B2B Email Marketing: Why renting third-party lists is among the worst tactics
I heard an offhand comment the other day from an agency marketer who said most of her B2B clients focused their email marketing on rented third-party lists (despite her advice). I thought to myself, “Really? That can’t be very effective.” I looked at some data and found I was right.
Although 46 percent of B2B email marketers use third-party lists:
- Only 11 percent score the tactic at “four” or “five” on a five-point scale of effectiveness, with “five” being the most effective, according to the MarketingSherpa 2011 B2B Marketing Benchmark Report.
- 57 percent score the tactic at “one” or “two”
These numbers almost completely reverse when we look at B2B marketers emailing to a house list. About 95 percent of B2B email marketers send to their own lists.
- 67 percent consider the tactic a “four” or “five” in terms of effectiveness on a five-point scale, with “five” being the most effective.
- 5 percent consider it a “one” or “two”
For me, these stats help underline the point that high-quality email databases are workhorses in marketing departments, and that marketers need to steer away from thinking about email marketing as advertising.
Love and Respect Your Audience
To elaborate on a point that Brad Bortone made in yesterday’s post, I would like to emphasize that effective email marketing is based on relationships. These relationships hinge on expectations, promises, and trust.
This might sound like fluffy marketing-speak, but bear with me. Specifics are coming.
First, people have expectations when they opt into your email program. You need to clearly set these expectations during the opt-in process by describing:
- The content they’ll receive in your program
- How often they’ll receive emails
Once they opt-in, you’ve officially promised to meet these expectations. If you fulfill your promise and only send what they’ve agreed to, that will build trust. Subscribers will trust your emails will have something they want. That trust translates into higher open and clickthrough rates and helps build an effective program.
If you move outside of the expectations, you are assuming subscribers want something else. You’re breaking your promise, harming your relationship, and undermining trust. You’re encouraging them to click “spam,” ignore your emails, or (at best) opt-out — none of which are good.
So you cannot assume people want your emails. You have to clearly set expectations, keep your promise, build trust and establish good relationships to get good results.
Email Marketing is Not Advertising
Strong email relationships can only come from your house list. On a third-party list, their expectation is to not hear from you. They never opted-in. You’re assuming they want something they’ve never asked for, and you’re encouraging them to click “spam.”
Sure, sending to third-party lists can work. But look at the data above. You’re likely better off investing in your database, segmentation, and relevance.
The mindset that “we’re just going to reach people, even if they’d rather be doing something else,” is an advertising mindset. That’s what marketers do on television. I’d rather be watching Pawn Stars, but instead I’m stuck watching ads.
Advertising is great, but it’s not good email marketing. Good emails are anticipated by subscribers and are relevant to their needs. This is why a good house list is so valuable. Bad emails arrive out of nowhere and interrupt people when they’re doing something else. This is why emailing third-party lists is among the least-effective B2B email marketing tactic today.
Related resources
MarketingSherpa 2011 B2B Marketing Benchmark Report
Chart: Top tactics organizations use to improve email relevancy
Email Deliverability: Always test emails that link to third-party sites
MarketingSherpa Email Marketing LEAPS Advanced Practices Workshop
Categories: B2B Marketing, Email Marketing b2b, Email Marketing, renting lists
Great post, Adam. I’ve added a few thoughts at The Radical Ear: http://bit.ly/jsPLSk
As you write, marketing is based on establishing a relationship based on trust. Moreover, the names on your list will have a few facts, but not the essential information – the problem your prospect is trying to solve. It takes real engagement and good profiling to get to that point.
THANK YOU! Every six months I have to have this same conversation with clients who view rented and Internet-compiled email lists as free/cheap ways to reach new audiences. But they never think about the cost these tactics have on our brand. Forwarding your blog to them now…
A good article on an important topic that still, incredibly, comes up quite often.
For a few more words on the subject of third-party email lists, please consider reading my blog post, which you can find here:
http://www.inboxinteractive.com/2010/09/buying-or-renting-email-lists-things-to-consider/
Thank you, and again, nice article.
Adam,
When I was client side, I did have some success’ with renting 3rd party lists. I would not label it a worst practice unless companies don’t do it right. A lot has to go into something like that in order for it to work, but I would not certainly not knock it until you try it….and try it with caution and careful planning.
Andrew Kordek
Co-Founder, Trendline Interactive
A Cross-Channel Messaging Agency
Twitter: @andrewkordek & @trendlinei
Email: andrew@trendlineinteractive.com
Interested in your comments on custom/dedicated emailblasts working with/using a B2B pub list. In that case you are operating on the borrowed trust their readers have in the publication. I think it would come out somewhere in the middle in terms of performance depending on a variety of factors.
