“We’re not sending email to enough people!” Heard that before? While “quality over quantity” is still the conventional wisdom, top-level management loves the big numbers. Unfortunately there’s no easy (or profitable) way to corner customers into giving up their email addresses. The quality of those addresses matters greatly. Let’s take a look at some metrics from two anonymized retail brands to see how dangerous it can be to prioritize quantity over quality when it comes to email list acquisition.
Different Acquisition Tactics
We’ll take a look at two companies that take different approaches with a similar tool to build their email lists — specifically a lightbox on their homepages. This isn’t the only way these two acquire emails, but the distinction in how they perceive email list quality is clear. One takes in as many email addresses as possible and the other focuses on gathering only high quality ones.
List Quality Results
Think of the times you’ve been prompted to give an email address without understanding how it benefits you. You’re not very likely to give your primary email address. Return Path defines “primary accounts” as those that are read every day and are likely to have zero unread messages in the inbox. Looking at Return Path’s Consumer Network data, you can see a significant difference in the percentage of primary email addresses in each brand’s list.
What you probably end up doing when visiting Xerxes Co.’s website is giving that extra email address you barely use. You know, that [email protected] or [email protected] address you made back in high school. You may still log in there from time to time, but it’s not the one that’s used for important emails. Return Path defines “secondary accounts” as those where only a small percentage of emails are read, and are likely used for promotional mail. “Dead accounts” are those that have likely been ditched and are very rarely logged into. The breakdown for secondary/dead accounts for each brand is below.
Why Does a Primary vs. Secondary Account Matter?
So what’s the point? Well, for both of these brands, 99 percent of their reads came from primary accounts. Let me say that again: 99 percent! Simple math tells us that less than 1 percent of total reads come from secondary and dead accounts. Primary accounts are clearly the ones you want on your list.
Leonidas Inc. has a greater percentage of primary accounts, which yield a higher level of engagement. When looking at the overall success of each email program with regard to inbox placement and read rate, we can see the clear distinction. The focus on high-quality addresses pays off for Leonidas Inc. with a difference of ~15 percent in inbox placement and 24 percent in read rate.
Bigger Email List, Smaller Return
You’re probably thinking that a bigger email list helps alleviate these differences. So let’s run some numbers with the metrics above and see what a campaign to the full list would look like. Let’s assume that Xerxes Co. has a list that’s three times larger than Leonidas Inc.: 3 million vs. 1 million. The graphic below shows how many messages will actually end up being read.
As you can see, starting off with a much bigger database doesn’t necessarily mean you’ll end up with more customers reading your messages. This also doesn’t account for the bounces, blocks, blacklistings and invalid addresses that Xerxes is up against by having such a high percentage of secondary/dead accounts. Xerxes Co. is likely also getting more spam trap hits and spam complaints, hurting its reputation and ability to deploy emails successfully to all providers.
Long story short, the huge database you pride yourself on may be endangering the overall health of your email marketing program. It’s also not making as much money as you might think. If we assign a $0.07 average return value on each email read, Leonidas Inc. would make almost $5,000 more on this one-time campaign than Xerxes Co. ($23,814 vs. $19,126).
Aggressive list acquisition practices in general can be dangerous and deceiving. Primary accounts should be your goal, as they provide a better return. You need to establish a clear benefit for the subscriber. With regard to database size, less can easily be more.
This post originally appeared in Total Retail.