What is a list broker?
A list broker is an individual or business that can source contact lists for your direct marketing initiatives. List brokers find list owners, identify list options for your target audience, and negotiate prices for you. They typically earn a commission based on sales of contacts.
While list brokers can help you get new subscribers, buying or renting lists is not recommended for compliance reasons. It’s also unlikely those subscribers will engage with your brand since they didn’t agree to be contacted by you.
Why you should avoid renting or buying lists
Here are 4 reasons to avoid using a list broker’s services:
1. Regulatory compliance
The legality of marketing to third-party lists is complicated. Laws on data brokerage and consent vary across countries and channels. It’s easy to miss the mark, discover you’re not compliant, and suffer financial and legal consequences.
In Europe and Canada, it’s illegal to send people marketing messages without obtaining their express consent. Even when a list owner has received consent to add people to their lists, those recipients haven’t consented to receiving messages from your company—which is required to remain compliant.
2. Reputation damage
Even if it’s not illegal to obtain a contact list from a broker in the US, doing so may put you on an SMS carrier’s or inbox provider’s block list.
When you send marketing messages to people who haven’t signed up for them, they’re more likely to unsubscribe or flag the message as spam. If this happens enough, it can harm your sender reputation and email deliverability.
3. Unengaged subscribers
With purchased or rented lists, brands likely won’t get subscribers who want to engage with their marketing messages. This means you’d have a lot of unengaged subscribers, which can reduce your engagement and conversion rates and ultimately result in a lower return on investment (ROI).
4. Data ownership
When you rent an email list, you’ll likely be sharing it with similar businesses. That means you’ll be competing with similar brands for people’s attention, and it’ll be harder to stand out.
When you build your contact list organically, you’ll have more control over the collection, segmentation, and analysis of that data. This process takes time and effort, but the ROI is worth it.
Organic contact lists are easier to segment, have better engagement, and have higher conversion rates. As a result, your marketing initiatives will see a high ROI.
A marketing automation platform like Klaviyo makes organic list building easier. By helping you create sign-up forms to welcome subscribers onto your list, manage and segment your contacts, and clean unengaged segments, Klaviyo makes sure you have quality subscribers who want to engage with your brand.
Sign up for Klaviyo to build and connect with your audience, whether you’re reaching out via SMS, email, or push notifications.