ROI Topic: How Businesses Misunderstand Spam

This topic typically refers to US law but needs to be addressed internationally as well. Based on that experience, let us answer this question by differentiating the rule of law from customer perception, ISP/filtering software and blacklist providers, and then the differences internationally.

Can Spam Law

After 11 years, there are still great misunderstandings about the US CAN SPAM law. This law did not make unsolicited emailing illegal contrary to many people who misunderstand it. It actually provides the guidelines required to legally send unsolicited emails. The basics of this include: data sourcing methods cannot use computer generated algorithms and programs to scrape web sites (commonly referred to as crawlers, bots and spiders) or randomly generating email format matches; cannot use deceptive email subject headers (this is highly subjective and basically means you can’t trick people into thinking you have a relationship established to influence them to open the email), but also that the email header should not be a direct advertisement (also highly subjective; email reply must go to an actual email id; must have an automated opt-out that is handled within 72 hours (it has become common to allow a manual unsubscribe based on email recipient reply; the sender of the emails must include a valid physical location; the unsubscribe must be for all the divisions of brands of the sending entity but is specific to the contact requesting unsubscribe. That is the essence of the law.
<> can be selected out randomly for no good reason as a way to show their customer that they are doing their job. Unfortunately there are few if any laws that protect email senders from these malicious and unethical attacks. These preventative companies that are in the business to protect their customers have their own policies that have nothing whatsoever to do with the letter of the law for legal compliancy. They set up their own rules to determine what is allowable in sending emails to their customers. In fact, many of these providers are offshore and as such, not subject to US law anyway and very difficult to communicate with in a rational way.

The email sender’s biggest fear is that their emailing will cause their domain to be blacklisted, which means the web site will go offline temporarily, usually for a few days. But after that, the domain is reinstated, of course only after the consternation, embarrassment and potential harm that is done to your brand. As a result, many email senders today outsource the email sending process to a third party to prevent brand issues, or if it is done in-house, they will typically use a separate landing page that does not impact their main brand and web site. Many customers will not do unsolicited emailing for these very concerns about their brand and have little alternatives to use emails in any way for business development. Please understand that an email sender can completely comply with the letter of the law and one of these blacklist scenarios could still take place, although the likelihood is low.

International

It used to be the case that the US law was the most restrictive for emailing. That is hardly the case now. Perhaps the most restrictive now is the Canadian CASL law, which essentially makes it illegal to send ANY emails, customer or unsolicited, unless you have written record of a permission statement from the customer, dated, and saying it is okay to send them emails. Several years ago one of our principals was onsite with several Canadian customers evaluating and investing the details and options associated with the law. It is indeed extremely difficult to address. That is not to say that the practice of unsolicited emails into Canada has evaporated but rather that it is merely illegal. As a result, telemarketing and direct mail and digital marketing have ramped up significantly.

Besides Canada, Germany and Australia are also particularly tough on email sending. Further, on a country by country basis, some countries have data sourcing laws that require opt-in emails. However, it is near impossible that the data providers will have the ability to identify the opt-in source of every email address, and further, the original opt-in source may be several sources removed and is not likely the data provider themselves and certainly not the customer. So the intent of the law is never met anyway.

All that said, any company who does not use email marketing to solicit new business leads is missing out on a large opportunity as email is still the preferred communication by top executives in every yearly marketing Sherpa study, as well as email marketing is the top ROI mentioned in all surveys. It provides immediate results, lower costs, and a more convenient method of frequent communications at a relatively low cost. That is why to this day, the data services and list acquisition business is still in a high growth mode. Just be sure to select a vendor with quality guarantees, selection, and competitive pricing.

About ROI Outsourcing LLC

ROI is a data services and telemarketing provider with numerous global data sources and offices in the US and India. Collectively ROI has 55 years of experience in marketing, sales, management and business development, 15 years marketing data services, and 12 years previously marketing our own email marketing solution. Please visit our web site at http://www.roioutsourcing.com or call us at 770-597-2654.

