Is Buying Email Lists Worth It? Only if You Do It Right

Email marketing can be an extremely effective way to reach new customers and promote your business. But building and cultivating an engaged email subscriber list takes significant time and effort. This leads many businesses to consider buying email lists as a digital marketing shortcut to expand their reach quickly.

However, the quality of purchased lists can vary dramatically. And overly relying on bought lists brings legal, ethical, and practical risks.

So, is buying email lists actually worth it? The answer is: it depends.

When done strategically and ethically, buying targeted lists can supplement your marketing efforts, raise brand awareness, and be an effective lead-generation tactic. 

Understanding the basics

First, what exactly is an email list?

Essentially, it’s a database of contact information collected from people who have agreed to receive messages from your business. The end goal is to drive engagement and eventual sales.

The key components of an effective email strategy include:

• Compelling and personalised email content - effective cold email copywriting with targeted messaging that adds value for subscribers. 
• Automated workflows and segmentation - streamlined handling based on user behaviours.
• Analytics - tracking key metrics like open, click-through, and conversion rates.
• List building techniques - growing your subscriber base strategically over time.
• Deliverability monitoring - limiting issues like spam complaints and bounces.

The return on investment (ROI) from email marketing is calculated by looking at revenue driven directly from email campaigns compared to costs like software, creative work, analysts’ time, and list acquisition. The higher the revenue and lower the costs, the better the ROI.

Now, let’s explore the pros and cons of purchasing email subscriber lists.

The pros and cons

Potential advantages of buying email marketing lists:

• Immediately reach new potential customers - Buying an email contact list can help business owners find thousands of prospects to target virtually overnight. 
• Low initial cost - Building your own lists organically takes substantial time upfront before seeing results. Buying established lists gets your foot in the door faster at a lower starting cost.
• Targeted demographics - Some list providers sell very targeted lists, allowing you to hone in on specific customer demographics like industry, seniority, geography, etc. This helps increase relevance.

Potential disadvantages

• Lower engagement - If recipients never actively opted in to your brand, open and click-through rates tend to suffer. Purchased lists often seem spammy, as receiving unsolicited emails is increasingly common and can hurt your brand reputation, with recipients often feeling victims of spam.
• Higher unsubscribes - Many bought list recipients will quickly unsubscribe or even report your messages as spam when disinterested. This raises email deliverability challenges.
• Higher bounce rates - Email formats and addresses from external lists often end up outdated or inaccurate, spiking bounce rates.
• Legal and ethical issues - If list origin and opt-in consent are questionable, this opens you up to spammer complaints, privacy violations, and fines.

As you can see, the quick wins of expanded reach by buying lists come with substantial engagement and compliance tradeoffs. 

Next, let’s explore some of these key considerations around ethics and regulations when using purchased lists.

Navigating legality and ethics considerations

Email marketing is heavily regulated to protect consumer privacy while enabling legitimate business outreach. So marketers must closely follow best practices around consent, transparency and self-regulation.

Bulk purchasing a list of emails without clarity into their origin introduces major ethical and legal pitfalls, including:

• Spam complaints - Purchased lists are often seen as spam by disinterested recipients, spurring complaints and impacting the sender’s reputation and deliverability.
• Privacy violations - Lists lacking clear opt-in consent put senders at risk of privacy lawsuits, especially under policies like GDPR.
• CAN-SPAM Act violations - Using purchased lists could easily violate laws around honouring opt-outs, transparent sender details, and even border on identity theft in worst cases. These laws include the European General Data Protection Regulation Act (GDPR) and the CAN-SPAM Act.

To mitigate these risks, you must take extreme care when acquiring external email lists:

• Vet list providers thoroughly - Confirm solid first-party opt-in consent procedures, deliverability reputation, and responsible data practices.
• Review email address list sources - Dig into where the provider obtained data, like website sign-ups, public directories, etc. Avoid lists from shady origins, and make sure the target audience aligns with your offering.
• Confirm opt-in, not just opt-out - Recipients must have actively agreed to receive your type of outreach from new senders.
• Honour opt-outs - Immediately remove any purchased recipients choosing to unsubscribe going forward. No exceptions.
• Publish complete contact details - Legally required for commercial messages under CAN-SPAM.
• Consider double opt-in - Requiring confirmation before sending to newly purchased list subscribers limits spam complaints.

While bought lists can be used ethically and legally with proper precautions, even legitimate ones tend to see lower engagement from disinterested recipients. 

So, is it worthwhile to pay money to reach an audience that’s unlikely to care about your emails? Let’s break down the cost considerations.

Evaluating email list costs vs. potential ROI

To determine if paid list acquisition makes financial sense, you need to objectively weigh your expected return on investment (ROI) compared to costs. Typical expenses include:

• List purchase fees
  • Small, targeted lists - $500+
  • Large generic lists - $5 per thousand
  • Segmented vertical lists - $50+ per thousand
• List hosting, hygiene, and management - Tools and services for updating, cleaning, and maintaining purchased lists run around $100+ per month.
• Email marketing campaign software - To send at scale, robust email service providers start around $50+ per month.
• Creative and analytical labour - Whether in-house or outsourced, building and optimising email campaigns requires substantial strategic work.

