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The 10 Crucial Elements of an Opt-in Email Campaign by Dr. Ralph F. Wilson, E-Commerce Consultant Web Marketing Today, Issue 103, September 11, 2001 The very best list for an e-mail campaign is the "house" list that you develop from your own customers and site visitors. But if you are trying to expand beyond those who already know about your business, you will probably want to rent e-mail addresses from a large opt-in list. In this article I will explain each of the elements in that process. Each step is crucial to your success. But before we start, let me define the buzzword "opt-in." In this context, "to opt-in" means to voluntarily give permission for your e-mail address to be used to send you information via e-mail by advertisers. "Opt-in" can also be used as an adjective describing an e-mail list developed in this manner. "Opt-out," on the other hand, means to request that your e-mail address be removed from an existing list of customers, visitors, etc. and you NOT be the recipient of commercial e-mail. "Opt-out" means, "Unless you tell me differently, I'll feel free to use your e-mail address any way I see fit." It assumes permission by lack of the e-mail recipient saying "No." Reputable Internet companies are learning that "permission marketing" respects customers and prospects, so "opt-in" lists are definitely the way to proceed. Renting opt-in e-mails are not inexpensive. To get the names and e-mail them out will cost you 15 to 40 cents apiece -- that's $150 to $400 CPM (cost per thousand). But the response rate could be 3% to 10% or higher, substantially better than banner ads (0.3%), and somewhat higher than e-mail newsletter advertising. But don't quit reading now just because of the price. Most of the steps I'll outline are similar to e-mailing to your own house e-mail list -- just the scale is different. 1. Define Your Objective The first step is to define your objective. What do you want to get out of your e-mail campaign? Be specific. While you might not reach your objective, being specific is an important key to careful planning. Not: "Send out a million e-mails and hope to get more customers," but "Increase sales by $75,000 and add 5,000 customers to our house list to which we hope to sell more products in the future." 2. Determine Your Target Recipient Demographic Profile Next, you need to determine which recipients are likely to be most responsive to your e-mail campaign. Draw up some demographic and interest profiles of the people you'd like to reach. Let's say you are selling an investment newsletter. You have determined that male golfers are likely to be interested, as well as senior level management, both males and females. The age range of your current subscribers seems to be age 35 and above and you've failed to attract many subscribers in their 20s, even though you've tried. Write that down. Now you have information to communicate to your list broker or list manager who will help them select appropriate lists and recipients for your campaign. 3. Calculate Your ROI (Return on Investment) To spend the kind of money that opt-in e-mail marketing calls for, you need to determine your ROI ahead of time. Do the numbers to make sure they'll work for you. First, make some estimates: $200 CPM with a 5% click-through rate and 5% conversion rate means that out of 1000 people, 5% or 50 will click through, and 5% of them or 2.5 persons will purchase the product or service. Your cost per sale would be $80. Does that sound high? If you're selling a service that brings in $400 over a year's time, that's reasonable. But if you're selling $50 products you'll go broke unless you plan "backend" sales to these same customers. Alternatively, if you can find a way to increase the click-through rate with a dynamite offer or increase the conversion rate on your site, the picture can change rapidly. The key is testing out your plan on a small scale first to determine exactly what the click-through and conversion rates are -- and optimizing them -- before rolling out the full campaign. A third approach might be to find inexpensive ways to develop your own permission-based house list through co-promotions and contests. If you're paying little or nothing for the names, the costs get much more manageable, especially if your house list is being hosted with an e-mail ASP (Application Service Provider), such as Kowabunga's Opt-in Pro (www.optinpro.com) or similar programs (www.wilsonweb.com/cat/cat.cfm?page=1&subcat=me_Email-Soft). However, don't go the spam route; that's a huge mistake for the serious Internet marketer. (Read next month's article, "Why Use Opt-In Lists If Spam Is So Cheap?", www.wilsonweb.com/wmt6/optin_spam.htm) 4. Engage a List Broker or List Manager to Secure a List Next you need to contact a list broker or a list manager. Your representative will ask you: (1) what you want to accomplish (step 1 above), (2) characteristics of the groups you want to target in your campaign (step 2 above), and how big your budget is (step 3 above). List managers and list brokers operate differently. A list manager will help you to choose demographic and interest characteristics to select a subset of e-mail recipients from the lists they manage. Few of the well-known names in opt-in e-mail lists actually own the lists they manage. Companies like PostMaster