Outsource and prosper

It costs about the same to send a million e-mail messages as it does to send a thousand, but running an e-mail marketing campaign is still an overwhelming project.Simply from a technological perspective, there are enormous, complex databases to manage, reports to generate, tracking to implement, and attempts to granularize the campaign as much as possible, sending differently-worded missives to each tiny subgroup based on its previous responses, desires, and demographics.
Written by Dan Blacharski, Contributor
It costs about the same to send a million e-mail messages as it does to send a thousand, but running an e-mail marketing campaign is still an overwhelming project.

Simply from a technological perspective, there are enormous, complex databases to manage, reports to generate, tracking to implement, and attempts to granularize the campaign as much as possible, sending differently-worded missives to each tiny subgroup based on its previous responses, desires, and demographics. This is why the most successful e-mail marketing campaigns are outsourced and handled by specialists.

The results are astounding. Forrester Research shows that companies that outsource experience a 6 percent purchase rate, compared with a 1.4 percent rate for those that don't. Here are some tips on preparing for outsourcing and what you should consider before you hire a service.

Get your ducks in a row

Before you hire an outsourcer to handle your campaign, you have a few things to consider. A major campaign is likely to generate an onslaught of responses, and you must be prepared to deal with it. Before the campaign even starts, make sure your fulfillment center is equipped to handle the orders and that your back-end infrastructure can cope with the volume of responses. An effective campaign is also likely to drive traffic to your Web site; your server should be up to snuff so it won't buckle under the stress. You may even want to consider caching solutions, such as Akamai, which help decrease the amount of time it takes to download your site to a browser.

Your targets will come from two different sources: your own in-house list and the list provided by your outsourcer. Your in-house list should include as much information as possible. Besides accurate addresses, it should include any demographics you have been able to collect, what these individuals have purchased previously, and how much money they have spent and how often. Another vital piece of information is whether each individual on your list has agreed to receive e-mail. Opt-in lists generate far greater responses than so-called bulk mail lists of unsuspecting, would-be consumers. Such individuals' names and e-mail addresses have been taken from various lists, pulled off the Internet, or purchased wholesale from unscrupulous traffickers.

What goes into the e-mail message is just as important as to whom it gets sent.

Your outsourcer will have professional writers and designers on staff who can help you craft an effective message. Generally, your e-mail marketing message can be presented as either plain text or HTML; the former is fast and simple, but the latter gives your message the appearance of a Web page with graphics and links.

By far the most successful campaigns use HTML-based e-mail. Geoff Ossias from MyPoints.com, a provider of opt-in Internet direct marketing services, says, "When we first started the service, there wasn't an appreciable difference in response rate, but at the time, probably less than 20 percent of people were capable of receiving HTML e-mail. Now the number is more like 75 percent, and there is a difference in response rates." Hans Peter Brøndmo, founder of Post Communications, a Netcentives company, agrees. "We see over two times the response."

An e-mail message, especially a marketing-oriented one, is more than just words. In some cases, the appearance of your e-mail message may be more important than the message itself. "Imagine Victoria's Secret sending out their catalog in plain text," says Brøndmo.

And keep in mind that if you already have a team of HTMLers, one of them can easily put together an HTML newsletter.


After the message has been created and designed, you need to have a solid sense as to where your message is going. Targeting lets you focus your efforts at an incredibly granular level, resulting in a response rate that buyers of banner ads and other advertising media can only dream of.

One way to improve targeting is by offering incentives (bonus points redeemable for discounts, coupons, goods, or services). Consumers are often willing to provide the information you need about them, and the result is that you can send e-mail to a smaller segment of your audience, yet enjoy a much higher success rate. "In its most fundamental form, there's no marginal increase in cost to send out another piece of e-mail," says Ossias. "But there's a cost in terms of your brand. Advertisers are becoming more and more sensitive to that fact, and they're looking for lists that can reach out to a specific demographic. In terms of actual response rate, targeting does have an impact." Ossias claims that targeted e-mail can achieve a response rate of between 5 and 15 percent; a banner bar fetches only between 0.5 and 1 percent.

