It’s a dirty secret of the direct marketing world that too many businesses buy and sell customer lists with very little care. As a sender, you probably receive gray-market offers every day to rent or purchase lists of addresses.
Some of these might even be advertised as “opt-in” lists. Spoiler alert: they’re not. Even if a customer might have opted into one vendor’s mailings, they haven’t opted into yours, and the global anti-spam community doesn’t consider permission to be transferrable.
As tempting as pumping up your list volume might be, don’t do it. The risks to your reputation and business from relying on lead generation or marketing list vendors are high. Here are seven ways this shady business could hurt you.
7 Reasons Buying Subscriber Lists is Risky Business
- High unknown user rate. Lead and marketing lists are sold by quantity not quality. Unfortunately, vendors that sell or rent lists are not always honest about the quality or true nature of opt-in status. The only way to assure that a subscriber is current, real, and has truly opted in is to do it yourself through standard channels such as web-form signup. ISPs see a high spike in unknown users as a negative flag on your reputation and will block or send future messages to the spam folder.
- Spike in spam complaints. You are not the only marketer that the list has been sold to or rented to. Subscribers who suddenly start getting an influx of messages they didn’t opt into will unsubscribe, or worse, report them as spam. You will see a high spike in complaints or feedback loop reports, as well as unsubscribes. ISPs see this as a surefire reason to be very skeptical about your future mailings.
- Low opens and clicks. ISPs have become increasingly sophisticated in how they look at user engagement when assessing bulk mailings. Data they assess have moved beyond bounces, complaints, unsubscribes to also include opens, clicks, and other behavioral statistics. ISPs are measuring the quality of messages to decide whether to allow you to continue sending to their subscribers. Having a low open/clicks ratio is a good indicator that your messages will land in the spam folder.
- Violation of terms of service at your ESP. Email service providers often prohibit the use of purchased or rented lists, or sending mail to recipients who have not opted in. Violating these policies will give an ESP the authority to terminate your contract. (SparkPost is no exception. We only allow opt-in messaging. See com/policies for details on SparkPost’s Messaging Policy.)
- Scoffing at ISP best practices. ISPs expect senders to do the legwork and to follow the best practices they’ve documented. They will block any sender that does not comply. Most major ISPs offer a postmaster support site that details their expectations. Across the board, opt-in—and often double opt-in—is required by the ISP.
- Drop in ROI. Email marketing is a business, and there is a cost for every message sent. However, with that investment, you’re banking on a return. Sketchy lists not only have an absolutely lower response rate, reducing your ROI, but the risk compounds significantly when the effect of bounces, unopened deletes, and spam flags are factored into your sending reputation. These negative statistics suggest to ISPs that your future messages should be blocked or filed as spam. If even your most interested subscribers don’t receive your message, your ROI will plummet.
- Real legal jeopardy. With today’s global economy, major ISPs have a global presence and provide inboxes for people around the globe. AOL, Apple, Gmail, Hotmail, and Yahoo all provide webmail services to people in many countries. You may intend only to send to local recipients, but unbeknownst to you, a subscriber might be located in a country with a strict legal requirement for opt-in. Both Canada and the European Union have laws that strictly regulate commercial email delivery. In both cases, the regulatory framework requires express consent through an opt-in—opt-out isn’t good enough—and they provide for punitive remedies if violated. In Canada, CASL violations can require you to pay an administrative monetary penalty of up to CAD$1 million per violation for individuals, and CAD$10 million for businesses. In the EU, violations of the Opt-In Directive can result in fines of up to €500,000 for serious breaches of the law.
When it comes to deliverability and customer engagement, quality always trumps simple quantity. Don’t take a risk on the unsavory practice of buying third-party lists.
We had the great pleasure of inviting Jack Hogan, CTO of Lifescript to speak at our recent webinar: Email Woes! 5 Things You’re Missing with the Wrong Email Platform. Jack stated that the 5 most important things to look out for when choosing an email platform were manageability, scalability, performance, extensibility and cost. During the webinar, Jack also addressed certain questions raised during the Q&A stating that list size is no longer the determining factor of a marketing program’s success – list activity/engagement and email deliverability are. In light of his comments, we sat Jack down after the webinar where he elaborated on nine crucial principles for success in managing email lists and message transmissions. Here’s what he said:
“Good deliverability is based on very simple principles around list building, message transmission, and list management.
