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Caveats to Email for SMBs
July 28, 2008

Last week, Richard posted a variety of interesting tidbits list some caveats to the benefits of email. I really liked his analysis, and as he suspected, I have a few things to add.

Richard cited a study from Direct Partners, New York, that indicates that e-mail is now the most popular form of direct response marketing among large U.S. corporations. The finding echoes a study from MarketingSherpa, where participants reported that “house e-mail marketing” delivered the best return-on-investment in terms of direct response.

Does this mean that small and mid-sized businesses should follow their lead? One thing that’s rarely mentioned—although Richard astutely did—is that, unless you are doing a targeted, personalized email campaign, you have to send a lot more emails to get the same response as you do with print. That doesn’t bother large corporations because they have those email addresses already. 

But what if you don’t have a large in-house email list? Have you ever tried to go out and purchase an email list? They are not cheap, and if you are purchasing an undifferentiated list, you’ll have to send out thousands (or tens of thousands) more than you will print to generate the same response.

Email lists also go out of date very quickly. Even if you purchase a reasonably current list, 10% or more of the names will likely be out of date before you use the list. An additional 20% or more could be out of date before you try to use it again (assuming you’ve purchased the list outright). Your pool of available names shrinks very quickly.

In order to run a reasonable email campaign, you’d have to purchase a list in the tens of thousands—at a cost of thousands of dollars—to even generate a handful of responses. Then you have to continue to replenish the list over time. Print direct mail has an average response rate of one half to one percent (a far better return) and the lists tend to cost far less and stay more current over time.

Email has a high ROI only if you already have the in-house list. If you are a small or mid-sized marketer looking at email, this is a huge consideration. If you want to incorporate email into your marketing, start building your in-house list now. If you don’t have a list, email lists probably aren’t the way you want to get started. With print, you can buy a targeted list of 2,000 names (by income, ZIP code, or other basic demographics) for a few hundred dollars.

So don’t get enamored by email statistics too quickly. Large corporate manufacturers can afford to send out 100,000 emails at a time because the list costs them nothing but the internal resources to do it. For small and mid-sized marketers, the sheer volume requirements can outweigh the benefits.

Have questions? Comments? I'd love to hear from you. You can email me at htollvr@aol.com. For more information on primers for marketers and small businesses on digital, 1:1, and Web-to-print technologies, visit www.digitalprintingreports.com.

Posted by Heidi Tolliver Nigro on July 28, 2008 | Comments (0)