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Mailing Inactives Makes No Cents: Cohen
3/6/12
By Ken Magill
As the debate over whether to mail inactive email addresses continues, Jordan Cohen says those who are arguing for treating inactive addresses like live ones are missing one critical point: the money involved.
“I’m not going to touch on the deliverability issue [that may or may not arise from mailing to inactive email addresses] because that’s all over the place,” said the vice president of business development for Pontiflex. “But there are far more important reasons from an old-school direct-marketing perspective for removing, or at least severely reducing the cadence at which you’re sending to inactive names.”
Cohen was responding to arguments made here last week in which Dela Quist, CEO of email marketing agency Alchemy Worx, said, among other things, that there is no ROI in removing inactive names.
“He is imagining a world in which email costs nothing to send,” said Cohen. “This is a myth that we’re all guilty of perpetuating. Any marketer using a good email service provider is spending tens of thousands, hundreds of thousands, even millions per year on email deployment alone.”
Of course email is vastly less expensive to send on a per-piece basis than direct mail, said Cohen.
“But direct mailers aren’t sending mail every single day to 10 million, 15 million or a hundred million people,” he said. “Groupon is sending email to 150 million subscribers daily. It all adds up.”
As a result, Cohen said: “Unless you have an unlimited budget for email marketing and your CEO or CMO have given you carte blanche to spend as much as you want to send to your entire list every single day, [and] unless you are a high-value vertical like travel, entertainment or jewelry, it makes no sense to adopt a mantra of ‘inactive, schminactive,’ or treat them all the same and never remove inactive names.”
[Note: By using the phrase inactive, schminactive, Cohen was referring to last week’s headline, which contained my words, not Quist’s.]
The typical email marketer who has a finite number of sends available to them in a given month must be smart about what they send to whom, said Cohen.
“I’m all for frequency and mailing more, but what [smart marketers] are doing is upping the frequency to the smaller portion of the most engaged names on their list and reducing the frequency to those who aren’t showing signs of life,” he said. “Whether they’re doing it for deliverability purposes is neither here nor there. There doing it because that’s what makes the most money.”
Cohen also said another argument those who are for mailing inactive names have been making—that messages to inactives have branding value—is at best idealistic.
“Email marketing department [executives] are not going to the CMO and saying: ‘Hey, if you give us more money to spend on email deployment to people who aren’t opening and clicking or showing any signs of life, this is a wonderful branding channel,’” he said.
“The CMO and CEO would laugh. They would say: ‘We’re giving you direct-response, ROI-driven marketing dollars for the email channel. If we want to do a branding campaign, we’re going to buy a commercial or a print ad. How can you sit there and say ‘from’ lines and subject lines are on par with the other channels we have at our disposal when it comes to branding campaigns?’
“Email marketers have to report back and say: ‘We spent a dollar for every thousand emails we deployed and we got $50 back,” said Cohen. “They have to come back with that dollars-and-cents number, and when they come back and that number is decreasing, they get in trouble for it.”
Cohen added he doesn’t necessarily advocate removing inactive names. But he does advocate “dramatically reducing the volume you send to inactives and focusing more of your spending and frequency on those names that are actually responding and measurable.”
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Date: 2012-03-11 11:20:50
Subject: Chris: On Branding...
Chris, much appreciate the weigh in and your perspective on all this…
2 responses:
1) The value of "impressions" continues to rapidly decline in the face of "actions," and online and mobile display advertising these days is increasingly being purchased on a CPA basis as opposed to CPM. Marketers want more value for their investment, and publishers want more value from their traffic.
I see this translating neatly into email deployment, except that email marketers are acting as their own publishers! With that being the case, mailers have to figure out how to constantly increase their effective-CPMs, which is at least partially accomplished via effective active vs. inactive cadence segmentation.
