Study: E-mail Addresses Need Validation

Nov 27, 2006 10:08 PM  By

The increased use of e-mail communications as a channel serving information as well as for increasing sales means that capturing valid, deliverable e-mail addresses early in the relationship is critical for most online businesses.

According to a study by Newton, MA-based e-mail list hygiene company FreshAddress, 50 of the top online retailers lost an estimated average of 3,900 potential customers a month, $563,550 per month, and $6.7 million in sales in 2005 because of typos in e-mail addresses.

The fallout can be a disgruntled customer or prospect, loss of revenue from a potential sale, and a negative impact on your brand. If the customer did not catch his/her own typo, and if the online registration system did not flag it for the customer, then that customer will be lost.

Beyond simple typos and errors that cause businesses to lose contact with customers, FreshAddress says there are more threatening and costly issues at stake:

  1. Lost revenues: How much money was lost this past holiday season as online shoppers registered to receive coupons and promotional offers, and then never received the offer because of a careless typing mistake?
  2. Wasted marketing: Marketers spend significant monies to acquire and retain customers. But that expense is wasted, as well as the opportunity to cultivate a long-term relationship, when customers actively seeking news and information are inadvertently left out.
  3. Poor customer experience: Online retailers risk creating a negative experience for customers who sign up for newsletters, promotional information, and customer service assistance online and then never receive the appropriate follow-up attention. This can result in customer attrition, angry or disenchanted follow-up from the customer and negative brand impact.
  4. Blacklisting: When ISPs receive too many bouncing messages from a single source or too many to their spam-trap addresses, they often blacklist the sending company. This means no e-mail messages from that particular company can get through, which means no e-mail communication with the company and their customers. And the ISP may not bother to inform the company that they have been blacklisted.
  5. Abuse reporting: it is very easy for one malicious user to register “abuse@yahoo.com” and send a retailer’s newsletter directly to this spam reporting address. It can take a tremendous amount of time and energy to undo this damage.

But while there are many reasons for validating e-mail addresses, FreshAddress has found that most marketers could be doing a better job of keeping their list clean.

The company conducted nine tests during holiday 2005 using invalid e-mail addresses, ranging from misspellings of the word “hotmail” to missing “@” symbols to dead domain names.

None of the 50 retail Websites correctly rejected all nine of the invalid e-mail addresses tested. The strongest performing company was the gap.com Website, which allowed only one bogus e-mail address to be registered and generated an error message for all of the others.

All 49 of the other websites tested allowed two or more types of invalid e-mail addresses to be registered. Ten percent allowed three invalid entries, 50% allowed four invalid entries, 20% allowed five invalid entries, and 16% allowed six or more invalid entries.