ROI Topic: The Importance of Opt-in Data

Perhaps contrary to your expectation, the explanation of this topic will demonstrate that opt-in data is now a non-essential concern for customers and mainly irrelevant in terms of both the rule of law and the impact of an opt-in list.
There are several variations to opt-in that need to be mentioned: opt-in, double opt-in, opt-out, permission and permissible. Sorry for the confusion but the terms are often misunderstood and erroneously used interchangeably in communications by data providers sometimes.
Opt-In Opt-in means that the data was sourced by the express permission of the contact name at some point. However, most data providers are several sources away from the original source, making it irrelevant from an actual permission standpoint. The original source may have been from a tradeshow, event, conference, or web site portal, then gathered and sold and resold and resold to numerous data partners, resellers and brokers to the point where it doesn’t matter anymore. The customer will never remember where they opted in, and the data provider is not the original recipient source of the opt-in anyway, and will not have written, verifiable proof of the original opt-in source, so what is the point? Beyond that, opt-in is not a requirement for the US Can Spam law. That’s right. Let me say that again. Opt-in data is not a requirement for the US Can Spam law. It sounds nice but is not required, and as just explained, has little if any value. Many data providers maybe say that they have opt-in data but few if any actually do.
Double opt-in is rarer and means that a vendor claims they have the original source of the data where the recipient opted-in, and then the vendor also ran their own opt-in and collected permission for emailing. You can imagine that this process drastically reduces the filter selections and quantity of any such database. But even so, once you buy the data, the names on the list are not opted in for your company anyway and may still react just as though you sent them an unsolicited email. Of course this data has a higher cost as well; if you can be convinced their process is actually as just described.
Opt-Out Some data providers pull your list from their master database and run an opt-out campaign prior to delivery to you. This is a good practice but it increases the cost of the data due to labor resources, but again, they are not opted in for your company anyway. It does weed out some of the more emotional recipients perhaps, but ultimately may just drive your cost out without any impact in results for you. In essence, this is no different than unsolicited emailing but more costly. Permission This term typically applies to a customer relationship. If you have permission to use their email, or even if not, customer permission is mainly implied for email use, at least in the United States. The term is often confused with Opt-in but is different because the permission mentioned here is directly between your customer and your company.

Permissible This term can be used synonymously with opt-out. If someone does not opt-out when you email them or what a data provider emails them, it is in essence their implied consent, otherwise they would have opted out. Of course many recipients ignore emails in their inbox anyway and will not know their silence yielded consent to email, so this is really no different than opt-out and really no distinguishable difference from unsolicited emailing.

ROI Topic: Data is a Commodity Now

Until recently, if anyone asked me questions about pricing in the data industry, I would have said that quality was more important. However, over the last 15 years, global databases have distributed throughout the industry to all the major providers such that everyone has virtually the same standard b2b data now. There may be differences when it comes to specialty data such as technology installed base lists, international data and niche data.
Since everyone has the same data, the quality tends to be the same as well. However, most data vendors do not share accurate results to create proper customer expectations. As a result, it is common for customers to complain that they had bad data in the past and have concerns for any data in the future.Almost all data providers now offer quality guarantees. You may often hear 80% or 90% guarantees. But it is not that simple. All key data fields have varying levels of accuracy. When someone says 80% or 90% they usually refer to the email addresses. The is that it may only be 705 to 80% and so when a customer does email campaigns, they may be upset and disappointed with results.

Whether or not the data providers disclose this, here is the reality of industry averages. If they say otherwise they are either being dishonest or simply providing higher levels of replacement records:
  • 80% email deliverability
  • 95% postal fields
  • 75% for SIC/Industry, revenues and employee size
  • 60% for job titles and phone
  • Often times the disappointment in results comes from the last two. If companies are not in the target market you requested, results will degrade. If you cannot reach the correct job titles for those you wish to contact, the results will be less. If anyone disputes this information, they can simply do a quick calculation on a 25 million record global database and determine how many resources and how long it would take to keep phone numbers up to date more than once a year or two. Further, even for the job titles, industry perceived leader in accurate profiles LinkedIn only has 60% accuracy for job titles and verification the person still works at that company. This is a very difficult problem to deal with.
    So what does this mean for a customer, can you not get results? Well, first, it means you need larger lists than you may have been using in the past in order to get similar past results. Secondly, be sure you have scrutinized the data samples for your target market to determine they are suitable. Finally, make sure you do not overpay for your data.This brings me to the main topic of this discussion: pricing. Any major data provider that has a well-known brand name and/or a very large data team and other personnel will charge significantly more for similar data. It is just common sense because they don’t want to be the market price leader and also because they have higher costs to pay for. So what should a customer do?