The ROI of these expenses ties directly to the revenue driven by converting purchased list subscribers into actual customers. It’s important to consider how your business capabilities can optimise the return on your investment.

Benchmarks vary dramatically by industry, but average email open rates tend to run 15-25%, click-through rates around 2-5%, and conversion rates from 0.5-5%.

For purchased “cold” lists, engagement metrics typically trend 50-75% lower. After accounting for deductions from aggressive unsubscribes and spam complaints as well, your usable purchased lists might realistically drive:

• 7-15% open rates.
• 1-3% click-through.
• 0.1-1% conversion.

Building first-party lists organically through tactics like lead nourishment, website sign-ups, etc., is slower upfront but pays dividends in the long term with 3X+ higher engagement.

Still, if high-quality purchased lists expand your reach enough, even the slightest boost in conversion could drive worthwhile returns. Just ensure you carefully weigh potential costs against your expected customer lifetime value.

Moving forward, how can you best determine if your email campaigns with purchased lists are succeeding? Let’s explore the key metrics for tracking performance.

Measuring the success of email campaigns

To maximise results from any email outreach - either to purchased or organically built lists - you need to monitor user engagement and conversion metrics closely.

Key indicators to track include:

• Open rates - Percentage of recipients opening your messages, ideally benchmarked to industry averages.
• Click-through rates - Percentage clicking links within emails, revealing interest and readiness.
• Conversion rates - Percentage actually driving desired goals like purchases from message sends.
• Bounce rates - Percentage triggering email delivery errors from invalid or outdated addresses. Aim to keep under 5% and always check the validity of email addresses.
• Unsubscribe rates - Percentage of choosing to opt out of future messages. Shoot for under 0.5%.
• Spam complaints - Recipients mark emails as spam, which can severely damage the sender’s reputation and deliverability. Goal of 0%.

Purchased lists often skew way below industry benchmarks for open rates, click-throughs and conversion while spiking negative metrics like bounces and unsubscribes.

If multiple email campaigns still show poor engagement, it’s a sign that a particular purchased list is no longer worthwhile continued investment. 

Key indicators to watch for include:

• Open rates below 10%.
• Click-through rates below 0.5%.
• Conversion rates near zero.
• Bounce rates above 10%.
• Unsubscribe rates above 2%.
• Any spam complaints.

Lists meeting several of these thresholds are unlikely ever to drive positive ROI. As quality crumbles, it may be time to cut losses and either refresh or fully replace those underperforming purchased names.

Speaking of quality, what’s the best way to build strong email lists over the long run?

Taking the time to build email lists organically

Buying lists offers a quick short-term boost. But crafting your subscriber base slowly and organically over time pays off big time for engagement and conversion.

Effective ways to build quality lists from scratch include:

• Lead nurturing - Drip campaigns turning interested prospects into engaged subscribers.
• Content upgrades - Offering exclusive materials in exchange for contact info.
• Website sign-up forms - Popups and embedded subscription boxes on landing pages for website visitors to engage with.
• Event and webinar promotion - Attendee acquisition for future re-targeting.
• Social and external promotion - Cross-channel collaborations to drive list sign-ups.
• Customer referrals - Incentivising existing patrons to refer peers.

Organic list building takes serious upfront effort but lets you hyper-target specific demographics more likely to care about your emails. These recipients convert at exponentially higher rates through tailored, personalised journeys.

It’s best to combine organically grown lists with small volumes of purchased names. This is a strategic “hybrid approach” that balances quality and quantity in your list development efforts.

Speaking of which…

Finding the right quality vs. quantity balance

Should you focus on rapid email list building at nearly any cost or concentrate exclusively on cultivating ultra-targeted engaged audiences?

The truth lies somewhere in the middle. Larger lists, even with only marginally interested segments, can still drive significant revenue simply due to wider reach. However, considerably smaller yet passionately engaged followers typically convert better long-term through customised nurturing and effective marketing.

Ideally, marketers should aim for balance - steadily expanding subscriber volume via strategic paid supplements while intently building first-party enthusiasm and loyalty.

The brands enjoying the most success with email marketing efforts have cultivated this harmonious fusion, understanding that even moderately engaged at scale leads to sales. But loyal followers drive exponential growth as brand ambassadors over the rest of their often decades-long customer lifecycles.

Wrapping up

So, in summary - is buying email lists actually worth it?

The answer depends entirely on your growth goals, target metrics, expected ROI, and ethical comfort.

Purchased lists can provide short-term supplements to expand reach if carefully vetted and legally compliant. But engaging organically built first-party lists drives more conversions in the long term.

Aim for the best of both worlds - modestly supplementing owned lists with paid names while focusing on hyper-targeted lead nurturing. This balanced approach maximises the advantages of each strategy.

Just remember to always confirm fully compliant origin and consent protocols in purchased lists while meticulously honouring recipient preferences. Email success relies equally on quality, trust, and scale. Impactful relationships only flourish when responsive audiences lend their attention voluntarily.

Try Cognism’s email list database

Cognism provides compliant, high-quality data that fuels B2B sales, marketing and revenue teams.

Sign up with us and you’ll get:

• Validated emails.
• EMEA, NAM and APAC coverage.
• GDPR compliance.
  
• The largest mobile dataset on the market.
• Phone-validated mobile numbers.

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