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With approximately 2,000 consumer lists on the market to chose from in the UK (not to mention all the B2B lists), the thought of sifting through millions of potential customers could leave data buyers feeling slightly daunted. But thankfully, there's an abundance of companies on hand to guide you through the entire process. So exactly who's who in the list-buying chain and how can you ensure that the data you're buying is accurate, up to date and will land you with responsive and loyal customers?

At the top of the list-buying chain are the list owners, who have assembled their own client databases from various direct marketing campaigns, questionnaires and surveys. Larger owners may have an in-house sales team that sells its data to other companies. But what are the other options? Step forward the list manager, whose job it is to act as an exclusive salesman for the list owner and keeps the database up to scratch by ensuring it's regularly cleaned and updated. And there to quiz the manager about the contents, price and state of a list are the list brokers and agency planners.

"A list owner will always say their data is best," says Nicola MacRobbie, director of third party data at Dudley Jenkins List Broking, part of Wegener Direct Marketing. "But it's the broker who offers the best advice to the buyer because they know what lists are out there and what might work better."

But even though brokers spend time shuffling through dozens of lists until they reach those that match the buyer's objectives, this is of no cost to the buyer. In fact, brokers work on a commissioned basis of between 10 and 20 per cent, paid for by the list owner.

"A broker has no personal involvement with a list," adds MacRobbie. "They just want to pick the best one for the buyer's business so they keep inviting them back."

And because of their experience, expertise and contacts, brokers are in a strong position to bargain. "Clients would probably say they won't pay over a certain cost per 1,000 names, whereas a broker would have more expertise in negotiating," says Chris Grey, managing director of TRG Strata, part of The REaD Group. And owners will often quote a cheaper price for brokers if a relationship between the two is firmly cemented.

Ian Boichat, managing director of Ventura Media, the list broking division of DataLocator, warns that managers and owners may not always have a buyer's best interests at heart: "The big data suppliers might try to sell you as many names as possible, whereas the broker ensures you only buy the right number of the most appropriate and reliable data."

Even so, there are buyers out there who are happy to do the dirty work themselves and head straight to the list owner. Doing this means every decision is their own, including negotiating deals on prices.

On the downside, tackling the list buying industry alone can be a drain on your resources. Sourcing six or seven lists from six or seven owners can translate into numerous phone calls, emails and faxes in an attempt to learn who owns what list, how much they charge for base rental (not to mention selections), negotiating and agreeing a price and finally, placing the order. In contrast, it's often one call to the list broker and the job's done.

Buyers have responsibilities too, and before buying a list it's vital that companies have a well-rounded picture of their target audience. A detailed, transparent brief should be drawn up for the broker, explaining what type of data is required and what the buyer is hoping to achieve from that data.

"The more information that's shared with brokers, the better the recommendations are going to be," explains Peter Lupa, sales director of list manager Consodata RFM. The brief should not only contain details on objectives and budget, but also the profile of existing customers and results from previous campaigns, good and bad.

For buyers choosing to bypass list brokers, it's important to consider what 'type' of list owner to contact. This depends on the 'type' of campaign being rolled out, be it telemarketing, email or direct mail.

One way of checking the potential of any given list is quizzing the manager on whether or not it has been, or is being used by similar businesses within your sector, and what type of response it has achieved so far.

If the data has worked for them, it's likely to work for you.

Buyers should also check how names are and were sourced, as this could indicate levels of responsiveness. If individuals are sourced from lifestyle surveys, for example, but have never purchased products via mail order, there's nothing that suggests they'll be any more responsive now.

But many believe lifestyle data is a credible option because it's cheaper and comes in greater quantities, says Ben Ennis, account director at list owner, manager and broker ListLab. "You want to make sure people have done something to get onto a list. It's not ideal if they've hurriedly ticked boxes to get to the end of a survey just so they can enter the prize draw."

Recency is often a big drive for list buyers, but if older names are still active it's less of an issue. Dozens of businesses buying new data and targeting new names simultaneously could leave customers bombarded with offers, which may reduce their response rates significantly.

If a database is older than a year, it's important to check that it's regularly updated against suppression files and the preference services to retain the company's reputation and avoid wasting time and money by contacting goneaways, deceaseds and those who have opted out of receiving direct marketing. It's also important to ensure customers with email addresses have opted in to receiving communications from you.

But heading straight for popular selections, such as recency, aren't always as beneficial as you may think, warns Lupa. "We manage Emap's magazine list and have found that a lot of buyers look to subscribers, but subscription data might be £30 a year, while reader offer buyers can be spending £60 and upwards per offer." So using less obvious selections might increase revenue. Experts also advise that before paying for a list, buyers should test a sample of names and ensure that the remaining individuals in the database are more than enough to target for a campaign.

The actual 'buying' process is all about give and take. Some list owners offer free selections and high volume discounts, for example. Others choose to negotiate net names, where the buyer receives a discount for any duplicates that might crop up in a list when run against their in-house database or external lists.

And lastly, take heed. Many suppliers licence their data to various managers under different guises, which means buyers could end up paying for the same lists without realising. "You should check if list owners are members of the DMA and are on the mail order protections scheme," advises Noyan Nihat, managing director of Highbury Direct Media. "Also confirm with the Advertising Standards Authority that there are no outstanding complaints against them."

COMMENT

SUZANNE LEWIS, director of list broking, HLB

"Don't try to do it all yourself because you won't be able to see the depth and breadth of the market. It costs nothing to use a list broker. The advice is free and if you work in open partnership, you'll benefit from an invaluable extension to your marketing department."

IAN BOICHAT, managing director, Ventura Media

"Make sure you know the source of data you're buying. Some companies licence their data to others to resell, so you could end up buying names from different lists only to find you have a lot of duplication, especially where you're targeting specific customer profiles."

GUY HANSON, technical manager, mailcom

"People who appear on several lists are potentially your best customers because they're regular mail order buyers. You may learn something from their behaviour that will enable you to find similarly hot prospects by other methods."

NICOLA MACROBBIE, director of third party data, Dudley Jenkins List Broking

"Consider the quantity of names that are available and think ahead about how much the list might grow. If there'll be substantially more names in six months time, maybe you should hold off and return to it further down the line."

TOP TIPS

1. Quality rules. Understand how data is captured, verified and maintained.

2. Test older data. Often cheaper and underused, it can be just as cost effective if screened correctly.

3. Identify who has used the data more than once and who is using it. Frequency may indicate quality, but could point to saturation.

4. Arm yourself for negotiation. List managers work on commission and can be less flexible. Data owners, such as lifestyle surveys, could offer greater value.

5. Ask for net name agreements to cover the cost of data lost through duplication. Make your claim within three months and measure performance on the net cost.

6. Avoid buying the same data twice and ask for the source. It's a volume game, with many owners licensing data to several managers under different guises.

7. If using cold data for the first time, consider a strategy and budget that allows testing of at least two sources of different types of data to aid ongoing planning.

8. Make sure your bureau knows what it can expect to receive. Provide a list of lists and ensure all suppliers clearly label their outputs.

9. Follow the DMA guidelines and codes of practice. Ensure compliance with the Data Protection Act. Use data within six months. Screen against the DMA preference services. Sort and return all goneaways.

10. Analyse performance on ROI. Look at past response rates. - Mark Arnold, head of data broking, Zed Media.