    Buy from a broker. I never would have said this 5 years ago because the data accuracy and data selection was not the same for most everyone. There were distinct differences. But now that has all changed. Only a data broker with few resources can deliver the best pricing because they buy in volume and take small margins and have much lower costs due to fewer resources.

    The industry averages for per record/per name data are as follows, based on quantity and type of list criteria:
  • Standard b2b data - $1 to $ .10 (quantities under 2k to 100k)
  • Maybe to $ .05 range for millions
  • Technology install base data - $2-3 to $ .25 (quantities under 2k to 50k)
  • Maybe to $.20 in larger quantities
  • Minimum order policies - $500 to $5,500 (regardless of quantity and type of list
  • So, if you order through a broker who provides similar guarantees as listed above, you can save 50% or more of the cost of your data. That allows you to buy more data to impact the results you hope for in spite of lower accuracy rates than you hope for. Yes, what this means is that data is now a commodity.

    So that means the criteria for purchasing data has shifted. As I see it, the following are the most important criteria:
  • Pricing
  • Relationship with the vendor
  • Realistic quality guarantees
  • Selection and target market validation
  • About ROI Outsourcing LLC

    ROI is a data services and telemarketing provider with numerous global data sources and offices in the US and India. Collectively ROI has 55 years of experience in marketing, sales, management and business development, 15 years marketing data services, and 12 years previously marketing our own email marketing solution. Please visit our web site at http://www.roioutsourcing.com or call us at 770-597-2654.

    ROI Topic: The Real World of Data Accuracy

    We receive requests weekly from customers who say they have been burnt by having bad data in the past. This has been going on for years. Much of this issue has to do with expectations. This article will explain the reality of data accuracy.
    Expectations
    Unfortunately, over the years, the data industry was inundated but thousands of regional, local, and mom and pop data resellers who were often not particularly ethical in their sales and marketing approaches. Either they sold data that had not been recently updated and therefore caused poor results when used for marketing, or they failed to disclose the real world expectations for accuracy and results. So let’s try to rectify the situation now.
    A data list or even data record does not have an overall accuracy rate. It is field by field. Think about a data record typically including 12-15 data fields for postal address, company info, contact info, web site, phone, fax, SIC/industries, revenue and employee size, and sometimes a LinkedIn profile. The typical customer may expect that data will be highly accurate. But that is not necessarily the case. Unfortunately, many data providers are more interested in making a one-time sale than the establishment of a long-term relationship with repeat data orders. One and done has too often been the norm in recent years.
    Data results will vary based upon many factors, including: the email tool or service used to send emails; the skill and experience of the message creation, value proposition, call to action and landing page if used; the ISP policies for volume and other aspects; the recipient email server filtering software or spam software provider used; market need and timing. In addition, for the data part, results also vary based on: the correct capture of target market records; the affirmation of non-niche SIC subsets for the data or if needed, done correctly; availability of primary SICs for your target market (relates to the previous concern mentioned); whether or not the contact person is still employed at the company in the record; the accuracy of the email addresses; the accuracy of the contact job titles; the accuracy of the company phone number; and how recently the data was updated. So I think you can see there is a large potential for data error and not all of it has to do with the accuracy of the email id. Often times the reason the email ids can be verified just prior to delivery and still end up with 20% bounces or even more is that the email recipient servers send false undeliverables. In other words, they send back saying it is a user unknown address when actually it is valid. That is done purposefully to influence you to remove their address from future sending. Our experience in email marketing over a decade is that about 40% of bounces are for this reason. In addition, ISP’s may have rules that prevent the emails from even being delivered, let alone have the chance to bounce back. Indeed, the challenges in email marketing are great but it is still the #1 ROI rated digital service.
    Data Accuracy
    Below are the industry averages for key data fields. You should require that your vendor guarantees these. If they provide higher guarantees, they merely provide more replacements because this is reality. If anyone says they have permission data, opt-in and double opt-in data at a higher cost because it gets better results and helps in protecting your brand, I would be extremely skeptical of those claims. (Please note another ROI Whitepaper topic called “The Importance of Opt-in Data.
  • 80% on email id (I’ve seen a verified email list result in only 60-70% deliverables many times)
  • 95% on postal fields
  • 60% on phone and job titles (a 25 million record global database cannot be frequently updated for phone numbers/LinkedIn profiles are only 60% accurate
  • 75% on SICs/Industries, revenue and employee size (most companies are listed under one or more primaries and several secondary; some companies are very hard to identify within an SIC; revenue and employee sizes can change quickly and are done through customer surveys which are not always completely accurately)
  • There you have it. These are realistic expectations and why. In the end, because of these issues and because all major data sources have essentially the same data and accuracy, our recommendation is to focus on price, relationship with the provider, and quality guarantees for the key fields above.

