Is buying a lead list an effective way to use your marketing budget? Small business owners have limited dollars and are constantly evaluating ways to minimize expenses while maximizing their profitability. Buying a lead list could be a good investment that may help to shorten the sales cycle, but before making such a purchase you should weigh the following pros and cons to figure out if this makes the best sense for your business.
What are the pros?
- Buying a lead list can be a quick and easy way to get new potential prospects. It is fast and it will save you time in trying to collect and research this information yourself. It is especially useful for businesses that have more transactional based, lower cost products where having a high number of leads makes sense.
- Having a solid and consistent follow-up strategy can achieve results. You need to have a plan to regularly communicate with the people on your list and a process to manage your leads effectively for this to work.
- A lead list will be especially effective if you can get a qualified list that contains the right contacts in your target market. Find out if you can segment your list to include the kinds of people and companies that most closely fit your ideal customer profile.
And the cons?
- List buying can be expensive and not generate the return on investment. Just buying a list does not guarantee sales no matter how many contacts you purchase.
- These contacts are completely cold. You have no prior relationship and you must have a solid contact strategy to cultivate interest and “earn the right” for future interactions.
- A less expensive option would be cultivate your immediate circle of supporters including everyone you know. Build a list of every person you can think of and have access to (and I mean everyone from your barber to your daughter’s piano teacher’s husband) that may have interest in your product. These are warm leads and will provide you with the perfect opportunity to ask for introductions and referrals. Remember, these people also know people (and so on) that could be your next lead sources.
- Contact information is not completely accurate and you could waste a lot of time validating data.
- If your marketing strategy is a more relationship based approach, doing your own research could be a better way to get to know your prospects in preparation for a sales meeting.
Whether or not buying a contact list is the right move for your company, I recommend that you continuously grow your list through a proactive communication strategy that includes a combination of ongoing networking, an active referral strategy, face-to-face networking, online social media, and public relations. And most importantly, use a contact management system (even a spreadsheet will work) to organize your list , keep track of your communications and establish an on-going strategy to follow-up and stay in touch with your contacts regularly.