Using Purchased Lists For Email Marketing - Do They Work? Case Study

Using purchased lists for email marketing is one of the more dubious areas of promoting your small business that you can get into. Here's a few words that you might think of when you think of marketing to people who are not 'opted in':

  • Spam
  • Unsubscribe
  • Chancer
  • Huckster
  • Waste of time and money

That should give you an idea of the general feeling towards buying and using marketing lists.

Why do people still buy email lists then?

However, a lot of people do sell them and people keep on buying them. There must be a reason for that.

And the reason is that sometimes - just sometimes - using purchased lists for email marketing does work. It just does, and there's no point in denying that fact. Obviously a lot of people get it wrong and suffer some pretty serious consequences, but - as we will see below - this doesn't happen all of the time.

The rest of this post details an example of a campaign that I ran this week, with a list of around 9000 email addresses that my client had already purchased. In terms of size, it's quite a small sample to base anything on really, but in terms of an email campaign for a small, 1 or 2 man band service-based business, it's quite a large campaign. 

The potential risks of using purchased marketing lists

Now, before I went ahead and set up the campaign, I explained to my client that there were a lot of risks associated with this kind of marketing.

Such risks include:

  • Potentially zero returns
  • His domain name being blacklisted
  • His reputation being tarnished

That's 3 pretty risky scenarios in my book, none of which I'd like to realise myself. So, we worked out a plan of action that would try and reduce the chances of the above happening in this campaign.

Taking steps to protect yourself as much as possible

Anyway, before we went ahead with the campaign, I took the following steps to try and minimise any damage:

  • I set up a new domain name for the email delivery/reply to address
  • I didn't include any links back to the clients website on the email itself
  • I made the email as perfect as I could in terms of introductory tone and purpose 
  • I crafted a very useful e-Book to send along with the initial email, one that I knew would be of use to the recipients
  • I used a list from a trusted source, one that limits (as much as possible) the presence of SPAM traps etc

In my mind anyway, making sure the above was taken care of went some way to mitigating the negative effects of using purchased marketing lists. The proof would be in the pudding so to speak, but I was confident enough to start the campaign with these 'safeguards' in place.

Important note: This campaign was sent in the UK, where it is legal to send email campaigns to people as long as you give them the option of opting out from further communications. In some countries, it is not legal to send unsolicited emails at all.

Comparing the performance of purchased lists to opt-in lists

I'm going to use the sector 'Business Services' for average rates here as this is the sector my client is part of.  

Average performance of opt-in email lists

Open Rate: 21.43%

Unsubscribe Rate: 0.24%

Click Rate: 2.76%

SPAM Rate: 0.3%

Source for above data

Average performance of purchased email lists

Open Rate

To give you an idea of just how terribly purchased lists usually perform, here's a screenshot taken from a conversation over on the Smart Insights website:

The average open rate of a purchased email list is between 1% and 2%

Dave Chaffey is a member of the team over there and he certainly knows his stuff. So, from this we can say that:

the average open rate for a purchased email list would be between 1% and 2%, with rates closer to 1% being more likely. 

This figure seems to be validated by the information provided below too. 

Unsubscribe Rate, Click Rate and SPAM Rate From Mailchimp

The best source of information I have for this comes from MailChimp and Omnivore, it's anti-abuse system.

Here's the information they provide:

Average email marketing performance rates
As you can see from these graphs, the vast majority of campaigns sent to purchased lists are complete failures. As Mailchimp say themselves, the only thing that goes up here is the complaint (SPAM) rate - everything else faceplants.

The outcome of this particular campaign

As you can see from the above, the expected results from a purchased lists are terrible. However, that doesn't gel with the experience I had with this campaign. Here's what we saw:

Open Rate

As you can see from the above screenshot, the average open rate came out at about 5.02%

Unsubscribe Rate

The software I use doesn't show the Unsubscribe and SPAM rates in the overview screen, so I have to go into each segment to see. Rather than list 7 images here, here are the screenshots for the largest 2 segments:

As you can see, the unsubscribe rates actually aren't too bad. The average unsubscribe rate across the whole campaign was 0.63%.

Of course, a lot of people would just be hitting the SPAM button - at first, we saw none of these, although in hindsight that was simply a delay in reporting. We ended up with a huge 2.06% SPAM/complaint rate.

Click Rate

To be honest, the click rates were the biggest let down for me, %-wise anyway. The only clickable link we had in the emails was for the e-Book, so at least we know all the clicks were people who chose to look at this (remember there were no links to the client's website).

As you can see from the overview screenshot above, the average click rate worked out to be a little over 0.15%. That is very, very low.

However, if we think that the campaign was sent out to 9209 people, that means that 138 people actually saw our e-Book.

And as we will see below, that figure means something.

What about the bounce rate?

Writing about this separately as this is where we took a huge hit. Here are the figures:

As you can see, one of the campaign segments suffered a huge bounce rate of 52.4%.

Opt-in List Bounce Rate Average: 8.04% (source)

Our Bounce Rate: The average bounce rate of all campaign segments combined was 43.7%. 

Ouch. Maybe it's a case of go large or go home with purchased lists as you are definitely going to lose a huge chunk of them down to them being junk. 

Did using a purchased list work in this instance?

Part of me feels pretty unprofessional for coming to this conclusion, but in this instance, using a purchased email marketing list did work - without question. Here's why.

My client is a very small business (2 employees) who offer a very high value service. They do not need many clients n their books to be profitable. In this particular campaign, we saw the following:

  • 460 people opened the emails (5.02% Open Rate)
  • 138 people click the e-Book Link (0.015% Click Rate)

Most importantly, the phone rang multiple times.

And this is the most important metric of all, make no mistake. The phone rang and enough leads were generated to make sending a campaign to a purchased email list worth it, on this occasion anyway.

Is this type of campaign right for you?

An important point to make here is that I think this campaign only worked because the client offers such a high value service. If the client needed high volume, this campaign would have been a flop. However, they only needed a handful of leads and this was easily delivered in the end.

So, I'd bear that in mind if you are considering such a campaign - do you think you will see a high enough return if your open and click through rates are as low as 5% and 0.015% respectively?

If the answer is yes, then go ahead and give it a shot, if the answer is no, it's probably not worth the risk. 

Thanks for reading,

By Alan MacDougall

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Revenue Builder is a small business marketing strategy advice blog, written to help small business owners and startups maximise sales revenue.
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