A Startup Toolkit reader wrote asking 'Should I buy the email list of a local business in my industry that's going out of business?' My initial gut feeling was 'No,' as they didn't generate the list, and it's not a good idea to 'drop in unannounced.'
I like to bounce these things off people in the industry first, so I contacted Keith Moore, Chief Marketing Officer at iContact. Keith agreed, 'If you want to utilize a list, have the owner handle sending a mailing on your behalf. You don't have the trust and understanding of another firm's customer.' So, my reader could work with the list owner to create an agreed-upon note that would introduce the competing service, and invite the current customers to join in.
Keith and I discussed the best practices involved. 'Have the invitation go to a page on the company site where you can invite them to your list.' It has to be a normal, opt-in form. 'Good mailing list management means always being clear and upfront with your customers. Don't abuse the right to email them, and you're more likely to keep them as happy customers.'
The other question the reader had was 'How much do I pay for the list?'
My suggestion was 'Pay for success.' In other words, if the list has 5,000 people on it, don't pay for all of them. Let the going-out-of-business company send a mailing or two. Most email list software can let you segment your responses into a new list. Count the customers that are still with you in a month or two, and pay for those that are now your customers. Now you've gotten some valuable, opt-in customers, and you can give back some consideration to the person who provided the leads. Base the compensation around what your current cost of email acquisitions are. If you don't know that number, think about a cost to get people to sign up at an event or trade show in your industry. Make sure the person with the list is comfortable with your calculation and your proposal. And good luck.
What's your email acquisition strategy? Let us know.