2) The email marketing industry would tremendously benefit from more data on the branding value of unopened and unclicked email. But it seems extremely difficult to get to this "ah ha" moment at an aggregate/industry benchmark level, let alone figuring it out on a company by company basis. Don't get me wrong, I'm all for it, but we've got our work cut out for us. Forrester Research, if you're reading this -- for the love of...
Looking fwd to your next article, and to Dela's webinar...
Date: 2012-03-11 10:58:44
Subject: Laura: Agree
Laura, thanks so much for weighing in.
Agree 100% with your comments re: need for thoughtful reactivation (and activation) campaigns. Bottom line is that recipients should be treated differently based on their levels of response.
It's not just about reducing cadence to inactives, it's about recognizing that they're not your most engaged subscribers and doing something about it: First, by figuring out the best ways to make them more productive/nudging them into your "engaged" bucket, and second, by being prudent about your investment in marketing to them as you do so.
Date: 2012-03-11 10:52:53
Subject: Dela: See WSJ/Gamestop
Dela, thanks for leaving a comment…
Looks like while I was away the WSJ published a piece re: retailers rethinking their mailing strategies, including reducing cadence to inactives. What Gamestop is doing is in-line with "what I'm seeing" from the most strategic practitioners of email marketing:
"Videogame retailer Gamestop Corp. has split its customer base into two groups: general and rewards members. Over the last year, it has halved the number of emails it sends to general subscribers who may not be regular shoppers, focusing instead on its rewards program, which tends to include active game players who want frequent updates on consoles, game launches and other information targeted to their purchase history, said Chief Marketing Officer Mike Hogan.
Members of the rewards program typically open more than 30% of the Gamestop emails they get, compared with less than 10% for general subscribers, Mr. Hogan added."
From: http://online.wsj.com/article/SB10001424052970204571404577253102978140364.html
Date: 2012-03-06 15:26:36
Subject: Dela is right!
I've got another column on this subject coming out next week at iMediaconnection in which I make the point that impressions delivered by email campaigns are at a fraction of the cost of any other channel, so why not take advantage of that? Let's face it, in digital marketing the line between brand and direct marketing became hopelessly blurred years ago--about the time we priced display ads based on the traditional CPM model of branding advertising and measured the results using traditional direct metrics. Every message should be designed to make a sale--either immediately, or at the next possible opportunity.
Date: 2012-03-06 14:52:30
Subject: Inactives: Most aren't interested, but some just aren't ready
First to all involved, this is a great discussion!
For both cost and deliverability reasons, marketers should create a strategy for mailing inactives if they don't already have one. I agree that inactives should not be mailed simply because the low cost of the channel.
For B2C, email marketers should take the time to categorize their campaigns/offers and include inactives who have shown past interest in the category, regardless of how long ago. This is a very effective reactivation tactic. Most importantly, marketers should always segment and track inactives separately in each mailing, even if there's no difference in the content.
In B2B, where sales cycles are typically longer and lists are shorter, lead scoring can be used to determine which, if any inactives should continue to be mailed.
Date: 2012-03-06 14:22:52
Subject: Penny wise $ foolish
Jordan I hope you enjoyed your break, but you must have laid out in the sun too long! :-)
You leave me stuck between the desire to laugh out loud and weep in despair.
Of course you should stop mailing if you are unable to generate a return on a channel that costs $1 to reach 1000 people (0.001 cents per person mailed) a number that is as close to zero as you can get.
Most companies I come across can, so I am not sure who you can be thinking of.
You argue that the best strategy is to mail the people who have already bought more and mail the yet to buys less. That makes no sense at all. If you sell a product that gets purchased once a month and have a weekly email program surely you are wasting more money emailing the already bought, than mailing the yet to buys - particularly when you have already paid for the creative.
All I hope is that the people reading this and following the debate are marketers who get the numbers game, because a numbers game is what this is.
Deliverability is the only way anyone can even begin to justify removing inactives – take that argument away and there is no debate left.
I am presenting a very compelling case study on Marketing Profs march 27th noon ET you should tune in.
Dela