Maximum ROI with Third-Party Email Lists
We get this one a lot; you've got a great widget and want more people to know all about it. Problem is your database is not that big and you want to get new people to your site. How do you do it? Many times we recommend using a qualified third-party list that has subscribers that meet the criteria of people who want your widgets. But it's not just as simple as renting a list and firing off a few hundred thousand emails.
Step 1: Define Your Goals
Here's where it all starts, we work with our clients to determine exactly what the goals for the campaign are and write them down. Why do you write them down? So you can measure each of the following steps to the goals. Some of the goals we look at may be data collection, sales, inquiries, sales value, etc.
Notice that I didn't say open rate and click through rate. Yes, they are very important, but they're not your goals. To put it in perspective, if you spend $1,000 on an email list and get just ten people to open the message and one to click through it's a failure right? Wrong, if that one person that clicked through bought a $10,000 widget your ROI is 10:1, pretty good huh.
It's important to have the analytical system behind the message to accurately track conversions as well as the other traditional metrics. You want to be able to come up with an actual ROI to base your decisions. Once we've determined the goals we move on to step 2.
Step 2: Define Your Success
Great, our goal is to increase widget sales; we're heading in the right direction. Now we need to determine how we are going to measure that goal and this is where most people stumble. We're about to start testing a lot of different lists and if we don't come up with a good measuring stick, how will we know how well we did? If our goal is to increase widget sales, we need to define how many we want to sell or what cost per sale we want to achieve. In this example, let's say we want to sell at least one widget for every $10 we spend.
Step 3: Research Lists
All lists are not created equal. So find a bunch that you feel will do a good job and negotiate a sample test. Typically you can send to 50,000 or so through each list and then base the larger purchase on the list that performs the best.
Step 4: Create the Message
Once you've got a few, we'll say five, lists to test we need to develop a compelling email message that is designed around our goal. This means if the goal is to sell widgets, we don't want to use half of the email talking about the company history. Moral of the story is, get in, deliver the message and get out. Every link and bit of copy that does not lead toward the success of your goal, only waters down your chances.
Step 5: Test and Choose a list
Good job, you've got a compelling message, great subject line (you did a subject line, right) and are ready to test. This is where we deploy the tests and see which ones perform. Let's say list #1 had an average cost per sale of $20, list #2 was at $8, list #3 was $13, list #4 came in at $80 and list #5 was $7.
You have a decision, you've got two lists, #2 and #5, that exceeded your sales goals. Do you just choose the one that preformed better? In this case, I would recommend finding some more marketing dollars to hit both lists.
Step 6: Segment & Target
Now we have our lists, our message and are ready to go. Depending on the market you may wish to segment your offering to maximize performance. Do widgets with snowshoes perform better in the northeast? Target that area with a unique version of the message. Perhaps just swapping out the product image to show the winter widget versus the hula widget will do the trick.
Step 7: Send
Now you're ready to send the message. Check with your list provider and see what you need to provide. You're likely to need to send an HTML version, text version, unsubscribe list, suppression list and possibly some signed agreements and disclaimers. Once you've submitted all the materials, the vendor will handle delivery.
Step 8: Report
You will get a report from the email vendors in somewhere between five and 10 days after delivery with message performance. This will typically include open rate, click through rate, delivery rate and a few other stats. These reports are great, but are NOT the ones to watch. I mentioned analytics earlier and the email message should be coded to allow you to track site visitors from the message through your site using your existing analytics system. Based on this you know exactly how many widgets were sold, how many people didn't buy a widget but signed up for a newsletter, etc. Most importantly, you know how you measured up to your goal. Congratulations, the email to both lists in this example resulted in a cost per sale of just $7.35.
In summary, define your goals at the outset of the project before you do anything else. Test multiple lists and creative to ensure the best possible success. And finally track results through your analytics system so that you can determine if you've met your goals. If you want more information about email tactics, contact us.
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