Costs and accounting for email

The decision by Cheetahmail to stop allowing customers to use email append caused a very long discussion on some of the marketing lists.  One of the criticisms had to do with what a dumb “business decision” Cheetah was making.
I disagree. Appending, and other non-permission based sending cause a lot of costs to trickle down on the ESP. Many of the large ESPs have teams of 8 or 10 people working to manage delivery, deal with blocks and keep the mail flowing. In fact, I once had a client say “We want to be as clean as ExactTarget” only to choke when I told them how many people are on the compliance and delivery team at ET.
That’s not even looking at the cost of a SBL listing. One company estimated the cost of a slightly less than 24 hour block at over $1,000,000 in lost opportunity costs and in actual staff costs to deal with the listing. I know of one Fortune 20 company who had to re-engineer their entire customer and prospect databases due to a blocklist. And, yeah, that one was actually due to an append. They did an append and the append not only added a “new” address to a record where the person had previously opted out, but that person worked at a major spam filtering company. They experienced a whole world of very expensive pain.
Many ESPs are actually making a sound business decision by refusing to deal with non-permission mail, whether it be a purchased list or an appended list. The sender does not have permission to send to the addresses. That causes all sorts of delivery problems, which costs the ESPs lots of money and staff time to deal with. Most marketers won’t actually pay for the resources they use when appending or buying lists. Then they blame the ESP when their mail ends up in the bulk folder or is blocked outright.
I don’t think many marketers fully integrate the cost of dealing with a poor list into their decisions. My tweet from earlier today “If you have to “ignore all the costs associated with complaints” to find a positive ROI on opt-out mail, is there really a positive ROI? is a paraphrase of one of the things I heard.
ESPs can’t avoid those costs, they’re stuck with them. Lowering those costs by requiring senders to only send to recipients who have given permission is a smart business decision. Marketers don’t pay those costs, but if they even acknowledged them I suspect that there would be a whole lot less sloppy email marketing.

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Email Change of Address

How many readers have ever submitted an email change of address form? How many readers even know where to go to submit an email change of address form?
And I’m not talking about going to a particular retailer and saying “change my email address” I’m talking about using one of the companies that offer email change of address as a service. Where do they get their names and email addresses? I sure don’t know.
How many readers have actually purchased an email change of address service for one of your mailing lists? Do you know where the addresses came from?
I’m wondering how many people buy email change of address services, but have zero clue how to sign up for them. I mean, I know, you can go to FreshAddress or Experian and get ECOA services. But I don’t know how to tell either of them that I want to be included in their ECOA services.
So how do consumers get to be on a change of address list? And how opt-in is their participation?
One reason I ask is that a number of my clients have stumbled into serious delivery problems recently. Investigation generally points back to the ECOA service they used. So I’m wondering how actively and knowingly consumers are using ECOA services.
 

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Opt-in vs. opt-out

Jeanne has a great post up at ClickZ comparing the performance of mail to an opt-in list to performance of mail to an opt-out list.
The article looks at opens, clicks and click through rates over 7 quarters (Q1 – Q4 2010; Q1 – Q3 2011) covering 330 million emails. I strongly suggest anyone interested go read the whole article.
The short version, though, is that the opt-in lists had more opens and more clicks than the opt-out lists. In some quarters it was double the number of opens and clicks.
This data is a strong indication that opt-in lists perform much better than even the best opt-out lists.

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