Once you are maximising your own customer and prospect data (gathered from your website) then the next step is to look at how to utilise other data to get the full benefit from your email marketing strategy. In order to do this effectively you need to make sure you:
- Are clear on the target audience; who do you want to receive your email. Look at the profile of your existing client base in relation to what you are promoting in order to ascertain this
- Have a clear communication strategy. Are you just promoting your product or service on emails; will the same message be reflected in other marketing mediums; or will the email be followed up by a phone call? In most cases the marketing message you send to your new prospects needs to be different to the one you send to your own customers.
- Be clear on what you are monitoring. Don’t make the mistake of just looking at the number of people who open or click on the email – the monitoring needs to be related to your key business aims. E.g. people who purchase something or are active on the areas of the website where you need them to be active.
- Always follow the DMA best practice guidelines (www.dma.org.uk/bpg) and be fully aware of where the data you are using has come from, how it has been collected and that the data owners’ privacy policies and data collection statements are clear and legal.
Two of the most effective ways of expanding email marketing from simply using your own data to using 3rd party data are List Rental and Data Capture are:
- List rental – where you send a one off mailing (or if agreed a series of emails) to a selection of people who have given permission on another company’s website to receive emails from selected 3rd parties. This is typically priced at a cost per thousand (CPM)
- 3rd party Data Acquisition – where individuals give their details and sign up to become a member of your company’s mailings on a 3rd party’s website or through an off line medium. This is normally priced at a cost per record where the price will vary depending on the amount of information you require, what the user is signing up for and what criteria of people you want to make the offer to.
Which one to
use?
There are several factors which will determine which option will work
best for your company. Including
+ What your key business aims are
+ The type of product or service you are selling
+ How regularly you intend to communicate with your prospects/customers.
+ How quickly you need any marketing activity to pay for itself.
As long as the data you use is of the same quality, a small test for 3rd
party list rental will quickly give you an accurate indication of your basic
cost per sale (remember to also take into account the additional longer term
benefits of brand awareness and increased impacts on other advertising mediums).
Data acquisition has a higher upfront cost but the returns continue over
a longer period of time as you can communicate with the individual on more than
one occasion. If you continue to make the marketing message effective and the volume
and timing of the email sends appropriate, then you will continue to see a more
intense return on investment over a longer period of time.
This can be proved by looking at an example of a (theoretical) company who pay £80 per
thousand for list rental and £1 per record for data acquisition. Their weekly email to the data acquisition customers produces open
rates of 30%, bounce rate of 1% and a conversation rate of 2%.
Cost per sale from list rental is static at £40 per thousand whereas cost per sale from data acquisition starts above £100. However, over time this will decrease. By week 14 it has decreased to £61, and by week 25 it matches list rental at £40
per thousand. By the end of the year the cost per sale in this example has dropped to below
£20.
This hypothetical example shows that data acquisition incurs a higher
upfront cost which takes a longer time to pay for itself, however over a longer
period of time the value is greater.
This means that some companies, particularly those which need a quick
return on investment or where the product or service will be either relevant to
an individual or not (and this will not change over time,) will be better off
using list rental. When using list rental make sure that the landing page you
are sending the recipient to has a clear option to sign up to receive more
information from you even if they don’t want what you have to offer right now.
For other companies where the return does not need to be so immediate
and customers are more likely to buy into the product or service once a
relationship is built up, data acquisition is going to be more effective.
In many cases both methods will work for a company if the targeting and
creative are correct. The best thing to do when getting started is to run small
tests of both list rental and data acquisition, and continually monitor the
return on investment by looking at both the source and type of data. This will
help to not only determine which method works best for you but will also help
to continually improve the campaigns thus maximising revenue and profit.
Sara Watts
Managing Director Data Division
Data Media and Research Ltd www.dmri.co.uk
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