Could you still afford to mail your email list if you had to put one of these on every email that went out?
It’s Web Wednesday. And admittedly, this is my least favorite “theme day” of the week.
On Mailbox Monday I get to answer YOUR questions — which definitely makes me feel like I’m delivering content you’ll find valuable…
On Copy Tuesday, we talk copywriting — a huge part of my business, the most common profession for my readers, and something I could riff on for days on end…
On Strategy Thursday, we talk business — where I get to the heart of building a business selling direct to customers, using direct marketing (strategy is actually even more fun for me than writing copy)…
On Grab Bag Friday, I talk about whatever I want — and who wouldn’t enjoy that?!
But then there’s Web Wednesday…
And I know internet marketing is big and all, but I DO NOT consider myself to be an internet marketer. I don’t fawn over internet marketing techniques and fads. I don’t even consider it to be that different than other media, with the exception of its easy multimedia capabilities and scalability.
In short, I don’t believe the internet lives up to the hype when it comes to marketing. Even though I do most of my marketing and generate most of my revenue (for myself and clients) on the internet.
But alas, every week, “hump day” comes around, and it’s time to talk about the web.
And so it goes again!
(Sorry for this little diversion — just trying to “keep it real.”)
To make the most of this Web Wednesday, I’m going to talk about your email list…
Now, any good direct marketer knows the value in a list.
The old adage is that direct marketing success is 40% the list or market you go to, 40% the offer, and 20% the creative. Which means that your list is a good 2X as important as your copy in terms of generating direct marketing success.
But here’s where I think a lot of internet marketers have screwed up the “list” lesson before, and still screw up today…
I think, in short, that the value equation used to judge an internet marketer’s list is often simplified — and more often than not, it results in marketers thinking their list is far more valuable than it actually is.
Rewind back to the direct mail days, and to Gary Halbert’s “Starving Crowd” illustration… (It’s worth noting one of the greatest copywriters and direct marketers of all time was OBSESSED with this.)
The lists you could — and can still — rent for direct mail all fall on a spectrum.
On one end of the spectrum is “the phone book.” Every name, every address, yours to mail to…
This is by far the least targeted (and usually least profitable) list you could mail to. Why? Because you don’t know who they are, what they’re interested in, what (or even if) they’ll buy by mail, and so on…
On the opposite end of the spectrum is your house list of customers who’ve bought lots of things from you, including complimentary items to what you’re about to sell them, and including very recent purchases…
These are people who are proven targets for your offer, who know you, who understand your market, who have a habit of buying by mail, and who’ve demonstrated recent behavior buying things very similar to what you’re offering now…
In between are a ton of different targeting criteria and gradations of probability of response…
– Names compiled from the phone book, versus based on demographics…
– Names compiled based on demographics, versus based on psychographics (how they think)…
– Names compiled based on psychographics, versus actual response behavior…
– Zero-cost response behavior (interest surveys, etc.) versus buying behavior…
– Past buying behavior versus recent buying behavior…
– Recent buying behavior versus recent and frequent buying behavior…
– Transaction size…
– Topics covered, offer details, marketing that actually got the customer to convert…
– Lists of other companies’ customers versus your own…
And so on…
There are a million different criteria you can use to judge a mailing list, and the more it “hits” on, the more profitable it will likely to be to mail…
And so if you have a new direct mail piece that works well (or even that you want to test), you start with the highest-probability lists…
These are the people who are MOST LIKELY to respond to your direct mail offer…
If you can’t make the profitability work with these folks, going broader almost definitely won’t work.
What does this all have to do with email lists?
Well, let’s apply the lesson.
In direct mail — where it cost hundreds of dollars per thousand names to market, versus the pennies per thousand of email — they understood the drastically different value of different lists.
There was a far greater discipline required to make sure your direct mail was profitable versus email.
Laziness here — in evaluating list quality — would leave you broke.
This discipline has not carried through to email marketing.
And yet…
Different email lists (or segments of a single email list) have drastically different values…
Because email is so dang cheap, online marketers have seldom segmented their lists. Everybody gets thrown into the master file. And treated largely the same.
When in reality, EVERY SINGLE EMAIL ADDRESS REPRESENTS A UNIQUE RELATIONSHIP.
One person bought product, ABC. Another bought product XYZ. Another, product OPQ. And yet another person bought ABC and OPQ, but not XYZ. Another bought all of them, plus the high-level implementation service on each, and you have their credit card on file for anything you create in the future.
And for every customer like these five, there are 40 more who only signed up to get free info, and don’t pay much attention when you make an offer. And in that 40, there are two that mark every offer-based email you send them as spam, who are diminishing your email reputation with their email service provider.
And yet, you try to to assign a value to your entire email list, as if each email were the same.
Which leads to the biggest sin of all…
Simply looking at how many total email addresses are on a list, and basing the “value” of the list off that.
The most clear distinction here is seen when you compare the revenue per email subscriber figures on small lists versus big ones.
Almost invariably, tiny lists have HUGE revenue per subscriber numbers. At least, once this list owner figures out how to monetize.
Big lists though have SMALL revenue per subscriber numbers. Even the really good marketers. Because the nature of the relationship with a big list is different than the relationship with a small list.
What’s far more important than size of list in determining worth is the relationship with the list.
A list made up exclusively of buyers (one of the most important criteria in selecting direct mail lists to rent) is far more valuable than a bunch of folks who signed up to download a free ebook off your website.
Where this applies…
Of course, this applies in list rental. If you’re renting an email list, or doing a JV deal, or anything similar, you need to look past the number of emails they’ll send the offer to. That’s almost irrelevant. Instead you can ask revenue per subscriber, or some other indicator of the monetary value of the list. Percentage of the email list that’s also paying customers is a good one — anything below 10% on a well established list starts to become a cause for concern.
This can also apply all the way up to how you structure your business. I know some very sharp direct marketers right now who are going for LESS email opt-ins, not more. All the way up to the point of making customers buy a very low-priced entry-level product (sometimes called a “tripwire” or “welcome mat” offer) before adding them to their email list.
It can also apply for internal list management. How you communicate (what you say, how often, and so on) to a regular buyer is very different than how you communicate to a free subscriber. Giving your regular buyers attention and respect in line with their level of relationship will only increase their value. Trying too hard to squeeze value out of a cheapskate freebie-seeker email opt-in can be an exercise in futility.
It’s only a matter of time before the price of email goes up. The current “net neutrality” debate in the US is revealing the writing on the wall. Everyone who provides services on the internet wants to find ways to wring more pennies out of their customers. Email is a sitting duck here.
Whether it’s Gmail who decides to charge to deliver commercial email to their users… Or Uncle Sam who decides to tax email to subsidize the failing USPS… Or someone else altogether…
The cost of delivering emails is unlikely to stay where it’s at for long.
Those who understand the different values of the different segments of their email list — based on the different relationships — will see this as a mere bump in the road.
Those suffering from the delusion of “my email list’s worth is based on its size” will suffer greatly.
Which side do you want to be on?
Yours for bigger breakthroughs,
Roy Furr
Editor, Breakthrough Marketing Secrets
