It’s a dirty secret of the direct marketing world that too many businesses buy and sell customer lists with very little care. As a sender, you probably receive gray-market offers every day to rent or purchase lists of addresses.
Some of these might even be advertised as “opt-in” lists. Spoiler alert: they’re not. Even if a customer might have opted into one vendor’s mailings, they haven’t opted into yours, and the global anti-spam community doesn’t consider permission to be transferrable.
As tempting as pumping up your list volume might be, don’t do it. The risks to your reputation and business from relying on lead generation or marketing list vendors are high. Here are seven ways this shady business could hurt you.
7 Reasons Buying Subscriber Lists is Risky Business
- High unknown user rate. Lead and marketing lists are sold by quantity not quality. Unfortunately, vendors that sell or rent lists are not always honest about the quality or true nature of opt-in status. The only way to assure that a subscriber is current, real, and has truly opted in is to do it yourself through standard channels such as web-form signup. ISPs see a high spike in unknown users as a negative flag on your reputation and will block or send future messages to the spam folder.
- Spike in spam complaints. You are not the only marketer that the list has been sold to or rented to. Subscribers who suddenly start getting an influx of messages they didn’t opt into will unsubscribe, or worse, report them as spam. You will see a high spike in complaints or feedback loop reports, as well as unsubscribes. ISPs see this as a surefire reason to be very skeptical about your future mailings.
- Low opens and clicks. ISPs have become increasingly sophisticated in how they look at user engagement when assessing bulk mailings. Data they assess have moved beyond bounces, complaints, unsubscribes to also include opens, clicks, and other behavioral statistics. ISPs are measuring the quality of messages to decide whether to allow you to continue sending to their subscribers. Having a low open/clicks ratio is a good indicator that your messages will land in the spam folder.
- Violation of terms of service at your ESP. Email service providers often prohibit the use of purchased or rented lists, or sending mail to recipients who have not opted in. Violating these policies will give an ESP the authority to terminate your contract. (SparkPost is no exception. We only allow opt-in messaging. See policies for details on SparkPost’s Messaging Policy.)
- Scoffing at ISP best practices. ISPs expect senders to do the legwork and to follow the best practices they’ve documented. They will block any sender that does not comply. Most major ISPs offer a postmaster support site that details their expectations. Across the board, opt-in—and often double opt-in—is required by the ISP.
- Drop in ROI. Email marketing is a business, and there is a cost for every message sent. However, with that investment, you’re banking on a return. Sketchy lists not only have an absolutely lower response rate, reducing your ROI, but the risk compounds significantly when the effect of bounces, unopened deletes, and spam flags are factored into your sending reputation. These negative statistics suggest to ISPs that your future messages should be blocked or filed as spam. If even your most interested subscribers don’t receive your message, your ROI will plummet.
- Real legal jeopardy. With today’s global economy, major ISPs have a global presence and provide inboxes for people around the globe. AOL, Apple, Gmail, Hotmail, and Yahoo all provide webmail services to people in many countries. You may intend only to send to local recipients, but unbeknownst to you, a subscriber might be located in a country with a strict legal requirement for opt-in. Both Canada and the European Union have laws that strictly regulate commercial email delivery. In both cases, the regulatory framework requires express consent through an opt-in—opt-out isn’t good enough—and they provide for punitive remedies if violated. In Canada, CASL violations can require you to pay an administrative monetary penalty of up to CAD$1 million per violation for individuals, and CAD$10 million for businesses. In the EU, violations of the Opt-In Directive can result in fines of up to €500,000 for serious breaches of the law.
When it comes to deliverability and customer engagement, quality always trumps simple quantity. Don’t take a risk on the unsavory practice of buying third-party lists.