Buying Client List from Liquidated Company
Discussion
Quick one - sealed bids going in on Monday…
A competitor folded late last year. The liquidator has offered our company a list of 2300 clients.
We have no idea what to offer. £200 or £200,000
Could someone more experienced offer any advice? How do these things usually play out?
Some information;
It is an appointment based business. Each appointment is £68 so should we convert 10% of the list, it is an income of £15640 (plus any repeat business but unlikely any client visits more than 3x a year). 10% may be ambitious but that’s where the question comes in regarding the bid.
Fairly competitive industry but we are the top of google for the area and certainly one of the best known providers in the area.
Should we price in buying the list, just to stop competitors having it?
Where should the bid be? What else must we consider? I would be confident we convert 100 of the 2300 on the list over the next year or so but it’s not impossible that it’s over 1000; hence the uncertainty when coming up with a number.
Thank you.
A competitor folded late last year. The liquidator has offered our company a list of 2300 clients.
We have no idea what to offer. £200 or £200,000
Could someone more experienced offer any advice? How do these things usually play out?
Some information;
It is an appointment based business. Each appointment is £68 so should we convert 10% of the list, it is an income of £15640 (plus any repeat business but unlikely any client visits more than 3x a year). 10% may be ambitious but that’s where the question comes in regarding the bid.
Fairly competitive industry but we are the top of google for the area and certainly one of the best known providers in the area.
Should we price in buying the list, just to stop competitors having it?
Where should the bid be? What else must we consider? I would be confident we convert 100 of the 2300 on the list over the next year or so but it’s not impossible that it’s over 1000; hence the uncertainty when coming up with a number.
Thank you.
jonsp said:
Has the liquidator indicated he's going to be shopping the list around your competitors to get a bidding situation going - or is he just offering it to you?
Should have said, it has been offered to everyone and anyone who can offer the same service within 25miles of the liquidated company’s old premises. Probably 15+ companies. Maybe one or two bigger than ours but most smaller/one man band, part time outfits. I suspect they won’t have or won’t want to commit to spending £15k on the list. southendpier said:
Does GDPR affect this?
Presume you will only get the Business names and not the individual contacts within the business.
Assuming this is B2B GDPR shouldn't apply - he'll get the contact(s) + company name. Obviously we don't know the quality of the data, some contacts may have left, some clients may have gone out of business etcPresume you will only get the Business names and not the individual contacts within the business.
Maybe ask for a sample - say the first 10 names on the list?
Thanks all, good food for thought.
To answer some questions;
We are a B2C company.
We have been told the list includes names, DoBs, postal and email addresses of clients which used the now finished business in the last 2 years.
The company went bust after losing a favourable government contract; it sounds like they leant on that every year and the private stuff wasn’t enough to keep them going when it never came to them one year.
Very good point that we may already have some of the names on our own list/customer databases.
GDPR applies, purchaser to implement appropriate GDPR rules - offer opt out, deletion of details etc..(this is fine, we are set up for this).
Can anyone put a realistic number on this from past experience in buying customer lists from other companies? Really not sure if it’s market value and the sealed bids set up leaves us open to overpaying or not being in the same ballpark as other bids.
To answer some questions;
We are a B2C company.
We have been told the list includes names, DoBs, postal and email addresses of clients which used the now finished business in the last 2 years.
The company went bust after losing a favourable government contract; it sounds like they leant on that every year and the private stuff wasn’t enough to keep them going when it never came to them one year.
Very good point that we may already have some of the names on our own list/customer databases.
GDPR applies, purchaser to implement appropriate GDPR rules - offer opt out, deletion of details etc..(this is fine, we are set up for this).
Can anyone put a realistic number on this from past experience in buying customer lists from other companies? Really not sure if it’s market value and the sealed bids set up leaves us open to overpaying or not being in the same ballpark as other bids.
ColdoRS said:
Where should the bid be? What else must we consider? I would be confident we convert 100 of the 2300 on the list over the next year or so but it’s not impossible that it’s over 1000; hence the uncertainty when coming up with a number.
That uncertainty is upside for you taking the risk that actually you don't convert 100.It's often not just about the value to you when buying from the liquidators but things like the following:
Is there any competition: if so you might want to bid a little higher, either to secure it or to make it more expensive for competition.
