Toiling in the Email Desert

Email marketers must have strong intestinal fortitude. It can be a dreary existence, in which the best-laid plans are doomed to be ravaged by a natural foe. Hard work is forever chipped away by the natural progression of everyday lives, as people move, marry, change jobs, have children, and die. The immortal Percy Bysshe Shelley’s writing of another fallen empire in the sand comes to mind: Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away.
–“Ozymandius,” 1817

I’m writing, of course, about that natural foe of all database marketers: churn. Churn is especially painful among email marketers, because a valid email address is notoriously short-lived. It typically will be useless in six months, due to any one of the factors listed above, plus many more. The difference between traditional offline database marketers and email marketers is that though the former have built their assets in relatively strong bedrock, the latter are forced to build their empires in shifting desert sands. Over the past handful of years, the once-large group of email marketers has shrunk down to a few remaining players. It’s worthwhile to take a look at how the successes have managed to survive.

One of the larger independent email marketers is a large lottery and sweepstakes company (whose name we will not reveal due to competitive concerns). Insiders there report that this successful marketer has grown its list to upwards of 20 million consumers. These consumers have opted to receive weekly and even daily emails from the marketer. If we assume that the marketer, which began operations three years ago, has been growing its list of email addresses in a straight line, this means that the company is currently adding more than 1 million new consumers to its database every month!

What’s more interesting is the number of active participants in the lists. Of the 20 million total recipients, a constant core of about 1 million participants remains active. The size of this core has remained relatively stable. Said another way, this marketer must maintain the dramatic and increasing growth rate of its total database of email addresses to maintain its core of 1 million active participants. Churn in this list of core participants must be made up by new growth in the aggregate list. Next month, the marketer will need to add another million new recruits to make up for the 50,000 people who drop from its core group during a single month.

Leaders in email marketing have found that true permission from consumers is not only more ethical but also more profitable. Firms such as NetCreations, which claims to market to 30 million consumers, have taken a stand on this issue, using a double opt-in process. Consumers who request information must actively repeat the request to join the list. The result is a list with less churn, as consumers are more likely to stay with these programs if they want to receive the information in the first place.

Even higher on the permission scale are sites such as Yahoo Sports, which runs fantasy sports leagues free for dedicated sports fans. These people welcome its emails — and open them.

Most observers believe that the next step in email marketing will be the appending of offline data and the compiling of email addresses with physical addresses. While every effort to do this in the past has proven ephemeral, it will happen, and the leaders in offline database services will lead this progression. But before they do, and before any Web-based marketers start adding offline data to their email address records, they will have to confront the permission problem head-on. Otherwise, they’ll be spending money to append offline data to a vanishing asset — sort of like building empires in the sand.