Direct and Yesmail have partnerships with website owners to collect opt-in e-mail addresses from visitors to their websites. (see the sidebar "Defining the Players" www.wilsonweb.com/wmt6/optin_players.htm) For example, Wilson Internet Services collects opt-in e-mail addresses in partnership with PostMaster Direct (www.PostMasterDirect.com). These are not our subscriber lists, of course. We never give those out. These are people who specifically request to receive e-mails in certain categories and give their permission. We own the list, but PostMaster Direct physically maintains and manages it as part of its network of hundreds of partners and millions of permission-based double opt-in e-mail addresses. Most are categorized by interest, age, geographical area (ZIP code in the US), etc. I have the opportunity to reject any proposed advertiser and PostMaster Direct negotiates on my behalf. You, the advertiser, give a list manager the criteria you'd like to select from, and your representative will tell you how many e-mail addresses in their network meet those specifications, and how much they charge per e-mail address. Make sure that you test the price. Rate card price is the stated price, but if you do some negotiating, you can probably get a better price. They want your business and currently this is a buyer's market. Negotiating for the best price is where a list broker can come in very handy. A list broker works a bit differently than a list manager. List brokers use catalogs of opt-in e-mail lists to find those most suitable for you. They rely heavily on the SRDS (Standard Rate and Data Service, www.srds.com), that provides the up-to-date Interactive Advertising Source (subscription is US $561 per year). They also learn about new lists that advertise in DM News (www.dmnews.com) and other trade publications. Let's say your list broker is trying to help you get paid subscribers to your investment newsletter. The list broker might contact a list manager, such as The Lake Group (www.lakegrp.com), which had a full-page ad in a recent issue of DM News. They represent periodicals such as The Economist, EDGAR Online, and ThomasRegister.com. Edgar Online claims 196,941 users at postal addresses and 307,000 opt-in e-mail addresses. Edgar Online seems like a good match for an investment product. I called the Lake Group to inquire about the EDGAR list and asked several questions:
If I want to send an e-mailing to two large lists, each managed by a different list manager, and I want to remove the duplicates between the lists? That's not so easy. While postal address lists are commonly released to other list managers for merging and purging (also called "de-duping"), e-mail lists are released only rarely. There's a lot of paranoia among list managers about list theft. Perhaps a creative list broker could negotiate with the list managers to send their lists to a trusted third-party list service for de-duping. Then the list managers would probably fight over which list got priority for the duplicates between the lists. Ah, life in the big city. 5. Determine the Quality of the Lists After you've made a preliminary decision on the lists you want to use and the demographic characteristics you want to select for, you need to determine the quality and responsiveness of the lists. Always test a small portion of the list to see how responsive it is before you commit to the entire list. Find out the minimum required for a test -- often 2,500 to 5,000 names -- and then track the response. Some lists will work very well for you, others just don't. You won't find out without testing. Testing costs you money, so do some other quality checks before you test. Ask the question, "Is this actually an opt-in permission based list?" I couldn't count the number of e-mails I received that said, "This isn't spam but an opted-in...." Right! Some of these e-mails have nothing at all to do with my business or interests. I KNOW I didn't opt-in, but somehow, somewhere, someone labeled it "opt-in" and now it is sold that way. For example, I received a call recently from Dunn & Bradstreet to update their records on the congregation that I pastor. (They do work at keeping their listings up-to-date.) "Do you have an e-mail address?" the caller asked. "Yes," I said and gave it to him. "What are you going to do with that e-mail address?" I asked. "I don't want it sold." "Is the e-mail address posted on the website?" he inquired, somewhat testily. "Yes," I said, "but I don't want it sold." "We can use an e-mail address so long as it is posted on a company website," he said. "I insist that you remove my e-mail address from your database," I said, even more testily. Silence. I think he finally did remove the e-mail address from his records. Then I phoned Dunn & Bradstreet to inquire about getting e-mail addresses of companies and company contacts sorted by SIC industry codes. Some e-mail addresses are available. "Are they opt-in?" I asked. "These are raw addresses -- neither opt-in nor opt-out," I was told. An accurate statement. "How do I receive the information?" I asked. The response was that once I paid for it I could download it from their website -- including the e-mail addresses. Before you use a list, you should ask the list manager for the names of the websites and the URLs from which the information was being collected. Also ask if it is "double opt-in," that is, whether the recipient receives a confirmation e-mail that must be responded to before the address is included in the opt-in list. Then go to that URL, observe the opt-in procedure, and read the privacy statement. Don't just believe the list manager, check it out for yourself. Once you've satisfied yourself that the list REALLY is permission-based, perform tests following steps 6, 7, 8 and 10 below. 