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B2B Mailing Lists: Rent vs. Build – the Pros and Cons

by | Apr 8, 2010 | Direct Mail, Mailing Lists | 1 comment

For delivering marketing messages to a precisely targeted audience, two of your most potent weapons are direct mail and email. But to use either effectively, you need a precisely targeted mailing list.

To obtain a high-quality mailing list, you have two basic options: rent or build. Here’s a quick guide to the pros and cons of list renting versus list building to help you decide which is best for your business.

Note: By “list building”, in this case, I mean building either through research, or through offers on your website or in your normal advertising that allow prospects to “opt-in” to your house list.

Advantages of Renting

Saves Time. Through a list broker, you can rent the mailing lists of publications to which your target audience subscribes, like Aviation Week or Aerospace Design and Manufacturing. The broker can filter these lists – by what are called “selects” – by industry, job function, geographical location, etc. You rent only the names that match your selection criteria. It pays to use a reputable broker, like Esperian or Edith Roman, who can guide you in B2B list selection.

High Volume. If you sell to a fairly broad audience within your target verticals, you can reach a large number of names through rented lists. Major trade publications have thousands of subscribers.

Disadvantages of Renting

Rental Costs. You pay for every name you mail to, every time you mail to them. The exception being those names who respond to your promotion: they become part of your “house” list, so you never have to rent them again.

Less than optimal targeting. The available selects may not be as granular as you would like. Say you’re an avionics test equipment maker, and your ideal prospects include VPs of Engineering, Directors of Avionics, and Avionic Systems Managers. You may find that the best available mailing list select for a publication your target audience reads is “engineering management”. In this case, you’ll end up paying to mail to entire engineering departments, not just the avionics sections.

Advantages of Building

Precision Targeting. If you build your list by researching your target market (more on this in the next article), you can match your names as closely as you like to your ideal customer profile – in whatever verticals you wish. Opt-in lists can be precision-targeted if you make sure your offers appeal almost exclusively to your target audience.

Precise targeting pays off in better response rates and higher ROI, and is crucial to the success of your mailings. At least 40 percent of that success depends on the quality of your list, according to marketing legend Freeman Gosden in his book, Direct Marketing Success. More recently, the Sales and Marketing Institute estimated that figure to be even higher – between 50 and 75 percent.

No Rental Costs. You can direct mail your hand-built list as often as you like, with no rental charges or commissions. For email, of course, you must build an opt-in list – otherwise, you’re spamming.

Lower Mailing Costs. Because your hand-built list is so well targeted, it doesn’t have to be nearly as big as a rented list to get the same number of responses. You mail fewer pieces and get higher ROI.

Disadvantages of Building

Labor intensive. If you build your list through research, tracking down the right names requires persistence and resourcefulness. If you opt to build through advertising, you have to create effective promotions that motivate prospects to respond and give you their addresses. Either way, building a substantial B2B mailing list from scratch takes some effort.

Takes more time. Especially if you’re building an opt-in list. But with the right offer (See the article, “How to Double or Even Triple Response to your Ads, Emails and Direct Mail”, later in this issue), you can cut this time dramatically.

Bear in mind that the two methods are not mutually exclusive. If you have a promotion that’s worked very well to your hand-built house list, for example, you may want to try sending it to a well-targeted, rented list. Chances are, you’ll get good response from likely customers on that list – and thus add substantially to your house list – even though your response rate may not be as high.

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