A Download and a Baseball Cap Help Build a List

Last week I presented a case study showing how one company went about growing its mailing list (“Birth of a Mailing List“). To accomplish this goal, the company placed advertisements in the form of text links throughout the Web. Although that’s one way to grow a mailing list spam free, it isn’t the only way. Here’s another option.

YellowFish Software is a business-to-business (B2B), Web-based company specializing in CRM, business process automation, and related solutions. Founded in 1995, the company wanted to grow its email address database of IT professionals.

As it sought a way to do this, YellowFish learned about PostMasterDirect, a service from NetCreations Inc. PostMasterDirect offers email list management and brokerage and deployment services and has a database of more than 13 million B2B double opt-in members. PostMasterDirect members, who are consumers, business people, and other individuals, sign up to receive offers and information on topics they select. For example, they may check off boxes to receive via email information about cooking, credit cards, or high-speed Internet access.

PostMasterDirect can then dynamically segment the database into groups. For example, it can sort the database by age, country, Zip Code, title, industry, gender, income, and other factors.

YellowFish went to PostMasterDirect and bought a one-time list rental. In other words, YellowFish never saw the original addresses — in my opinion, that practice is an important factor in helping to prevent spam. PostMasterDirect has a total of 3.2 million IT professionals in the database to choose from, so YellowFish did a test send to about 3,500 members (OK, 3,474 to be exact).

The marketers chose this relatively low number for several reasons, the primary one, according to Elizabeth Lloyd of NetCreations, being cost. PostMasterDirect’s business model is it charges a per-message fee based on the total number of delivered emails. Though I couldn’t obtain exact figures for the cost of this campaign, I did find out PostMasterDirect costs range between $0.15 and $0.35 per “good” (e.g., no bounce backs, etc.) email address in the B2B category.

YellowFish sent out its first offer in May 2000, which announced a new product called Revelation Helpdesk. The HTML email message asked interested individuals to enter their names, email addresses, phone numbers, and countries. If they did so, they could download a demo of the helpdesk software. They also received a free baseball cap with the YellowFish logo on it.

The result was 7.48 percent of the recipients signed up for the demo and were added to the YellowFish database. Although I’ve been scouring the Web for hard numbers to compare this to — and I haven’t found any — my experience tells me this is quite satisfactory for a one-time list rental. (If you have any statistics to share with me, please do! Send email here.)

Unfortunately, I wasn’t able to obtain unsubscribe figures by press time. I do know YellowFish was happy enough that it used this service again, and here’s where it gets really interesting. In December 2002, the company sent an offer to 10,000 more members, and in January 2003 it emailed 9,000 others. The offer changed somewhat: The product demo was the same, but it was no longer a new product. Plus, the company did not give away free baseball caps.

The response rates this time? Slightly more than 3 percent: 3.22 percent and 3.13 percent, respectively. So, in terms of volume and leads, the total number of responses went up, and the cost per lead was higher since the mailings were sent to more people. But saying the cost per lead was higher doesn’t take into account YellowFish Software was no longer giving away free baseball caps, which surely cost the company something. And I suspect, although there’s no way to prove this, if the free offer were still in place, the response rates would have been higher. Plus, the software was no longer new, so it’s safe to assume a larger percentage of the database was already familiar with Revelation Helpdesk.

As I mentioned earlier, this is just one way to grow a mailing list. If you’ve come up with another solution, I’d like to hear from you.

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