    About ROI Outsourcing LLC

    ROI is a data services and telemarketing provider with numerous global data sources and offices in the US and India. Collectively ROI has 55 years of experience in marketing, sales, management and business development, 15 years marketing data services, and 12 years previously marketing our own email marketing solution. Please visit our web site at http://www.roioutsourcing.com or call us at 770-597-2654.

    ROI Topic: Technology Data – The Highest ROI

    Everyone is looking for the magic bullet to increase ROI. The pressure from CEO’s and CMO’s is immense and ever increasing. If you want the highest digital ROI, that means emailing. If you want the type of list that generates the best ROI from emailing, that is a technology installed base list.
    Technology Lists
    A technology list is a list of companies and contacts that use certain types of software and hardware technology. For example, companies who have VMWare installed, or SAP, or sf.com or any number of about 4000 technologies available, installed at 1.5 million companies. That is what any major data provider should have available for you. You can filter by the usual parameters of geography, job titles, SICs/Industries and revenue or employees. In about 30-40% of cases, it may be possible to identify specific software versions or model numbers or even product names.
    So if you know that a company who has a certain technology installed is a higher qualified target for replacement with your product/service, or perhaps complementary to your product/service, this type of list generates the best ROI currently. Or perhaps you provide IT services of some type and wish to contact companies that use Cloud Services or Cloud applications. It is possible to even identify multiple technologies in the same company.

    Technology Guarantees/Pricing

    You should also expect that the data provider offers a 100% guarantee that the companies have that particular technology installed that you request. Otherwise they provide replacements. If you are a company who has superior features or value proposition than your competitors, this type of list can be very good for your marketing results and the sales team will love you because cold calling to find competitor’s installations is very unproductive and no one does it consistently.
    As far as pricing goes, technology data is more expensive than normal b2b data. If you go to a top data brand that has a lot of resources, expect to pay up to $3 per contact in low quantities. This may not be a problem if you plan to telemarket them but if you plan to email them you really need a couple thousand or much more if possible. In larger quantities you might get the price down to $ .25 per record. At ROI, we provide $ .60 per record in small quantities and as low as $ .12 for 100,000 records.
    Think through the strategy to utilize this type of list. In many cases, it might be a straightforward replacement strategy. But if you get creative, you might discover through simple customer surveys that wherever your product is installed, they tend to also have Marketo and sf.com for example. So there may be some set of circumstances or sophistication that leads companies to use those products and also have a similar need or interest in yours. So if you market to a list of Marketo and sf.com installations, it should increase the probability of your own sales opportunities.

    About ROI Outsourcing LLC

    ROI is a data services and telemarketing provider with numerous global data sources and offices in the US and India. Collectively ROI has 55 years of experience in marketing, sales, management and business development, 15 years marketing data services, and 12 years previously marketing our own email marketing solution. Please visit our web site at http://www.roioutsourcing.com or call us at 770-597-2654.

    ROI Topic: Best Practices for Prospect Emailing

    The vast majority of emailing that occurs today is not prospect emailing, but rather customer-based emailing. In other words, permission emailing. As a result, any statistics you see about emailing are vastly based on permission emailing. This leads to false expectations in that you may expect the higher open and click rates attained in customer email campaigns.

    Reality

    Yet everyone wants to find a way to do prospect emailing because you want to expand your market of course. Although results vary, after 12 years managing our own email marketing company focused on prospecting, and working with numerous other products and services in the market, here is what a realistic expectation is for prospect emailing today:
  • 2-5% opens
  • .25% -1% clicks (of the emails sent) – or 2-4% of the opens.
  • That may sound low, and it is. But it is what it is. Certainly good practices in creating and sending emails, a good email tool or provider, a reasonable ISP, a good list, market timing and need, good messaging and a good value proposition and call to action can enhance results. But manage your expectations accordingly. It has been our experience that customer expect much better than this because they have executed customer-based campaigns and permission campaigns extensively in the past, or an in-house list of prospects who know you. As a result, many customers become unhappy with the average results posted above and enter into an ongoing testing process with different tools and providers, continually trying to find the magic bullet. But it does not exist.

