. The database was used to share the contact data with everyone from marketing to business development to sales and operations. On top of the marketing communications, the sales team could call and visit the same prospects and follow up on inquiries that came from the newsletter messaging.

Maximizer CRM: Everything You Need to Know

Maximizer CRM is the perfect tool to help you streamline your processes and increase productivity.

The data grew more valuable as each team member contributed to the contact history. Besides monitoring communications, the Maximizer users could generate reports on how the leads converted into sales opportunities (price quotes in this case) and how those opportunities led to sales. The original lead source was associated with the closed sales to inform marketing where to focus resources for future spending.

The client eventually defined a process for adding new contacts into the system so that there was an ongoing flow of leads and an ever-growing audience for the newsletter. This set up new prospects for the pipeline and proved to be quite beneficial for their business.

Therefore, purchasing a list is only the start of the process. Having a plan for the lifecycle of your leads is critical to making the investment worthwhile. Not all businesses will operate in an industry suited for this type of marketing. However, no business should invest in a list budget without some process to manage the outcomes. If you can't measure the benefit of the purchased data, you will not know if or when you should invest further for more data.

Where do we start to find lists?

The FastCompany article referenced above indicates that there were far more than one hundred 3rd party places to buy leads, not even including firms that collect their own data. Among these, here are a few names you are likely to see when doing your research.

  • Dunn & Bradstreet
  • LinkedIn leads
  • Uplead
  • ZoomInfo

Each has its own suite of tools that can help you create your business lead lists and some go further and help you manage it. The costs vary widely among this group and you may do better going with sellers who know your market well. Ultimately, you have to drive your list data into a system that qualifies and quantifies how much revenue the entire list generates. Only then will you be able to judge the value of the data and the expected profit.

Conclusion

There can be ongoing value in procuring lists for outreach, but this outreach should be in the form of a contact that they benefit from generally, and avoid making a regular direct sales call. Ideally, the content you present to your audience at regular intervals is focused on their needs. Your first objective is to measure whether the list process works in your industry at all.

To accomplish this, you must have a structured process of managing your communications - both mass messaging and individual contact. You must also assign the source of all leads and have that assignment follow the records straight through the sale. Importing your first batch of leads and flagging the source gets the process started. Yet, the critical step is to track your results. Having a CRM system where your team can interact with these leads and report on which ones are closing is the only way you will know for sure the return you get on this investment.

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Jon Arancio, Vice President

Jon is the co-founder and Vice-President of Wintec Group Inc., a CRM software reseller and application support specialty firm. He helps clients implement Maximizer CRM, and provides outsourced application knowledge to firms who need the additional skills sets but are not looking to add support staff for this technology.

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