Buying Prospect Data Seems Like an Easy Hack for Getting More Customers. But Is It the Right Move? Purchasing potential customer info in an effort to expand a client base can be tricky. Keep these key points in mind as you consider it.

The future of business lies in data. And while you're likely already sending marketing emails, text messages and direct mail to existing customers, it might be wise to also apply these methods to reach prospects who haven't heard of your business yet. Information on these would-be customers is known as "prospect data."

Naturally, if you want to expand your reach, the data you're working with needs to be accurate, but is purchasing it the right move? Here's a closer look.

Pros and cons

Here are some of the benefits of purchasing data to find prospects:

• It gets you information quickly.
• It's significantly easier than gathering data yourself.
• Well-researched B2B data lists have a good sales track record, so the purchase stands a decent chance of paying for itself.
• Most quality providers let you set criteria to make sure that you only get information for likely customers.
• Data can be highly specialized. For example, buyer intent data can tell you where a prospect is in their buying journey.

Of course, every strategy also has its downsides:

• Low-quality vendors often sell out-of-date lists, which means marketing emails may not reach intended targets.
• Often, multiple companies in the same niche are paying for the same lists, so your prospects may have already bought the product or service.
• In some cases, high-quality lists may be so expensive that the investment isn't worth it.

It's important to note that there's a lot of gray area in these considerations. Purchasing data isn't always a wise decision, but if you carefully evaluate your situation and the vendors you're considering, it can be a valuable asset.

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The illusion of a silver bullet

Make sure you avoid the common mistake of thinking that buying data is a one-size-fits-all solution. It's essential to have realistic expectations: If your business is struggling, making this move alone isn't going to make broader issues disappear.

To ensure you're making a wise purchase, it's worth asking companies for samples and data matching. Anyone can claim to sell top-notch, accurate information; ensure vendor candidates back that up.

Also, even the best third-party providers have their limitations (privacy laws restrict third-party data collection, for example). Additionally, finding data specifically for your target demographic can be challenging (say, exclusively blue-collar workers).

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Avoiding scams and other risks

Every industry has bad actors, and the data provider market is no exception. If you buy from a fraudulent provider, you'll be out for the cost, of course, and left with zero new prospects.

Here are a few tips for choosing a quality vendor and avoiding scams:

• Verifiability: Every data provider will say they offer high-quality information, so verification is always a good idea. Check if the candidate has conducted a third-party test (a prominent one is the Nielsen Digital Ad Ratings test), which will give you the data's efficiency and show how it compares to the market average. Verifying quality this way can be time-consuming, but it is one of the most important steps. Don't rush through it!
• Check for GDPR/CCPA compliance: Most reputable providers comply with the General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), or both. (The GDPR is an EU regulation, while the CCPA is a California state law.) Quality providers take data privacy laws seriously and should have a section of their website dedicated to it. If you don't see one, there's a chance the provider might be fraudulent (or, at the very least, one that provides an inferior product).
• Check available segments: Most providers offer data in a range of segments, typically specific markets (business professionals, gamers, fitness enthusiasts, etc.). Before buying, make sure the vendor has a segment that aligns well with your business. It's also worth finding out if the company offers specialized or custom segments. For example, many will likely be able to deliver prospect data for fitness enthusiasts broadly, but fewer will offer specific segments like bodybuilders and CrossFit enthusiasts, etc.
• Reach out to business contacts: Online reviews aren't necessarily an accurate reflection of a company's legitimacy; after all, they can be easily faked. If you have professional contacts who have engaged data providers before, ask their opinions about the services they've used.

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The art of the offer

You can't negotiate in every realm (you wouldn't try to haggle with a supermarket cashier, for example), but negotiation is essential when it comes to data providers. Remember that even reputable companies aim to charge as much as possible, but if you make a reasonable counter, there's a good chance of a deal being struck.

That said, you need to make sure you negotiate the right way. Here are a few tips to help you succeed:

• Make it clear that you'll be a good customer: If you're making a small, one-time purchase, data providers may not see you as highly valuable. However, if you let them know that you will offer steady business, they may be inclined to offer a discount.
• Let prospects know you're getting other quotes: It's important to talk to multiple providers (most experts suggest getting quotes from at least three) and to let each one know that you're asking for quotes elsewhere.
• Never accept the first offer: Even if you've already taken the above two steps, don't accept the first offer. Make a counter, or ask them to come back with a better price.

Cost-free options

Using prospect data can be difficult, but it's all but essential if you want to grow a business. Note, too, that purchasing it isn't always necessary. You may be able to find creative ways to gather up-to-date and valuable information without paying a premium. For instance, on Google Maps and similar platforms, you can "scrape" contact information for prospects.

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