    Best Practices for Results

    First, I would recommend outsourcing to an experienced provider who does prospecting emailing regularly and have their own tool. If you have a tool you have licensed and a skilled resource or team to manage this in-house that’s fine too.
    After decades of market research and personal experience, the foundational rules of marketing success: frequency and reach, still apply. If you play to run email campaigns, the bare minimum to yield measurable results is 4-6 campaigns. Most people, probably you yourself, delete or ignore 95% of emails that come into their inbox. But marketing is still successful because it only takes 5% over time who are interested to become potential prospects and customers.
    Also, after decades of marketing analytics, it is still the case that it takes about 7 touches per contact per year to create and maintain awareness. Further, across all industries, it takes 8-15 touches for those who eventually become interested and take some type of action.
    Ongoing emailing is the best way to maximize results. Monthly or bi-weekly will create and maintain the best awareness. But after a year, your email list will degrade by 30-40% so you need a good source to constantly keep your list updated during the year or your campaign results will similarly degrade. In order to run effective ongoing email campaigns, ideally you need a list of 20k to 50k records and perhaps more if possible. But you should not send out all at once. Outlook typically allows 10k per day and whether you use Outlook or a tool, I would say 10k emails sent per day would be the maximum to send. Of course you can’t send to the same people every day so you or your provider needs to create a rotating schedule.
    A variation of this email sending practice is to send an initial email out early in the week, then a simple followup email later that week asking if the recipient saw your first email. This often provokes more responses because it looks real and personal and honestly due to a little bit of guilt and courtesy on the part of the recipient who doesn’t want anyone to think they are non-responsive.

    ROI

    So let’s take a look at an example of who to calculate and measure ROI. You really must do it initially based on the opens and clicks as a function of the number of names in your list and sending frequency.
    Let’s say you have a 50,000 name list and send twice a month, the open rate is 2% and the click rate is .25% of the opens. Then let’s say of the clicks, 30% go into your pipeline and 20% of those become customers, and your average sale is $5,000. Here’s what that looks like;
  • 50,000 x 26 sends per yr = 1.3 million emails sent
  • 2% opens = 26,000
  • .25% clicks from opens = 65
  • 30% into pipeline = 19.5
  • 20% close = 3.9
  • Revenue = $19,500
  • From a cost standpoint, let’s say the list (purchased from a top broker) costs $3,000, the emailing service (outsourced to an experienced provider) costs $5,000, for a total cost of $8,000.
    ROIis calculated by (revenue-cost)/ cost and yields 144%. Perhaps you are now disappointed. But you should not be, because the purpose of ROI is not necessarily to find a huge ROI marketing tactic (because it does not exist) but rather to produce consistent results that create a positive ROI, which this does. But I purposely used conservative figures to lower expectations. If you have a good value proposition, competitive pricing, a market need, find a good list and email service provider, and perhaps have a higher average sale, your results will be even better. What is not calculated into this equation is recurring or repeat revenues. Without complicating the issue, let me just say that if you can attain recurring or repeat revenues, the simple example above will result in double to triple the ROI% calculated above. This brings to the forefront the value of customer satisfaction, still overlooked after all these decades, as a key measurement of sales performance. It is a well-publicized fact, and still valid, that it is 3-5 times more difficult and costly to attain a new customer than to sell something additional to a current customer. Don’t be looking for the silver bullet and think you will find an ROI marketing tactic that delivers 500% to 1000% or even more, not counting repeat and recurring revenue. You will be disappointed. Marketing is hard work. But it is worth it unless you think your sales team is willing to do all their prospecting through cold calling. Good luck with that.

    About ROI Outsourcing LLC

    ROI is a data services and telemarketing provider with numerous global data sources and offices in the US and India. Collectively ROI has 55 years of experience in marketing, sales, management and business development, 15 years marketing data services, and 12 years previously marketing our own email marketing solution. Please visit our web site at http://www.roioutsourcing.com or call us at 770-597-2654.

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