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What to be aware of when buying data lists

When faced with improving their direct marketing, many companies have turned to buying data lists. This can be a daunting prospect as there is always the chance of investing a lot of money in what could turn out to be a dud.
© geralt via Pixabay.

Amongst the many concerns are the data being out of date; an error prone list; or the new purchase simply not containing the information bargained for. Many companies have been burnt by bad lists, but there are guidelines that can help mitigate this problem. So how can one tell the good from the bad?

Pick your vendor carefully

Data can come from a multitude of sources, but broadly speaking you will run into two types of vendors. A) The reputable big brand who is well known across the board, and B) Anyone else trying to do a deal. Those in category B are sometimes found on Gumtree, or stumbled across in your email inbox. They promise the world for what seems like quite a reasonable price. As with most things in life, if it seems too good to be true it probably is, and you would be well advised to give their data a wide berth.

Apart from being well known in the industry and having been around for a long time, lists purchased from reputable sources have another big benefit – provenance. In the art world, provenance refers to where a painting originated from and the list of ownership, which helps establish the authenticity of the piece. In terms of data lists, provenance has to do with where the data comes from and how it has been maintained through the years.

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An emailing list that originates legitimately from Home Affairs might be a strong source, but if it was created in 2006 and has not been maintained, chances are that a lot of data will be outdated and worthless for marketing purposes. Similarly, if the source origin is opaque, you might find yourself in possession of data that has been illegally obtained.

There is an ethical point to this. If someone complains after receiving a marketing message from your organisation, asking where you received his/her information from, can you provide an honest, fact-based answer? If you can’t, don’t buy the data.

PoPI problems

Here is another big factor to take into account when purchasing data lists. The Protection of Personal Information (PoPI) Act is looming, which will make it illegal to send out electronic communication to a database, unless the person marketed to has actually opted in.

If companies do not apply the additional security measures required by PoPI in regard to the storage of personal data, they could face up to a R10m fine, or even imprisonment. Keep in mind that companies will still be able to cold call data from a purchased list, which means the procedures for maintaining a solid data list will still apply.

While some marketers might think otherwise, PoPI is there for a good reason, and could have prevented the recent massive data breach, where more than 30 million South Africans’ personal details were exposed.

Go with escrow

Make use of an escrow service when buying data. What sometimes happens is that a data vendor sends out a carefully curated database sample. But when the full database is received, it contains far less useful data, sometimes even being completely useless.

A third-party escrow service withholds payment until you are satisfied that the data provided is what was promised, ensuring that you get what is paid for. The service will incur an added cost but is definitely worth the outlay.

Think carefully

If bought for the right purposes, a good data list can be invaluable, playing a major part not only in lead generation but also improving the bottom line. Dealing with reputable vendors will ensure the unquestionable provenance of the data and is an essential step in ethical marketing practices.

However, the prospect of PoPI will make companies think twice about buying a new list for electronic marketing purposes. If not complied to, PoPI could just end up costing your company a lot of money, instead of making it.
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About Mike Kann

Prior to Olico, Mike founded the leading online financial product price comparison service ThinkMoney.co.za. Mike has over 10 years local and international experience in consumer lending, online marketing and online platform development. Before founding ThinkMoney.co.za in 2007, Mike was head of delivery for Advertising.com Europe (part of AOL) and head of loan risk analytics at Capital One UK (following a JV with Nedbank).

Read more: Gumtree, Popi