E-MAIL MARKETING: E-lists: Big bucks, few names

So far, it’s hard to tell if e-lists are worth the price – or the trouble

As more Internet-savvy consumers buy goods online, more catalogers are anxious to reach them via e-mail. Despite the growing interest, however, the number of e-mail addresses available for rent remains small, the cost remains high, and it’s too early to judge their effectiveness.

Regina Brady, team leader at Greenwich, CT-based list firm Direct Media, estimates that 18 million-20 million e-mail addresses are available for rent, with business-to-business accounting for 20%. But Jim Calhoun, CEO of e-marketing service bureau Popular Demand in San Francisco, is more conservative. “I’d say there are maybe 11 million e-mail addresses on the market, and with dupes that may be only 10 million.”

Unfortunately, not many of these e-lists are transactional. A search of SRDS’s Direct Marketing List Source, for instance, yielded only 76 lists containing the word “e-mail,” and most of these lists were of opt-in names of newsletter subscribers. “If catalogers were to put their e-mail files up for rent, we would absolutely mail to them,” says Robin Lebo, director of customer acquisition for Charlottesville, VA-based consumer electronics mailer Crutchfield. But very few catalogers – including Crutchfield – are willing to release their e-lists, primarily because they have promised customers that their e-mail addresses will not be given out to any third parties.

Tammy Williams, marketing manager at Calgary-based graphics catalog EyeWire Studios, is in the early stages of developing an e-mail marketing program and plans on testing e-mail lists for prospecting. While her existing customer file generates some pass-along names, “there’s not a whole lot else out there” for prospecting, she says.

Because of their relative paucity, e-lists typically command base prices of $200/M and higher. “E-mail list pricing is way high, especially for nontransactional lists,” Lebo says. And Williams claims some e-list owners are asking as much as $300/M for their names. Then there are the transmission fees. Many list owners require renters to transmit the list through a third party, allowing the renters to use the names without actually taking possession of the lists.

Thomas Register, a New York-based marketer of manufacturing information to businesses, began offering 100,000 e-mail names in September. E-marketing manager Laura Kuras says the company charges $250/M for the list plus $150/M for transmission via a third party. Likewise, Cahners Business Lists charges a base rate of $250/M for its e-newsletter lists, plus a transmission fee of $105/M, says Dan Dale, marketing manager for the Des Plaines, IL-based firm.

But while e-list owners can command big bucks, they also pay a much higher commission than on traditional lists. “Splits [on e-lists] are much more aggressive than what owners are used to,” Popular Demand’s Calhoun says. A 50% brokerage commission is typical, he says. (By contrast, brokers typically charge a 10% fee for print lists.)

What $200/M buys you

Given how much they have to shell out for e-lists, renters demand that every name on those lists has opted in. “You need the permission of the consumer to sell that name,” warns Direct Media’s Brady. “It’s important to have a record of your opt-in dates and how they opted in” – whether it was while registering on your site, for instance, or in response to an e-mail. Some potential list renters may also want to view the conditions and wording of your opt-in offer.

Unfortunately for renters, not all e-list owners heed this advice. David Giacomini, e-commerce manager for Medford, OR-based Bear Creek, has had such poor response to tests of outside e-lists that he now sends e-mail campaigns only to the cataloger’s house file. “We had no way to confirm opt-in dates, or even that the quantity that we mailed matched what we were told. It was a leap of faith for us,” he says.

Until the cataloger, whose titles include food book Harry and David and plants catalog Jackson & Perkins, can find well-documented and well-segmented lists (with proof of opt-in dates and self-reported product interests and demographic information), it will forget about rolling out an e-mail prospecting campaign. In the meantime, Giacomini says, Bear Creek’s e-mail program targeting house names yields response rates similar to those of its print catalog mailings.

To get your customers’ consent to market their e-mail addresses, Regina Brady, team leader at list firm Direct Media, suggests presenting the opt-in notice during the Website registration or ordering process. “Sign up opt-in names as soon as possible. Take advantage of the interest and excitement generated by a sale, and get the customer to opt in during the process.” The longer you wait, the harder it is to get customers to opt in, she says.

Even after establishing customers’ willingness to receive e-mail offers, Brady says e-list owners must remain vigilant. “You have to keep the list clean. Immediately honor opt-out requests, and include opt-out messages in all correspondence with your customers.” Brady recommends that e-list owners include in every rental contract the condition that renters display messages that enable recipients to opt out of the rental mailing and also of the owners’ lists.

For Laura Kuras, e-marketing manager of b-to-b information supplier Thomas Register, one of the greatest challenges of compiling an e-list is determining how much information to ask from customers registering on the site. “There’s a fine line you walk with registration. You discourage people from doing it when you ask too many questions,” she says.

1. Get Website registrants to opt in for e-mail up front. Be prepared to document the date and prove the opt-in status of names.

2. Use the registration process to segment your e-list by interest, product preference, job title, industry, etc.

3. Consider working with a third party to e-mail offers to your list without giving away your names. Make sure you can provide renters with proof of quantities mailed, received, and returned.

4. Give recipients the chance to opt out in all correspondence – and make sure list renters extend this chance in offers they mail to your list.

5. To combat high churn rates, collect a primary and a secondary e-mail address from registrants.

6. Immediately remove opt-out names and expired addresses from your list.

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