How Do I Grow My Database Responsibly with Third-Party Data?

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Recently, Dave Scott, Founder & CEO of Marketfish and author of “The New Rules for Lead Generation: Proven Strategies to Improve Marketing ROI,” joined Act-On CPO David Fowler for a discussion about how to grow a database responsibly with third-party data. During the course of their conversation, Dave and David touched on two important questions: “Should we buy third-party data?” and “How do we ensure that we’re selecting a reputable vendor?”

Sound like something you’ve questioned before? Here’s some feedback to help with your decision:

Should we buy third-party data?

third-party-dataWhen it comes to third-party data, there are lots of reasons to buy. The number of ways that a company can safely (and cost-efficiently) acquire leads is somewhat limited. Three tried and true methods are cold calling, email marketing, and direct mail. All three of these methods require lists and, as Dave points out, depending on the size of your business and the speed of growth, your house list might not cut it.

Other reasons to buy include:

  • You’re unable to keep up with demand. If your house list isn’t big enough or isn’t growing fast enough you might choose to purchase lists as a way to keep up with demand from the sales team.
  • Renting lists feels too risky. Renting lists means limited visibility into who you’re emailing or how many times you’re emailing them.
  • You have a profile of the ideal customer you’d like to target. Buying lists allows you to target people who are likely to buy, because they’re similar to customers you’ve already won and satisfied. Look back at who’s bought your product before, determine what verticals they exist in, and ask for more people like that.
  • You’d like to market alongside a house list. When buying lists you have the flexibility to simultaneously market to your house list. That means the ability to use the same creative resources and the same process for capturing leads.
  • You want to use that customer data in multiple ways. Buying lists is really like licensing them: you get one year of unlimited use. As Dave explains, you essentially have a multi-use license that can be used to reach out to those potential customers in multiple ways. This is as opposed to renting lists, where you don’t have the contact data (or, obviously, the option to use it).
  • You have a limited capacity. When buying leads, you can purchase only the amount you think you’re going to use. As a result, you don’t have to spend money on more leads than you have the resources to handle.

On the other hand, there are reasons to be cautious about buying, including:

  • When purchasing lists you have no idea how people acquire that data. This is a reason to be cautious, because how the data is qualified determines whether your organization really has permission to reach out to these individuals.
  • Much data is old and inaccurate. People switch jobs and responsibilities often. Even clean data that’s collected yearly can be outdated by the end of the year.
  • Some of the market has a tarnished reputation (for good reason). Deal only with established vendors.

How do we ensure that we’re selecting a reputable vendor?

If you decide to move forward with purchasing third-party data, it’s important to select a reputable vendor. When shopping around, here are factors to consider:

  • Ask potential vendors how they collect their data. If it’s not collected using a permission based process, don’t buy it.
  • Ask how often they verify the data. Quarterly is best.
  • Ask what the return policy is if the data is bad. The vendor should refund for bad data or replace it, without restrictions or limitations.
  • Make sure you get full records, with first and last names and context. Just email addresses or postal addresses isn’t enough.
  • Use a U.S. vendor. If you wind up being prosecuted for using bad data, an off-shore vendor will not help you, and has no enforceable liability.
  • Be very cautious about vendors located in Florida. Business laws in Florida don’t include recourse for fraud. If the data is bad, there’s the risk that you might be out of luck.
  • Fair pricing. Good data has value. Expect to pay 50–60 cents for quality leads.
  • The file is large, blind, and compiled. The bigger the list, the more likely it’s been compiled from multiple sources. For instance, it’s unlikely that one organization has 500 million valid email addresses, so a list that large is probably compiled of several smaller ones. Larger lists also often mean it’s less likely that the vendor is doing timely validation, which means greater data decay.

Interested in learning more using third-party data? Make sure to watch the full webinar: “Growing Your Database Responsibly with Third-Party Data.”


Does your organization use third-party data to grow your database? Have more questions about third-party data? Sound off by leaving a comment below.

“Mailboxes” photo by Gregory Jordan, under a Creative Commons license