Many people still think that email is a fast and easy way to get the word out about a product, service, or event. Email isn’t advertising because they won’t necessarily be exposed to your email unless they open it, either to mark it as spam or unsubscribe. In advertising, more than likely they will be exposed to it if it’s broadcast in tv, radio, or other mass media channels.
Nothing beats a house list, but the challenge is how to grow your house list. Many marketers find third-party email marketing services are a very effective way to do so.
There is a wide range of quality in third-party services. The best services use emails of individuals who have granted permission to receive third-party offers germane to their interests.
Using high-quality third-party services to send well-targeted messages with compelling offers, deployed with state-of-the-art technology does in fact generate positive ROI.
Adam,
Your info is interesting and enlightening as far as it goes, but I prefer open rates to marketing groups’ opinions. It’s a good proxy, but I’d just rather go to the source.
Do you know of any studies that actually look at open rates for purchased lists? I would really love to have this data in my back pocket for when I need to direct clients away from purchased lists.
Keep up the great work!
@Andrew Kordek
Hi Andrew — Thank you for your comment. Emails to third-praty lists can bring a positive ROI. With that said, our research has found that other tactics that are opt-in-based can be more effective.
@Marcia Chocinsky
Hi Marcia — Thank you for your comment. My assumption is that such a campaign could work. My advice would be to test it (of course), and to be sure to find the most relevant partners and audiences possible.
@Terry Nugent
Hi Terry — Thank you for your comment. You provide a sound argument. Renting third-party lists can achieve a postive ROI.
Thank you everyone for your comments! Your contributions are appreciated.
I would like to add that marketing is a broad profession that crosses many industries and audiences. The data in the post do not represent the only ways to find success. They show us which tactics B2B email marketers are finding to be most effective on average. There is, of course, variance in these averages.
It’s surprising that people still think rented lists will be a successful tactic – in 15 years of online and email experience, I’ve yet to see results that show this as an effective approach. I’m happy to be proven wrong, but I’ve not seen it.
Providing relevant content is key – despite the numerous pronouncements that email is old news and no longer works in the era of social media, the relevance and fulfillment of the promise is what delivers customer value, whether that is through email, or social. Recipients, followers or fans – all respond positively to relevant, useful content.
I agree with @Brad Einarsen that this would have been strengthened by data on open rates. It would also be important to know more about why those who reported on its ineffectiveness had actually undertaken such an effort. Told to by a boss? Persuaded by a list seller? Seemed like a sure win at the time?
Once again you blame the medium instead of the lack of experience on the part of the marketer. 3rd party lists can work, sure not as well as an inhouse list, though I’ve even seen this axiom broken. Expectations along with the offer, timing, the source all have to work together.
I don’t think anyone would disagree that a house list is the best vehicle and gets the best results. However you seem to make it and either or and it cetainly is not. We regular used targeted, focus list as an additional tactic to bring more folks into the house list and add to the list. Rented are purchased from reputable sources that match our specific target segments. We get results that are measured and scruntinized reguraly.
@Sue T.
Hi Sue — thank you for your comment. Regardless of cause, house lists are routinely reported as superior to third-party lists, as evidenced in this data.
@Jean Schaeffer
Hi Jean — thank you for your comment. Despite common agreement that house lists typically outperform rented lists, some marketers still focus their email programs on the latter. My assumption is that these marketers could see greater returns by investing in their house programs rather than continuing to focus on renting.
I have to agree with you Adam. The internal house lists performs the best, yet the building of the house lists require data mining or advertising. Email List Rental is an effective way to build that internal list. I would only suggest using trusted partners. I have seen many successful email list rental campaigns over my time. If your interested in knowing some trusted sources, feel free to reach out to me at any time.
Nice article – informative, short and to the point. I hope other businesses will “get” the message and develop those important relationships.
Very informative article. Thank you for the reminder! As a newbie to marketing (digitally), I have a small list and know that I must grow my in-house list if I want to create an online business lifestyle. So, there is a constant temptation to (as you said) “reach people” in the hopes that they might opt-in to my list and become a source of income in the future. And one of those ways is to get one of my ads injected into someone else’s email messages to their list. Having said this, the key word here is “temptation”. We must resist this temptation to advertise to people who have not agreed to hear from us. The only people I want on my list are those who have agreed to be there. There is a pride in knowing that the people on my list actually want to hear from me. And this gets me excited to actually deliver value-added content and support focused on my niche, which is exactly what I promised.
Nice perspective. It is true that emails are not welcomed well by third party lists; however it is still an effective way to announce your products. Email blasts may not be as effective as advertisements on television or anywhere else, at the same time neither do they cost as much. The goal is to spread information about the product, in hope for new opportunities. Renting from good companies can in a way guarantee that you are reaching potential customers and a good target market. We ran a campaign through frescodata and got a pretty decent response for the campaign. Few people did unsubscribe from the mails, but we got a lot of inquiries for our products.