5 Ways of losing money when buying contact lists

There are many reasons why you should not buy contacts. In this blog post you will find 5 reasons explaining why it is a terrible idea to buy contacts for you marketing and sales efforts.

1. It costs money.

It may seem obvious since you have to pay for the contact list, but that is not the main reason why it will cost you money.

Some people buy contact lists or even when try to brute-force contact list generation trying to figure out what the emails can be (like g.guedes@company.com gguedes@company.com and guedes@company.com).

You are not gambling, you are marketing, remember that.

When your team is sending emails, sms and other types of communication to people they have (almost) no idea who they are, they are not trying to create a high quality contact list. This means they are wasting time, and yes, time is money.

If your team is not doing what makes your business grow, you are wasting money.

2. You are generating ghost contacts.

Ghost contacts will take a portion of your email marketing, CRM or any other platforms limit, and you probably pay for that. Chances are you pay for the amount of contacts in your lists or the amount of messages sent. Either way, you are wasting money by sending communication to people you don't even know they exist. Just stop it.

You know what else ghost contacts are good at? Bouncing. Sending messages to ghost contacts highly increases you bounce rate (specially hard bounces) and it can even damage your sending IP. There are international organizations constantly monitoring IPs reputation, and your Internet Service Provider (ISP) makes a lot of effort to monitor yours. It will not go unnoticed.

3. It is illegal.

Yes, you heard it. It is illegal in almost every country and region. You cannot just get someones info somewhere and send them promotional content without their consent, period. This is not me saying, please check the General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) just to mention 2 big international regulations. They are a lot to digest in detail, but it's pretty easy actually. Basically you cannot store, process, treat and use data from people if they don't explicitly or specifically allow you to do so.

If your business cares about following the rules, keep that in mind. I won't even detail the sanctions you may face by not following these regulations, but I think you might have an idea. Just a tip? It costs money.

4. You don't need a sales team. You need a bot.

Let's say you have a sales team sending cold emails, cold calling and trying to reach their monthly goals using a list your company bought or acquired in a not well-thought way. When you put your team to dive into LinkedIn using plugins, browser extensions or other softwares you are making them waste their time. If your business will really try to harvest as much contacts as it can, you might as well have a bot to do it, not a human being.

I will not even discuss the fact that those tasks are garbage and will frustrate your team more than help them crossing finish line.

If your strategy is just to spread your message through the world so you can catch a few leads on the way, hire someone to develop a bot for this contact hunting task, seriously. I must stress here this is not at all recommended and it you should put your effort on creating a list from the ground, with high quality info, content and specific targeting.

5. It kills your marketing efforts.

Imagine having a list with 10.000 people in it in which you have no idea what are their problems, their intentions, their needs. Do you think your marketing message will resonate well with them? Offering a product or a discount to someone you have no idea who they are is like using a food delivery app blind folded and trying to nail a veggie gluten and lactose-free lasagna just by clicking buttons. It makes no sense. At all.

It is not about quantity, it's all about quality.

Whenever you gather your team to look at the results and spend 2 hours talking about optimizing your marketing strategies, you are wasting time. It will be absurdly hard to improve what you can't see, what you have no information about. How can you build a garden of native flowers when you don't know what are the native plants for a start?

Try adding up the hourly cost of gathering these client emails or phone numbers and multiply it for the amount of hours your team spend doing it. Then take a look on how much of these contacts actually turn into clients.

Without looking at any of your business numbers I can tell you your team is underperforming. It means you are paying them to literally perform tasks that will not add to your profit, but to your losses. Think about that.

TL;DR

1. It costs money. If your team is focused on harvesting contacts anywhere on the internet, they are wasting time and they are not generating high quality contacts. Wasting time is wasting money.
   
   
   
2. You are not generating real contacts. A lot of harvested contacts are not real or the inbox doesn't exist anymore. Filling your email marketing software with ghost contacts is a bad idea because you pay for them or you pay to send them messages. Either way, you loose money.
   
   
   
3. It is illegal. No further explanation needed, you can face sanctions and fines for using other people's data without their consent. Don't do it.
   
   
   
4. You need a bot, not a sales team. If your sales team is harvesting contacts, you are overpaying for a task a bot could so. Your sales team are there to perform other tasks, not dive into LinkedIn and copy/paste emails. A bot could do this in minutes, every day.
   
   
   
5. It undermines your marketing efforts (and budget). If you are reaching people you have no idea who they are, you are just throwing money away. This is not gambling, this is marketing and high quality data will determine your success. Do not try to sell anything like this. Hope and luck are not strategies, just saying.

Please let me know on the comments what do you think about buying contact lists.