6. Develop the E-Mail Creative The e-mail message, formatted to send out to recipients, is called the "creative." E-mail marketing has two parts: (1) the text of the message and (2) the text laid out attractively in the e-mail. The text of the message is prepared by a copywriter (not to be confused with a "copyrighter"). E-mail marketing is a new medium, but the principles follow rather closely the trail blazed by direct marketers over the last half century. You don't have to reinvent the wheel; good information abounds. I found a little book by Robert W. Bly to be useful, The Copywriter's Handbook (Henry Holt, 1985, ISBN 0805011943). I also like Richard Bayan's Words That Sell (Contemporary Books, 1984, ISBN 0809247992). It costs you some money to hire a copywriter if you don't have one in-house, but it's well worth what you spend. Let's say you end up e-mailing 50,000 pieces at a cost of $200 to $300 CPM (cost per thousand). That's $10,000 to $15,000! A copywriter might cost $500 to $1000 or more, but as a result of his or her work your response rate might double, triple, or quadruple. I've seen this multiplier when writing ads for my own products. A few words, a powerful phrase, a creative comparison, an insightful idea, and the response can go through the roof. Or land flat. Do-it-yourselfers beware. Once the message has been prepared you'll need to decide whether you want to send it out via text or HTML. Large list managers are often able to tell whether a recipient's e-mail program can read HTML e-mail and are able to send text only or specially formatted e-mails to certain recipients, such as AOL 4.0 and 5.0 users and Hotmail.com users. While everyone can read text e-mails, I estimate that these days that about 90% of Internet users can read HTML e-mail. I recommend HTML e-mail for your commercial e-mail campaign. HTML e-mail allows you to format your message with an attractive font face, headline, color, look-and-feel, and graphic images, which are downloaded from the e-mail service's website when the e-mail message is opened (so long as the recipient is connected to the Internet at the time). While the words of the message are primary, the visual context can make the difference between success and failure. HTML e-mails pull a substantially higher level of response than text-only e-mails. To design the HTML portion of the e-mail, I recommend using an experienced designer (not just an HTML jockey). Just as ad agencies hire graphic artists to lay out their client's brochures, you need someone with an artistic sense of color and balance to design your e-mail creative. To ignore this is stupid and wasteful. Do-it-yourselfers double-beware. Perhaps the most important part of the creative is the subject line -- what the recipient sees when surveying an inbox full of messages. Which words will make recipients open your e-mail instead of deleting it? If you can personalize that subject line with the recipient's first name, by all means do it. The subject line is to the e-mail message as the headline is to a traditional ad. Developing a killer subject line is the job of your copywriter. Ideally you should conduct a small test of several subject lines and see which one is opened more often (determined from the logfiles for the graphics in the HTML e-mail). 7. Prepare for the E-mail Blast I don't really like the term "e-mail blast," but that's what the list managers and brokers call it. And, if it describes the speed with which hundreds of thousands of e-mails are sent out, it may be a worthy expression. Before the "blast," however, comes the work of final preparation and sign-off. By this time you've done some test e-mail runs of 2,500 to 5,000 pieces, so it isn't all new. But these are the steps: The test e-mail is prepared. The creative people -- the copywriter and designer -- have prepared the piece. Now a tiny test e-mailing goes to the list owner, the list manager, the list broker (if any), and the advertiser for approval and sign-off. This is your final e-mail. Now they -- and you, the advertiser -- check everything. Text layout. Make sure the pictures appear where they should. (The graphics aren't attached to the e-mail, of course. That would make it too large to e-mail easily; they are downloaded when the e-mail is opened.) Make sure you check all the links. These won't be simple URLs such as http://yoursite.com/landingpage.htm, but will be coded for tracking. The URL will probably go to a redirect script that counts and tracks the click-throughs. Don't just look at the URL -- actually click on it. Having done many, many e-mailings, I've found it's the links you forget to check that are always the bad ones. There's an ancient saying rattling about in my mind: "There's many a slip between the cup and the lip," or something like that. 8. Design and Test Your Landing Page Equally important as the e-mail message is the landing page where links from the e-mail message send the recipients. In