Monday, May 18, 2009

What's Your List Worth?

On one of the newsgroups I lurk at, there was an interesting posting this afternoon.

The part that struck me is the bottom line question:

- If someone has a list of 100 clients and he can't make a living with them, is that list worth anything?


At first blush the answer is no. After all, how much money do those 100 clients need to bring in?

If it's $100,000, that's $1,000 each per year.

If it's $80,000, that's $800 each per year.

If it's $60,000, that's only $600 each per year.

Home office users are worth $600 a year!

So, let's think about those 100 clients. You'd be hard pressed to find 100 businesses of any size who don't spend at least $1,000 a year on I.T.

Even in a home office, it would be almost impossible to spend less than $200/month on computers, repairs, and PC supplies. That's $2,400 each!

That's the low end. And a normal distribution would tell you that there's a lot more money in that list.

If those businesses are spending all that money, but not with the computer consultant, then two reasons come to mind:

1) The businesses on this list simply aren't spending money with the old consultant


2) The businesses on this list consist of people who don't rely on any consultant when making technology decisions

If the list simply doesn't turn to the current consultant for advice, they may be looking for (or open to) a different approach. In such a case, some of them will very likely be worth more money to you than they are to the current consultant.

If the list is mostly self-serve when it comes to technology, that's very good news. Such people can be engaged in discussions about good/better/best approaches. Even better, they are probably interested in technology and can be engaged in discussions of new and cool technology.

Where does that leave us?

Well, the question stands: Should you consider paying anything for this list? If so, how much?

The answer is not a clear NO.

But my first impression is still pretty strong. It's very hard to make money off a list like this. After all, their history sucks out loud!

If the existing consultant makes a really good introduction, you might make some good connections. MY personal experience with buying another business tells me that half of these people will simply take the opportunity to go elsewhere. Then you have to work really hard to get the rest to give you a chance.

If there are a few gems in the crowd, they can make everything worthwhile.

But when people are not used to buying, they're not likely to remember that they've been handed off to you.

So, two or four or six months down the road, when they go to make a purchase, they're very likely to call the old consultant.

There's only one way to make sure that you're top of mind when they need tech support: You need to saturate them with letters, post cards, monthly newsletters, emails, blog posts, etc. In other words, you need a full court press to make these people your own.

If you went to Dun and Bradstreet's Zap Data and did a search for 100 total strangers who fit your desired clientele profile, it would cost you about $25.

If you proceed to do a total Robin Robins marketing campaign on these folks, it would probably be better than a half-assed introduction from someone who can't make a living off 100 businesses.

After all, 100 random strangers are easily worth $600 each!

So if your goal is to find 100 people, saturate them with marketing, and get yourself top-of-mind for the day they need something, then total strangers are about as good as this list.

- - - - -

If I were faced with this decision today, I have to admit that I'd be tempted.

But the first thing I'd do is to sit down and talk about every name on that list. If I found some gems, I'd be willing to discuss a small price.

And if I wasn't totally impressed? I'd go to Dun and Bradstreet and Robin Robins!


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  1. Do tell- which newsgroup/forum?

  2. I guess a follow-up would be, what would happen if it were a list of clients that were on a managed contract and you were asked to buy them?

  3. It took me a little while to get back here and post the group referenced because I didn't want to have a bunch of people go hit that group and take them off course.

    The group is:

    I asked one of the moderators and he agreed that listing the group is fine. But he said:

    "You might want to add a disclaimer that this group caters to break-fix only models, newbie's with no business plan, zero budget startups, one man bands, part timers who work another job, the rural residential only tech scene and micro small biz techs who may have some anti-MSP tendencies."

    I lurk on this group because there is a whopping dose of reality there. The I.T. Support world has a lot more diversity than we normally see. Not too many magazines do cover stories on lifestyle break/fix guys who focus on helping old ladies get their email working.

    At the same time, this group has some really great contributors with a lot of insight and common sense.

    If you join this group, I encourage you to lurk before you leap.


  4. Mike: A list of clients on managed services is a whole other story.

    I would instantly place much higher value on that. But I would still rely very heavily on the proper introduction.

    And the truth is, if someone doesn't want to be your customer, they're going to go away. Sooner or later.

    So while the managed service list will have higher value, you're still going to lose some. The emphasis needs to be on keeping the ones you want the most (whether that's because of dollars, vertical, personality, or whatever).


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