Renting an e-mail list can be an effective way to do e-mail marketing. But it also can be a minefield. While the industry has come a long way in the past 10 to 15 years, it's still good to go into any e-mail rental situation with a "buyer beware" attitude. Here are some tips to help you be a smart e-mail list renter:
1. Work with a legitimate list owner or broker: Most traditional list brokers handle e-mail, as well as offline direct marketing lists; this is the best place to start your search for an e-mail rental list. Many offline direct mail lists have e-mail counterparts. In my experience, these are the lists that offer you the best chance for success.
2. Know the average cost of legitimate e-mail lists: There's a perception that e-mail is "cheap." While it can be cost-effective, legitimate e-mail lists are rented at rates comparable to (or above) offline direct mail lists. Here are the figures for average cost per thousand names (one-time use) from the Winter 2010 Worldata List Price Index:
- B-to-C e-mail lists: $110
- B-to-B e-mail lists: $284
- International e-mail lists: $408
Remember these are averages; it's not unusual to pay more for a proven e-mail list. If someone offers to rent you a list at a significant discount over the figures above, beware. It's like someone offering to sell you a brand-new Mercedes for the price of a Vespa scooter—there's something wrong. Good, legitimate e-mail lists aren't rented at a deep discount to fair market value.
3. Insist upon seeing a datacard: I don't know any successful offline direct marketer who would rent a list without reviewing a datacard. The same rule applies to e-mail lists.
The datacard should tell you how the names were acquired. Make sure what you read makes sense. If the names were acquired online, visit the Web site and make sure the opt-in language is prominent.
4. Never agree to handle the e-mail send on your own: In the offline world, the list owner or broker provides an electronic file or labels to the renter, who handles the send. In the e-mail world, the list owner or broker doesn't provide either of these. Instead, you provide your creative to the owner or broker, who then handles the send for you.
This is done to protect the integrity of the list. It also assures that the bulk of any spam complaints or blacklisting will impact the list owner or broker—not you. If someone offers to rent or sell you a list but requires you to handle the send on your own, beware.
5. Always test when you're mailing to a new list: As with offline lists, you want to test a small portion of the list before you rent the entire universe of names. In the offline world, a test quantity is usually 5,000 names. In the e-mail world, I prefer to test at least 10,000 to get a good read on the results. Legitimate list owners and brokers will allow you to do this.
If you're just getting started, test three different lists with two creative executions (one being a control version that is successful to your house list, if possible). In my experience, this type of a three-by-two grid will usually yield at least one successful list/creative combination that you can roll out.
6. Develop performance projections: Before you test an e-mail list, run the numbers. Determine what type of response you need to break even—and what ROI you'd need to make this a "winner." If those figures are unrealistic, reconsider your list rental strategy.
7. Have realistic expectations: In my experience, an e-mail rental list will perform, at best, about half as well as a marketer's in-house e-mail list. If you don't have metrics from your own house list, then assume no more than half of e-mail industry benchmarks. According to the Epsilon Q4 2009 North America E-mail Trend Report, the following are overall averages for house e-mail lists:
- Open rate: 22 percent
- Clickthrough rate: 5.9 percent
The true performance metric is leads, sales or dollars generated. Start with the clickthrough rate and estimate what percentage of these folks will make it to the finish line and help you reach your performance goal.
Often, rental lists don't perform even half as well as a marketer's house list. Once in a while, I'll find a list that performs better than the marketer's in-house e-mail list, but that's rare. Understand this going in, and set your expectations accordingly.
8. Monitor deliverability: Getting your e-mail to the recipients is always a concern with e-mail. Prior to signing a list rental agreement, request the IP address(es) that your e-mail will be sent from. Once you have the IP address(es), do some research on reputation and deliverability. There are many Web sites out there that offer this service for free, including:
Each of these Web sites uses slightly different criteria. I recommend that you check the IP addresses on two or more and see how they rank. Be sure that the IP address(es) your e-mail will be sent from have good reputations—and respectable deliverability.
Check these same Web sites again during or just after the send, to make sure nothing has changed. Reputation and deliverability are moving targets. An IP address that was "clean" yesterday can be tainted today by a send that triggers spam concerns among the ISPs receiving the e-mail messages.
9. Include a reputation/deliverability clause in the contract: Be proactive in protecting yourself from deliverability issues. Make sure a clause in the contract addresses deliverability problems. Best-case scenario is a money-back guarantee, triggered if the IP address reputation or deliverability falls below agreed upon levels during or immediately following the send. If your list owner or broker won't agree to that, ask that the remedy be a repeat send from a "clean" IP address as a "make good." If the list owner or broker won't agree to that, beware.
Jeanne Jennings is an independent consultant specializing in e-mail marketing strategy and author of "The E-mail Marketing Kit." She can be reached at email@example.com.