Raise your hand if you’ve ever sent an email blast to a purchased list.

Ok, now raise your hand if the email blast you sent to that list was a wild success.

What? No hands on that one?

It’s ok, you’re not alone. Lots of companies use purchased email lists as a way to try to generate interest in their products and generate leads. But the cold, hard truth is that buying (or renting, or borrowing, or anything you might be doing instead of generating opt-in subscribers) email lists is a bad idea. How do I know? To the research!! 

The graph below is from MailChimp, a popular email platform for businesses of all sizes. What it’s showing is the correlation between four different email marketing metrics -- open rate, click rate, unsubscribe rate, complaint (spam) rate -- and purchased (public) lists.

As you can see, the only positive correlation between purchased lists and these metrics is the complaint rate. And positive correlation is not good in this case.

“But wait,” one might say. “There aren’t as many unsubscribes!” Well, yes, that’s true. However, since the open rate on emails to purchased lists is low and one must open an email to unsubscribe, we can reasonably assume that instead of opening the email to unsubscribe, those emails are either getting deleted or marked as spam (hence the high complaint rate).

Still don’t believe it? You don’t have to take my word for it. Here are a few more who have learned this to be true:

• HubSpot
• VerticalResponse
• SendGrid
• Radius
• You. Yes you, yourself. When was the last time you opened an email from a company you’d never heard of and acted on it?

So, if purchased lists don’t work, how then shall we digitally market?

I’m so glad you asked. :)

INBOUND MARKETING

When “how do I generate leads for my company” is the question, inbound marketing is the answer. Here’s how it works:

At its most basic, inbound marketing is creating content in the form of blog posts which you can promote via social media which also rank on keywords your target audience is searching.

Once you’ve attracted visitors to your website, you convert them into leads by presenting marketing offers in calls to action that lead to landing pages where the visitor must submit their contact information on a form in order to take you up on the offer (think free ebooks or whitepapers).

You then nurture those leads via email and workflows you’ve set up to help move the leads through the funnel closer to a close before they have contact with a salesperson.

And with inbound marketing, we can take it a step further than the sale, turning customers into brand promoters through event invitations, continued interaction on social media, and smart website content that recognizes the customer’s preferences and interests and adjusts according to their needs.

The catch is that it doesn’t provide an immediate feeling of payoff like sending an email blast with a pitch for your products or services does. It takes a lot of time and effort to build up content that will attract your target to your website (hint: not sales pitches) and a social following to make sure that audience sees it. It takes even longer still to get the search engines to notice your relevancy for terms that your target is using. So undertaking an inbound marketing program requires an investment of time, money and patience, which can be hard if your boss is on you to get those leads flowing NOW.

But the great thing is that once you’ve started getting a list full of leads through your content, landing pages and forms, you know that the people you’re talking to are actually interested in what you have to say -- as opposed to those on the purchased list, who you’re hoping will find your interruption in their day/inbox helpful or interesting instead of annoying. 

Best way to sell something - don't sell anything. Earn the awareness, respect, & trust of those who might buy.

— Rand Fishkin (@randfish) February 4, 2015

And, it works.  Again, to the research!!

• Eighty percent of business decision makers prefer to get company information in a series of articles versus an advertisement.
• Companies that spend more than 50 percent of their lead generation budget on inbound marketing report a significantly lower cost per lead.
• Thirty-four percent of all leads generated in 2013 come from inbound marketing sources. (via CMO.com)

Ready to get started but have a team full of people addicted to purchasing e-mail lists? Download our free guide, The 6 Marketing Metrics Your Boss Actually Cares About.