No matter your industry, the odds are high these days your customers are online. Men, the young, the wealthy, and academics no longer dominate the Internet. But even when you know your potential customers surf the Web and communicate via email, reaching them can be difficult. Often, companies try several different acquisition methods to discover the most effective one or the best combination.
Specpan is one such company. The market research firm, which focuses on the business-to-business (B2B) market, provides manufacturers and retailers with access to members of the “hardlines industry” — panels of general contractors, builders, framers, painters, plumbers, electricians, power tool users, remodelers, landscape architects, gardeners, and others. Specpan researches these individuals and provides insight into their industries.
The Farnsworth Group, Specpan’s parent, has been conducting market research for more than a dozen years. Recently it decided to move online. You can immediately see the advantages of online surveying: Conducting surveys over the Internet is more affordable, and the response rate is much more rapid. But before Specpan could conduct its research online, it needed to find the proper panelists.
That’s where Specpan has tried three different approaches. Each has its benefits and drawbacks and offers us several lessons.
Approach No. 1: The Cold Call
I prefer not to spend time on the first — fortunately short-lived and discontinued — method here, because in my opinion it crossed the border into spamland. Specpan would visit targeted Web sites, look for contact information, and send the individuals a one-time email message asking them if they’d like to join the list.
“We stopped doing this because we weren’t comfortable with it,” says Specpan’s Grant Farnsworth. “We think a lot of companies are using this method, whether they say so or not, but we didn’t like to do it.”
Approach No. 2: List Buying
Things start to get interesting with the second method — list buying. Specpan researched various list services, such as PostMasterDirect (see how one company used this list). The company looked at demographics, pricing, recruitment methods, and other items and invested in one-time mailings to two different lists, which we’ll call List A and List B. (Farnsworth declined to name the list services.)
List A came from a huge database; List B was a bit more tailored. Both list suppliers charge per thousand emails, and Farnsworth found both fairly priced. Each list was $1,000. Specpan got 5,000 email addresses from Company A and 2,500 from Company B.
Results were disappointing. In calculating success, Specpan measures the percentage of recipients who join the panel, not opens or CTR. It also looks at other factors, such as return on investment (ROI). The two lists performed at about 0.8 percent. Farnsworth calculated it would take $150,000 to build a sufficient panel with those join rates. At that rate, it’s unlikely the lists even have enough individuals in Specpan’s target audience.
Approach No. 3: Partnerships
The third method, establishing partnerships, has been the most effective and cost-effective so far. Specpan has been teaming up with publishers and manufacturers. For example, a company that sells upscale custom homes might send out a newsletter once a month. Specpan would place an ad in the newsletter in exchange for providing the company with a certain amount of free research.
The results far outperform list buying on a couple fronts. Through partnerships, approximately 10 percent of recipients joined the Specpan panel. Farnsworth credits this to the partner’s credibility, branding, and the fact partners constantly get new subscribers, among other factors. The mailings typically send directly from the partners. Plus, the cost is much lower, as all Specpan is spending is its time.
Specpan hasn’t given up on lists, however. Last Friday morning the company tried another list from a third company. In the first 72 hours, Specpan saw a join rate of 2 percent, more than twice that of the other lists.
“Here are my theories of why this happened,” Farnsworth said. “[Company C” had more demos on their members than the other two companies. These demos, which are important to Specpan since we are focused on unique professionals, include business type, title, years of experience, firm revenue, even how many homes built per year if the title is builder. By using these demos, we were able to better target those individuals we need, rather than some random accountant or salesperson getting an email asking them to join a remodeler panel.
“Also, [Company C” sends out a confirmation email once an individual opts in,” he continued. “This email clearly explains what they are opting in to and who will be sending the email. This is something I think other companies fail to do.”
Clearly one of the takeaways here is when a recipient knows and trusts the email’s origin, she is more likely to respond. And when a method doesn’t work once, it may still be worth tweaking and trying again.
Of course, these aren’t the only ways to grow a mailing list. If you would like to share your experience in a future column, please email me.
Meet Heidi at ClickZ E-Mail Strategies in New York City on May 19 and 20.
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