List Building Principles:
- Only work with reputable lead generation partners or internal processes that have controls in place.
- Never use pre-checked opt in forms or purchase lists.
- Validate all names through list hygiene vendors.
Message Transmission Principles:
- Your IP addresses are critical and this is how ISPs know mail is actually coming from you so authenticate with DKIM and SPF.
- Respect ISP posted transmission guidelines and utilize an MTA or ESP that adheres and adapts to these changing guidelines.
- Track your deliverability through all means available including list activity data, delivery monitoring vendors, and internal list seeding.
List Management Principles:
- Send engaging content.
- List engagement, not list size should guide all list management practices – remove hard bounces immediately, make unsubscribe simple, and remove inactive users.
- Use data you already have to enhance engagement and grow your lists.”
At Lifescript, half a billion emails are sent out a month, so pay attention because Jack definitely knows what he is talking about. If you’re interested in learning more from Jack, check out the tweets below from his recent webinar, Email woes! 5 Things You’re Missing with the Wrong Email Platform (credit michael). You can also learn more about how Lifescript overcame high volume sending challenges in this case study.
Get more insight on improving your email deliverability with the Six Secrets of Successful Senders guide!
This year, Acxiom released its first-ever consumer marketing survey that asked 1,000 regular consumers about their adoption and use of email, social and mobile. Ryan Phelan, VP,Global Strategic Services at Acxiom, revealed key findings, and insights on how to execute multi-channel communication programs in order to improve KPIs and customer lifetime value during the final session at Interact 2013.
Idle time is “email time”
Where does email fit into the daily life of an average consumer? Findings on consumer behavior from the 2013 Acxiom Digital Impact Consumer Digital Study showed that:
- 91% of consumers check email on their mobile phones
- Nearly 49% of respondents have an email account for emails they rarely intend to open
- 36% of respondents check email, social media and texts before doing anything else after they wake up
- 21% check their email before breakfast
- 60% never read emails that are saved to be read later
- 72% of consumers read email when they are bored
- 29% read email while in the bathroom
While 40.2% of respondents cited discounts as the most important reason for signing up to receive emails from companies, 22.7% signed up to participate in product research, 21.1% to get product/service updates and 13.1% because they were brand fans. In short, consumers are not just looking for deals and discounts and email marketing is not just about the deal of the week.
Change is required in both emails sent and programs enacted
Some 30 – 40% of overall email revenue is reported by retailers as being from trigger programs. Here are some other tactics to consider which involves utilizing customer behavior to deliver the right message at the right time.
- Next Logical Product What has your customer bought? What are they most likely to buy next based on an analysis of common customer behavior?
- Browser Marketing Your customer has been browsing your site. Examine their behavior and send them emails related to products they have looked at.
- Event Has your customer abandoned their shopping cart? Send them an event triggered email to urge them to complete their purchase.
- Transactional Inform customers of a financial transaction or some update to a specific purchase.
Reducing Customer Churn in Email Lists
Instead of just opt-out options, provide consumers with opt-down options that allow them to set the frequency of emails and select the type of emails they want to receive. This can reduce attrition by up to 40%. Also, make sure to survey customers on reasons for opting out to improve your understanding of consumer behaviors.
List Verification, Customer Preferences and Data
Use list verification services and make sure aged records are cleaned before sending. Ryan recounted a horror story of a client who sent to email addresses from an old CD from 2002. Make a guess what happened to that client’s deliverability rate… not pretty.
Ryan encouraged marketers to find out more about client behaviors and email preferences with questions, but cautioned against creepy use of data – the data that consumers do not expect you to have.
Keep in mind that your direct competitors are not the only people you need to worry about. Ryan ended his session with these key takeaways:
- Customers – through response, behavior and analysis – want smart marketing.
- Mobile integration enables subscribers to better convert.
With the digital landscape and customer behavior constantly changing, marketers need to evolve with the times and pay attention to customer behavior to stay ahead of the competition!
Learn how to extend customer lifetime value through transactional email and real world case studies with the Transactional Messaging Best Practices eBook.