Advantages of Building an E-Mail Marketing List

E-mail marketing: it has quickly become one of the hottest new industries of the past decade, with more people than ever seeing substantial returns on this investment. But if you're new to e-mail marketing, there's usually just one question on your mind... how do I get started?

There are two primary options available to choose from when establishing your e-mail marketing program:

1) Create an in-house, opt-in list of your own, or...

2) Purchase / rent a list from one of the many suppliers that have already taken the initiative of creating a list for your specific industry. In this article we're going to examine the top three advantages of creating your own list vs. purchasing or renting a list.

First and foremost, to create an opt-in list of your own, you have to give something of value to your subscribers - in other words, give them a legitimate reason to share their contact information with you. This can be in the form of a white paper, an e-letter, a document containing helpful tips for your particular industry, or any other offer that really piques the consumer's curiosity. For instance, a consumer opting in to receive information on eating right and maintaining a healthy lifestyle will likely be interested in weight loss offers. The advantage here is that you know that the subscriber has a genuine interest in your company and services, while if you were to purchase / rent a list, you really have no way of knowing how those e-mail addresses were sourced, or if the individuals on the list actually have an interest in your product or service.

Secondly, you must adhere to the CAN-SPAM Act of 2003, which basically states that all e-mail marketers are only allowed to send messages to subscribers who have opted-in to their list. If you're purchasing / renting a list, it's virtually impossible to be 100% certain that the supplier you're using has fully complied here. Most will say they have used best practices to build the lists that they're offering, but taking a chance like that could lead to complaints against your IP address, which means problems with the ESPs (e-mail service providers). Ultimately, this can translate into fewer and fewer of your e-mails actually reaching the consumer's inbox.

Finally, and this point is crucial, when you create your own opt-in list via your website, you have the opportunity to a) require specific information that you simply could not receive when purchasing / renting a list, and b) know exactly where and why someone signed up for your list. The advantages here lead to one key word: Segmentation. When you know details about a subscriber, such as where they visited on your website and what they were interested in, you can tailor an e-mail specifically to those exact interests. This greatly increases the level of personalization by segmenting your list into what you deem to be relevant categories. There have been many studies conducted over the past few years with a focus on this topic, and in every one, the segmented e-mail not only beats the generic e-mail in terms of conversions, it usually does so by a substantial number. Sears introduced a personalization program that also let subscribers choose the kinds of e-mails they wanted to get. The reported results of the move away from batch and blast (based on A/B tests):

"41% increase in revenue per clickthrough, a 178% increase in conversion, a 59% increase in average order volume and a 215% increase in clickthroughs." (Segmentation 1)

In conclusion, while it may seem easier and more convenient (at least in the short-term) to purchase or rent a list from a third-party supplier, that is not always the best course of action. If you're looking to establish the strongest relationship possible with your consumers, while receiving the maximum ROI, then it is highly recommended that you go the extra mile and really take the time to build your own opt-in list.

Reference:

"Does segmentation work? Stats and case studies" E-mail Marketing Reports. 07 Jan. 2009
( http://www.email-marketing-reports.com/iland/2008/10/does-segmentation-work-stats-and-case.html )

Todd Armstrong is an Affiliate Strategist for Clickbooth and an experienced member of the E-mail Division.