List Acquisition (Be Afraid). Build, Don't Buy.

July 23rd, 2009 | By Anthony Schneider | 1 Comment


Online Customer Acquisition: The Good, the Bad and the Ugly

A lot of marketers want to build their opt-in lists. Of course. Opt-in lists mean more email recipients, more buzz, more word-of-mouth, more queries, more sales.

It follows that a lot of marketers consider licensing third-party lists, running promotions to increase opt-ins, or buying ad units in email newsletters. Licensing a third-party email list can also work, but it should be a last resort. Here’s how we think about list acquisition and other ways to increase opt-ins.

Be Afraid (of List Acquisition)

The pros: you get access to a targeted list of potential customers and you can mix and match using multi-channel marketing including email, direct mail and SMS.

The cons: email lists are expensive, many times contain bad email addresses and often result in complaints. Licensing a list, testing vendors, developing creative and providing HTML all adds up to an expensive one-time transmission to people you don’t even know. Worse, many third parties send sub-standard emails that wind up undelivered or in junk folders. And who wants to pay to send a crappy email that doesn’t even reach the intended recipient?

The Email Experience Council is unequivocal on the subject: “Don’t purchase lists,” they warn. “Unsolicited messages have the highest complaint rates and could ruin your reputation.”

Size Matters, But Not as Much as You Think

Do you want  an email list of 1,000 subscribers who always buy your product, or 10,000 who never do? Subscriber quality is far more important than subscriber quantity.  List size is an easily measurable facet of email marketing, but it’s not a result. Lists are means not ends. So, worry about how well your list is performing (opens, clickthroughs, conversions, etc.) more than you obsess about adding new names.

Not All List Vendors Were Created Equal

Let’s say you know all the hazards but you’re intent on licensing a list. Okay, we understand. But remember, there are good list vendors and there are shoddy list vendors. Before you commit to a major list buy, get to know your potential list vendor, run a test, run the numbers, and look closely at how they deliver emails and report results.

If you haven’t tried building your list organically or sponsoring a third-party newsletter, we recommend you try those tactics first.

Build Don’t Buy

Try to grow your opt-in list the old-fashioned way: build your own. Home-grown lists always perform better.

If you have a quality existing opt-in list, use a sweepstakes, special promotion or referral marketing program (like Peersuasion) to expand your reach. Use your current subscribers to generate additional interest through word-of-mouth marketing and other promotions, and remember to ask the referrals to opt-in (an unchecked opt-in box to capture subscribers is standard best practice).  How are the results? We’ve seen sweepstakes that grow opt-in lists by 20%, and we’ve seen word-of-mouth programs double the size of an opt-in list in one week.

If you don’t have a big list already, then start capturing opt-in email addresses on your Web site, within your social media environments, at trade shows, in-store, everywhere.

B2B: Try Trade Publications

Many B2B trade publications will license their list for suitable marketers. While not necessarily less costly than using a list vendor, these lists are targeted and the recipients responsive. We have seen very good results for B2B marketers everywhere from construction to insurance to medical optics.

Eric van den Heuvel, Director Channel Planning for The Gate Worldwide, is a proponent. “The Gate’s B2B clients have increased their usage of list rental and newsletter sponsorships from B2B media providers,” van den Heuvel says. “Better performing programs have seen open rates as high as 30%, with 30% of those clicking through to the destination page.”

B2C: Try Email Ads and Sponsorships

B2C marketers may want to sponsor or place an ad in an email newsletter. Marketers are seeing high clickthroughs from sponsored newsletters with appropriate demographics, reach and other attributes.

Putting your message in a successful, appropriate email newsletter means you get access to an existing, attractive audience.  There are a lot of good newsletters out there, so chances are there’s one that is a good fit for your brand and demographic.

“Time Out helps advertisers to reach our audience of young, active urbanites,” says Marci Weisler, Digital Business Director for Time Out North America. “TONY promotions are written by us, in our style, allowing our clients to leverage the TONY brand equity and have a meaningful interaction with our audience, resulting in higher response rates.”

Emily Carpenter, Web Editor of Garden & Gun, a Southern lifestyle magazine, puts it this way: “Sponsoring an email newsletter is one of the most direct paths to a new customer.” And Garden & Gun marketers have seen some strong results. “Oftentimes our sponsors/advertisers receive more clickthroughs than the subjects of our newsletters,” Carpenter says.

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  • Jim Trimble

    Great article. Seems like every client wants to buy… but there’s no free lunch.

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