How much incentive do you need to give people in order to get the information you want and get them to opt in to your mailing list? Sometimes it doesn't take much, and it may be just a few bonus points. Al Noyes, executive vice president of sales and marketing at SmarterKids uses the incentive approach with great success. He reports, "Usually a $5 value for a $50 order seems to work pretty well, provided it's a value they're interested in."

One of the biggest advantages of electronic media is the ability to keep track of who goes where and does what.

An outsourcer should be able to provide you with regular reports that include the following information:

  • click-throughs to site or within e-mail
  • subscriber growth rate
  • information on hard and soft bounces (respectively, how many returns you get, and how efficient your list is)
  • user activity over time (lets you know whom to bump off the list)
  • churn rate (how many subscribers unsubscribe)
Furthermore, this information should be available to you in an easy-to-understand, graphical report, preferably in near real time. "We help companies understand who their customers are by asking the customers questions and by collecting information as they interact with the company and using that information to deliver highly-relevant, individualized e-mail," says Brøndmo.

Another important factor in a successful campaign is one that the customer never sees: back-end integration. Larger, full-service outsourcers can combine your mailing list with other data and applications in order to refine and constantly update your campaign as well as streamline your work flow. For the sake of efficiency, you may, for example, want to integrate your e-mail campaign with your order fulfillment system so that responses may be handled immediately and automatically.

"The database is always synchronized with other sources of data," says Brøndmo. For instance, you may want to synchronize your e-mail list database with your customer support database. The reason: if somebody has a customer service issue and says the product he or she just bought doesn't work, you don't want to send an e-mail the next day offering to sell that person a peripheral to go with it. Brøndmo states, "By synchronizing these different databases, we know there's a pending customer service issue, so no communication goes out until that service issue has been resolved favorably." Ask your outsourcer about the extent of integration it is equipped to handle. If it doesn't do integration itself, it may have relationships with other integrators; if not, it should be willing to work with an integrator you choose.

Your outsourcer can also help you with customer services such as dealing with responses, fielding questions, and even coordinating with your fulfillment center to get your products out the door as quickly as possible. In addition to orders, an e-mail campaign generates queries from potential customers, requests to be taken off your list, complaints, praise, questions about how the product works, and a variety of other responses. Much of these can be handled by the outsourcer.

E-mail is rapidly replacing the banner ad as the electronic marketing method of choice. A highly targeted list and a close relationship with a full-service outsourcer can generate numerous responses quickly. Make sure you and your outsourcer are equipped for the deluge.

These companies can help you with your e-mail marketing campaigns and provide a variety of services:


  • Offers management services for your existing customer list.
  • No new acquisition program available but offers management services and message delivery.
  • Can deliver highly personalized messaging to your client base.
  • Opt-in system
  • Customer acquisition focus
  • Runs as an ASP
  • Offerings include YesConnect, a Web-based platform that provides merchants with direct access to their e-mail marketing systems.
  • Database of more than 14 million opt-in members
  • Online help wizard designed to help merchants assemble and execute an e-mail campaign
  • Delivers highly targeted list and list management services based on information provided by consumers.
  • Rewards customers for providing information with bonus points that can be used to purchase premiums.
  • MyPoints lists are highly targeted, with more than 400 demographic, lifestyle, and psychographic, attitudinal, and behavioral data points.
  • Merchants receive comprehensive reports and access to their targeted database of more than 16 million opt-in members.
24/7 Media
  • No customer acquisition campaign
  • Strong focus on message delivery services
  • Advertising and direct marketing sales services
  • Ad serving
  • Promotions
  • E-mail list management, brokerage, and delivery; data analysis, loyalty marketing, and wireless and convergence solutions
  • Lists more than 25 million opt-in consumers.

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