In converting sales to leads, the math is simple: X amount of dollars is spent for Y number of customers. But because there are numerous leads that are not converted, a large percentage of the X dollars is statistically wasted. Increasing the value of Y will make the equation much more valuable. The way to do this is to apply correct data collection methods to generate additional revenue streams. When applied toward the initial lead-generation expense, value is increased and marketing becomes zero cost of acquisition. Email list management is an ideal tool to create this formula.
How it works
The price of generating leads is a huge gamble for businesses that need an ongoing stream of new prospects to convert into sales-- that is, most businesses! For example, a business that sells toothpaste may pay an agency, affiliate or any online marketer $5 for every lead they deliver that was interested in the toothpaste product. If 10,000 leads are collected in one month, which is great, it costs $50,000. But, if of those leads even 50 percent are converted into a sale with an $8 profit that generated total profits of $40,000 before figuring in the cost per lead, the business is now out $10,000.
This happens to marketers more often than they would like to admit.
The internet marketer's solution is list management. By adhering to best practices in data collection methods, marketers can turn those 5,000 non-converting leads -- and even the ones that did convert -- into extra revenue by sending them third-party offers, reducing marketing costs to zero or adding an additional revenue stream. The names are there already. It is perfect logic to utilize the leads already generated with new information.
Why doesn't everyone do this? Simple: It is a massive undertaking to manage and successfully deliver high volume email campaigns in an ethical manner. Anyone who has tried to send more than 50 messages at one time to an in-house list can attest to that.
How it succeeds
High volume mailers must consider two paramount issues: controlling delivery and controlling conversions.
In order to deliver successfully, marketers must be assured the emails will be whitelisted across all ISPs being delivered to. Without whitelisting, chances are the message will be undeliverable or identified as junk mail and thus unlikely to be seen by its intended recipient. These are serious obstacles for emailers. Overcoming these barriers requires successful branding of the emails and their sender-- that means no hiding behind false names or flipping IPs. Marketers must also adhere to the highest standards in data collection and list hygiene methods; constantly monitoring results such as bounces and reacting immediately to complaints.
Conversion rates follow no rules, and the variations are great from industry to industry. The key, however, is that the list must be tested with several types of creative input and offerings to learn the right fit. In the example of the toothpaste, the leads may not have been interested in a payday advance, but they probably would love a tooth whitening cream. Aside from these obvious assumptions, the campaign should be tested to find out more. Marketers are frequently surprised to find that the list also reacts positively to education offers or other options and offers that may not be immediately apparent.
Ultimately, the marketer has control over what happens to the list. He may choose the types of offers promoted on the lists, select what to omit and decide on the frequency of distribution. The list, though, remains the domain of the marketer.
How it continues
List management existed far before the worldwide web, but the advent of the internet has made list management more affordable and accessible. Evolution of industries and technology, development of new standards and ongoing changes in usage will allow it to thrive. Indeed, list management will continue to be a lucrative and profitable business model. This is an excellent means for marketers to monetize their data and to maximize benefits of the cost of the initial acquisition of that data.
Danielle Hickey is the campaign manager for Global Resource Systems, a leader in interactive marketing solutions. She oversees a team responsible for all client campaigns, creative development, testing, deployment and analysis of all email marketing campaigns.
