I wrote this piece before the recent flood of articles on email acquisition hit the media. I shelved it for a while, but as I'm currently interviewing companies that specialize in this space, I felt a foundational opinion was due.
Email acquisition is called many things in today's world. Terms you may have heard include behavioral targeted email, performance email, and lead generation. Whatever you call it, the nature of the effort is to develop a relationship with a customer or prospect by engaging them primarily through a focused email from a list partner or other source outside of your company's control. There are many ways of going about it -- you can rent a list, buy space in a sponsored third-party newsletter, or buy text or ad space in a sponsored email -- but something is obviously working, because this space is growing like crazy.
In my opinion, any issues with email as an acquisition vehicle stem from the previous widespread misuse of lists, bad tactics by affiliate networks, and the "anything to get a sale" model that produced lots of leads and few customers of long-term value. Those close to the space (which I'll get into in more detail next week) tend to think it is simply a lack of education as to how it's done. If you take an online media mindset, everything is a "test, learn, and optimize" process. In email acquisition it tends to be "test, and then go hide because the results didn't match your house list's performance."
I remember the days when anyone would accept a $25 cost-per-acquisition (CPA) deal for a completed credit card application, and the affiliate networks would go nuts with the offer if it came from a major brand. You had little visibility into how and when your ad or creative was presented -- you only knew the number of conversions. Well, that is still the case, but with a major exception: there is much more responsibility into how the lists are managed, and deliverability reputation is critical.
In my experience, there are some industries that seem to be no-brainer choices for this model, such as financial services. However, many industries struggle, for several reasons. Here are three:
· The conversion path is not clearly defined. Industries that don't have multichannel support for a sale will struggle to see the amortized value of a lead and how much it costs to nurture the lead over time. This view of investment gives a clearer picture of the acquisition costs. Today, all you hear about in email is designing good welcome messaging strategies and good approaches to sequenced messaging. To be good at this, you must have a proven path to conversion. Without support it will fail miserably.
· Poor public relations. I like the new phrase of lead generation rather than email acquisition. The latter does not convey the right meaning to everyone. We think of acquiring a new customer through a new relationship derived from a list or partner source that has no relationship with you. Is that realistic? It's like asking someone out on a date without even asking their name. In some cases it might work, maybe, but the reality is, relationship building takes effort. That is why lead generation is a better term. It's about establishing a reason to continue the discussion with a prospect and how to engage and get their permission. So, PR is critical in changing the paradigm of email acquisition.
· Lack of brand control. This is a big issue with many who try affiliate networks. You will have virtually no visibility into where and when your offers are being presented until after the fact. If you are comfortable with this, this model will work well, as it is typically performance-driven. If you have any insecurities about this at all, you'll struggle with acquisition through the email channel. Renting lists requires you to be exact in how you select lists, and in creative review, seed testing and rendering views. On top of this, the handling of campaigns can take an awfully long time.
The key is to support any of these programs with a solid messaging strategy and program continuity and adjusting your view. It may be about a subscription, a qualification, cultivation and then conversion. Since we all seem to want new terms for the space, here is one I use to discuss how to optimize people on a ready-to-buy scale: "buying scale optimization."
The main question you'll have to contend with regarding this subject is not whether you should consider it or test it, but how much you are willing to invest and how much heat you are willing to take internally to educate others on this, when the opinion and consumer experience is so low.
Next week's column will feature interviews with several acquisition companies and their insider views of what works, the trends, and general education.