What sort of size company is it? what a liquidator will "get out of bed for" will depend on the sorts of sums they're dealing with. A small company going pop might mean that a £1000 recovery is worth making. A big company going pop and £1000 offer isn't really worth their time opening the envelope.
How else can you reach those clients? Would you be better off, for example, spending the money on google (with the dead competitor name as a keyword).
Are things like their trading name, internet domain, social media accounts for sale (or even lapsing/lapsed)? Buy and redirect to your firm? Might be a better long-term investment, especially if they had a decent online presence with lots of backlinks.
Don't forget that there will probably be customers on the list who already chose the competitor over you. They may or may not be easy to convert.
Mojooo said:
Does GDPR allow this?
If I give my details to Tesco - I don't expect Sainsburys to buy those details if Tesco closes down.
I guess it may be in the terms and conditions?
Usually a privacy policy will include a term along the lines we may transfer your details in the event of a company sale/change of ownership etc. If Sainsbury buy Tesco you have agreed they'll get your data as part of the deal.If I give my details to Tesco - I don't expect Sainsburys to buy those details if Tesco closes down.
I guess it may be in the terms and conditions?
Assume the liquidators have confirmed this.
I think for B2C the value is less than B2B.
What do you sell? Is there lots of on going repeat business?
Do these customers on the list not know about your business? If not why not? Might it be more valuable to address why this is?
If they know of your company why did they choose another?
My gut feeling is that a list of customers is of limited value. Do you get anything else? Specifics of the transactions the profit generated etc etc? Without that kind of data what value does the list have over a random purchase from the electoral roll?
What do you sell? Is there lots of on going repeat business?
Do these customers on the list not know about your business? If not why not? Might it be more valuable to address why this is?
If they know of your company why did they choose another?
My gut feeling is that a list of customers is of limited value. Do you get anything else? Specifics of the transactions the profit generated etc etc? Without that kind of data what value does the list have over a random purchase from the electoral roll?
southendpier said:
Does GDPR affect this?
Presume you will only get the Business names and not the individual contacts within the business.
This.Presume you will only get the Business names and not the individual contacts within the business.
Obvs if B2B less of an issue, but if individuals, they may have given their consent to Company A to hold their data and use it. Unless that use also included the ability to pass it to others and for express purposes of use to you, it may be £15k down the s
tter.I'd want the seller to be really f
king clear on what they're actually selling myself, and for you to be 100% assured there is actually value to you.Folded last year , so what % of customers haven’t already found a new supplier ? Also you have no clue if the old owner hasn’t already sold the cream of the list behind the the administrators back, In my experience these list never convert as well as you think they will , No one but you can put a price on it , could be gold mine and useless
ColdoRS said:
Quick one - sealed bids going in on Monday…
A competitor folded late last year. The liquidator has offered our company a list of 2300 clients.
We have no idea what to offer. £200 or £200,000
Could someone more experienced offer any advice? How do these things usually play out?
Some information;
It is an appointment based business. Each appointment is £68 so should we convert 10% of the list, it is an income of £15640 (plus any repeat business but unlikely any client visits more than 3x a year). 10% may be ambitious but that’s where the question comes in regarding the bid.
Fairly competitive industry but we are the top of google for the area and certainly one of the best known providers in the area.
Should we price in buying the list, just to stop competitors having it?
Where should the bid be? What else must we consider? I would be confident we convert 100 of the 2300 on the list over the next year or so but it’s not impossible that it’s over 1000; hence the uncertainty when coming up with a number.
Thank you.
If you are top of Google for the area, you will mop up a lot of what becomes available I imagine.A competitor folded late last year. The liquidator has offered our company a list of 2300 clients.
We have no idea what to offer. £200 or £200,000
Could someone more experienced offer any advice? How do these things usually play out?
Some information;
It is an appointment based business. Each appointment is £68 so should we convert 10% of the list, it is an income of £15640 (plus any repeat business but unlikely any client visits more than 3x a year). 10% may be ambitious but that’s where the question comes in regarding the bid.
Fairly competitive industry but we are the top of google for the area and certainly one of the best known providers in the area.
Should we price in buying the list, just to stop competitors having it?
Where should the bid be? What else must we consider? I would be confident we convert 100 of the 2300 on the list over the next year or so but it’s not impossible that it’s over 1000; hence the uncertainty when coming up with a number.
Thank you.
I would not pay for a list like that. At best I'd pay commission on any sales. But a liquidator probably wants a quick payment. If so I would pass.
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