an article for paid subscribers of Web Commerce Today, 2/15/01, I discuss in some detail "10 Steps to an Effective Advertisement 'Landing Page.'" I won't rehearse them all here, but in summary the landing page must relate to the e-mail received, restate the offer, respond to questions that are in the prospect's mind, and make the sale. It's wise to have your copywriter prepare both the e-mail creative AND the landing page, since they must work together -- and work hard -- to close the sale. Assuming you have a good offer, a poor landing page might get a 1% to 5% conversion rate from an e-mail campaign (in other words 1% to 5% of the people who click on the e-mail actually make a purchase). A good landing page might get a 10% to 15% conversion rate. Note: the conversion rate from an e-mail campaign is likely to be higher than the normal conversion rate on your website. Done right, the e-mail campaign is bringing buyers who are mostly sold already. I remember a conversation with Adam Boettinger, founder and CEO of I-Advertising Discussion List (www.i-advertising.com) when he was working for an agency that prepared truly spectacular creatives for advertisers. He told me that the best creative would fail unless the advertiser's website was ready to sell the customer. Too many advertisers neglect their own website, and then blame the advertising campaign, muttering, "I spent all that money and nothing happened!" Think of your e-mail creative as a partner with your website landing page. Like salt and pepper or Batman and Robin, they must work as a team. 9. Send Out the E-Mail Blast After you've tested all the components -- the list responsiveness, the subject line, the creative, the graphics, the links, and the landing page -- then it is time to send out the e-mail blast. I am amazed at how fast this happens, using high speed mail servers and list software! When should you send out your e-mails? "Don't send them on Mondays," says Roberta Beach, list broker and owner of 5 Star Media (www.5starmedia.com). "On Mondays people have their mind on getting caught up from the weekend. Nor are people in the mood to read e-mail ads on Fridays. Their minds are on the weekend. Tuesday, Wednesday, and Thursday are always better days to send out e-mail ads." The cost to send out the e-mails is called a "transmission fee," and it can range from $25 to $100 per thousand e-mails. You won't have a choice on who sends out the e-mails. For large individual lists, each individual list owner selects the e-mail service. The sender may or may not be the list manager. However, list managers such as PostMaster Direct or YesMail will do the e-mailing in-house, and often include that charge in the overall price they quote. 10. Study Tracking Reports to Determine Effectiveness Once the e-mailing goes out, the link tracker scripts begin to work, tracking the number of click-throughs for each individual link in the creative. While these systems have the capability of tracking not only the number of click-throughs but also the e-mail address of the recipients who clicked on the links, you'll never get this information from a list you rent. But if you have a house list sent out by an e-mail service, you'll be able to identify those on the list who have an interest in certain products or services, so you can follow up with them more intensively in the future. Successful direct marketers are always testing. You might want to use the main mail-out to test also. The big items should have already tested. But you might experiment with varying some element of each group of e-mails that go out to see the effect on the click-through rate. That way you'll know better which variation works best for you next campaign. If you're a do-it-yourselfer, you can set up a simple link tracking program on your website, such as Ron Woolley's free LnkinLite Perl script (http://www.dtp-aus.com/cgiscript/lnkinlte.shtml). The success of an e-mail campaign, however, is not measured in click-throughs but in resulting sales. If you do much advertising, I strongly recommend that you get software that enables you to track both click-throughs AND sales. Affiliate management software can do this. You can learn more about the software in my exclusive Report on Affiliate Management Software: Editor's Choices and User Feedback (www.wilsonweb.com/ebooks/affilisoft.htm). You can purchase a good program for as little as $199, such as Groundbreak.com's Ultimate Affiliate Package (www.groundbreak.com) installed on your own website. Kowabunga's My Affiliate Program (http://www.myaffiliateprogram.com/index.asp?3051), which I consider the "Cadillac" of the non-network affiliate management software, costs $795 set-up and $50 per month. Other programs include Little Salesmen Affiliate System (www.cgitoolbox.com) and ASSOCtrac (http://www.marketingtips.com/assoctrac/t.x/15267). Does all this sound complex? It is. Developing and executing an ad campaign takes a lot of planning, costly key elements, a strong ego, and tolerance for risk. The truth is that you won't hit the nail on the head in every e-mail campaign. But as you do this, you'll get better at it. Start small, testing lists until you gain some confidence in your ROI, and then go for it. E-mail marketing may be the shot-in-the-arm that propels your online business to success. |
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