Finding the Right E-mail Lists
Now that prospecting efforts are picking back up on the postal side, will e-mail prospecting be far behind? In years past, marketers complained of low response rates and concerns of being perceived as spammers.
While those same issues influence marketers' decisions to prospect via e-mail today, the continued, albeit slow, growth of e-mail lists for rent and the offering of more direct response-oriented files is luring more companies to give e-mail lists a test.
"Direct mail certainly is the foundation [of direct marketing], but e-mail offers a new level of communication that direct mail can't," says Michelle Feit, president of ePostDirect, the e-mail marketing arm of Edith Roman Associates in Pearl River, N.Y. By leveraging available technologies and strategic messaging, Feit asserts that direct marketers can create a more dynamic dialogue via e-mail that can be used to help drive overall acquisition and retention efforts.
But just any e-mail list won't do. When it comes to a sensitive environment like someone's e-mail inbox, you need to carefully assess your options.
What's Out There?
According to SRDS, a list research tool for list brokers and marketers, the number of consumer e-mail lists for rent exceeds 2,300; some of these lists can offer as many as a couple million e-mail addresses, while more niche, direct response files can contain as few as several thousand e-mail addresses.
This tremendous disparity in list sizes, along with a certain amount of skepticism about compiled files, makes it somewhat difficult to get a good grip on the consumer e-mail universe.
Tim Neeld, account manager at list and insert media firm Millard Group in Peterborough, N.H., notes that one of the biggest challenges in finding e-mail lists for prospecting is the lack of direct response files. Only a tiny percentage of the e-mail lists on the market are direct response-oriented, he says, but adds that he's relieved to see the number is growing. The majority of the consumer e-mail files on the market right now come from publishing companies.
While catalog companies also have a significant number of e-mail addresses in their housefiles, they are not as likely to put their names on the market. Neeld explains that not only are publishers being squeezed to generate more profit centers, but catalog companies also value their list rental profit as less important than their other sales objectives. Thus, protecting the e-mail addressand, possibly, future product salesbecomes more important.
The top sectors driving e-mail prospecting on the consumer side, according to Neeld, are publishers and national advertisers. B-to-B direct marketers, he asserts, also seem to be quite active in this channel.
Feit agrees, adding that the B-to-B e-mail list rental market is growing at a steady 20 percent per year.
Of course, the universe of B-to-B e-mail names is smaller than that of its consumer counterpart. Feit estimates the universe of B-to-B e-mail names is about 20 to 25 million. What's more, this calculation does not include what Feit calls "pseudo" business e-mail files. The quality of these lists, she says, isn't backed up with any solid data (such as SIC code, business size, purchase activity) that would indicate the addresses belong to bona fide business leads.
One similarity the B-to-B e-mail list market shares with the consumer sector is source: The majority of B-to-B e-mail lists for rent are offered by publishing companies. Feit notes that seminar firms also are becoming bigger players in this arena.
Thinning the Herd
When it comes to list evaluation, many of the same criteria used to select postal address lists apply to e-mail
address files, such as:
Usage. Reggie Brady, president of Norwalk, Conn.-based direct and e-mail marketing consultancy Reggie Brady Marketing Solutions, likes to find out what other direct marketers are using the list; this information isn't readily available, but you can ask the list manager for it. If some competitors are renting the list, it could be a good sign that it will work for your offers.
Update schedule. With postal files, frequency of updating is important, but not as critical as it is to success in the e-mail channel. Brady points out that some list owners only update every six months; you want to avoid those files.
The two evaluation criteria that are unique to e-mail lists:
Rental frequency. Brady advises marketers to push list owners to divulge how often their e-mail names are rented on a daily or weekly basis; if these names are receiving several promotions a day, she explains, the records on these files will burn out fast. Some list owners have implemented frequency caps to keep their lists from fatiguing. Brady points to IDG Communications as one such firm; its rental names receive no more than two e-mail touches per week.
Quality of permission. Companies might state on their datacards that their e-mail lists are opt-in, but you must perform due diligence to see what level of opt-in was offered to those people who shared their e-mail addresses. The most thorough way to assess the quality of permission is to review a sample of the promotion(s) that generated the names on the list owner's file.
A corollary to permission is determining what type of offer the list owner used to gain e-mail addresses. Just as with postal address lists, you will have a better chance of success if you look for offers that are similar to those you make for your products and services. And, Neeld stresses, you have to make sure the list owner is compliant with Can-Spam regulations.
Don't Forget Selects
For some lists, the mere presence of e-mail addresses is the deepest you can get into an e-mail file.
In general, many e-mail lists offer at least a small range of selects to help marketers pull just the kinds of prospects that fit their offer. For example, it's not uncommon to find age, gender, income and state selects on response files. Large compiled consumer files might offer even more detail, such as ZIP code, hotlines, lifestyle options, credit card buyers and more. Be aware that some of this information is self-reported, and not overlaid from response data enhancements.
Which selects work best for your offer comes down to good old-fashioned list sense, says Neeld. If you have a niche offer, then you'll need specific selects to help you create a targeted list. Also, he says, many direct response e-mail lists tend to be so small that
selects usually wipe out a big chunk of the file; consider carefully how finely you must target, he cautions, or you won't have many names to work with for your prospecting efforts.
Use of selects is just as important for the B-to-B market, where companies are very specific about the types of industries and titles they target. Feit advises B-to-B marketers to look for the same level of selects on e-mail lists that they use on postal address files, including: SIC code, job title, job function, number of employees, sales volume and more.
One select that can be used as an indicator of an e-mail list's quality is the availability of postal addresses. Brady remembers that when publishing company Rodale Inc. put its e-mail lists on the market, the only files getting rented frequently were those with postal addresseseven if the renters didn't buy the postal data. The presence of this information signaled that names on these lists were more likely to be clean and responsive.
Feit estimates about 75 percent of quality B-to-B files contain postal addresses, a high number due to the fact that most publishers collect a variety of information from their subscribers to help advertisers make insertion decisions. These files also tend to offer telephone numbers, an important benefit in today's multichannel environment, says Feit.
On the consumer side, Neeld points out that the datacards for plenty of large, compiled e-mail lists will state that postal information is available. But this information can be about as clean as typing in names from a phone book, he explains. For the most trustworthy data, he advises you to stick to response files or at least grill the list owner about the source of the postal data and how it was matched to the e-mail address.
Quality Comes at a Premium
Prices for consumer e-mail lists are all over the lot, says Neeld, so an average CPM just doesn't exist. In general, the less qualified the list, the lower the price. You can get compiled files for as low as $60/M and high-end, niche files can run close to $200/M.
On the B-to-B side, says Feit, prices remain steady at an average of $400/M, which includes the base list, selects and transmission fees. The wealth of data B-to-B companies offer on their e-mail files and the higher cost per acquisition companies can afford both contribute to the price of B-to-B e-mail lists.
Neeld reports that he has seen some strength in terms of what marketers are willing to pay for e-mail lists, especially by national advertisers. However, negotiation is alive and well for consumer e-mail lists. Just as you would go to a list owner with your test results to discuss what you can afford to acquire new customers from its postal lists, you should conduct the same negotiations on e-mail list prices.
For example, Brady points out that she's found list owners willing to waive the transmission fee to get continuations.
Regardless of the type of list or medium you're considering, it's in everyone's best interest to strike the deal that means everyone gets to stay in the game. Smart prospecting benefits the marketer, vendor, list owner and, yes, even the prospect.