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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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