by Patrick Thorp - February 25, 2021

Should I buy customer data to help my startup?

In short, no. 

I will of course go on to explain, but I have been asked this question a number of times because it seems like a quick and often cost-effective way of enhancing your database and your contact list. But at what cost?

The data brokerage business is big because there are many providers like Experian for example who, for years, have been considered to be a reputable business (and it is!). But the dark arts that exist in this industry are that the means by which these brokerages capture this information is always kept secret, so the purchaser can never be certain that the data they have purchased is correct. That also goes to the extent that often the same data set from different providers can massively vary in quality and accuracy, and the provenance is always debatable.

With the introduction of GDPR regulations in Europe, the penalty for contacting people who have asked not to be contacted is large. For a startup, not the kind of fine or activity you want to be caught up in.

But is it legal? 

Yes, it is legal to purchase data, but only if it has been purchased in the right way and from the right source which is often very tough to uncover if from a third party.

If you were to procure in the right way and from the right source there would have to be additional checks and balances put in place. Include a Double Opt-in option for consumers and also making it crystal clear that no-one is on your mail list who is also on your Do Not Email list. If you fall foul of this, again, expect a very heavy fine.

My view is that there are too many risks involved in purchasing data and you should avoid it possible.

What you should do is generate subscribers to your own marketing lists with effective and engaging marketing content. Focus on the correct demographic and have a real understanding of what problems they are facing – and how your product and service helps solve that problem.

Yes, it will take longer, but once you are rolling it will be hard to stop, and then soon enough you will have a database of engaged subscribers obtained organically. Much better!

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