• by Tim Judson , April 26, 2007

To grow your subscriber list, take the high road

Senior marketing executives have caught e-mail fever. Marketing managers proved the value of e-mail by demonstrating its effectiveness as a marketing tool enough to justify increased budgets. And the non-marketing executives are buying into the ROI of using the e-mail channel. Score one for marketers.

Now the pressure is on to grow the channel. “Get more e-mail subscribers” is a cry heard through the industry. But at what cost?

E-mail marketers have already picked much of the low-hanging fruit. The most dedicated customers are typically the first, and most eager, consumers to sign up for e-mail promotions. Most of these early adopters already receive your e-mail campaigns, so they clearly can’t be added to your subscriber database.

Many easy e-mail tactics, ranging from point-of-sale tear sheets, to home-page sign-up, to integration with online ordering systems, have been implemented as well. These strategies have likely yielded good results, and increased e-mail databases.

Now, under pressure to grow e-mail lists, marketers are turning to some worrisome trends, considering acquisition tactics they would have shied away from in the past. Some of the approaches used to keep databases full — while not illegal — lean toward the dark side of e-mail marketing.

E-mail appending is one such strategy. Appending, or finding customers’ e-mail addresses from third parties and adding them to consumers’ records, can yield a large number of addresses at an attractive price. But when this method is used on a large scale, performance can be very disappointing.

Instead, consider using appends to acquire addresses of potential subscribers who have much in common with high-performance subscribers. For example, if members of your loyalty program respond well to e-mail, use appending to target the acquisition of loyalty members unavailable by other means.

Another common, but potentially dangerous, strategy involves sweepstakes. An attractive sweepstakes offer can lure large numbers of subscribers. But these people have consistently proven to be poor e-mail performers. While sweepstakes can raise awareness and generate interest in a new product, they’re not an effective way to initiate an e-mail relationship.

E-mail marketers also acquire new names via rental lists. Results, though, are typically poor when this tactic is used on a large scale. Instead, rented lists should be used to target an audience that would otherwise be hard to reach. For example, for a geographically targeted offer, a rented list might be useful.

Each of these strategies may have a place in a company’s e-mail address acquisition program. But marketers must expand the analysis of tactics to include measurements beyond cost-per-acquisition and see the long-term impact that their tactics could have.

When developing an acquisition plan, marketers must look beyond how many addresses a tactic will yield to a more significant issue: how they will perform. Not all e-mail subscribers are created equal. Some will respond to an offer of an e-mail relationship better than others. And often, how the relationship is initiated has a large effect on performance.

Instead of risking a relationship with consumers for a short-term gain, marketers should consider other tactics. One possibility is to assign codes for each acquisition source, then track performance for each. Start with e-mail engagement metrics and follow through to other key metrics that are appropriate for your business, such as incremental revenue, ROI per subscriber, or customer lifetime value.

With this information, marketers can design an acquisition program that balances the demand for list growth with the need to improve program performance. The result will be an acquisition program that yields a high-performance database. Ultimately, marketers can shift executive management’s focus away from getting more names and toward other, more valuable performance metrics. 

Tim Judson is managing director of Merkle/Quris, the e-mail division of database marketing agency Merkle. (TJudson@merklequris.com)