Why Permission? pt.2 Beyond Open Rates

Last month I wrote a post on how permission is an effective strategy in email marketing. I noted that IMT Strategies (2001) found seventy-six percent of consumers

would delete unsolicited email without opening it, versus only 2% if permission was given, while Forrester
found that 40% of people said they opened commercial emails because
they recognized the sender as a company they signed up with. I also noted a paper by ET saying that:

• 56% consider a message from a known sender spam if it isn’t interesting
• 50% consider messages from known senders that are sent too frequently to be spam
• 48% are using “report spam” buttons for reasons other than to report unsolicited email

In this post I’m going to go over why permission once again, but this time working beyond open rates, to explain why permission is good for your campaign overall.

So you’ve got a campaign mailing 1,000,000 addresses that you bought from some guy in that dark alley of the interweb under the tubes on the wrong side of the TLD’s. A shady character with a dark trench coat signature with a name like Tr0b3l0r or S4RS or EmailListProvider.com. If you’re in the US or Europe you can get fined for using this, but you don’t care—maybe because your headquarters is legally located in the Caymans. Or Canada.

You send out a carefully set up campaign introduction email to all of these people and 30% of them  soft bounce, 20% hard bounce, and 40% of them don’t open, but hey 10% is still 100,000 more people reading your offer, and that ain’t bad, right? Well, it can be.

The Report as Spam button: fear it

The report-as-spam button is a problematic thing. Not because it lets people automatically trash your email but because when people start hitting that button affects everyone receiving your mail.

Google (including Postini), Yahoo, Microsoft, most ISP’s etc. all use data from “report as spam” (or “junk” or what have you) clicks to determine the general “spaminess” of a sending address and often their IP address. As your “spam level” (that aint a technical term, I just made it up) increases so too does the chance that emails from that address/IP are going to get “auto-stamped” with a spam label. Eventually you likely won’t even make it into the spam folder, you won’t make it into their in-box at all.

If you want to get really scared though, read Spam Complainers Survey by Q Interactive and Marketing Sherpa. 20% of respondents to this survey said that they clicked “report as spam” if they received too much promotional mail in general, 25% if they received too much from a single sender, and 41% if the email was not of interest to them.

In fact, 43% of respondents would simply
use the “report spam” instead of an actual  unsubscribe.

IMT Strategies in 2001 found that 76% of openers would open unsolicited email while “somewhat annoyed” by it. Many of these people may simply see your email, think “I don’t remember signing up for this.” *report-as-spam*. Then you don’t just have a junk send that’s costing you money, you have a black mark against you.

Here is Google comically explaining how they deal with spam:

Addendum: Its worth noting that report-as-spam is a “noisy” signal. It’s not like every press of the button is going to directly penalize you. Each email provider likely has their own way of calculating how report-as-spam works into a spam stamp (though there is lots of suggestion that they share these lists, as well as shared blacklists), and given how much over use of the button there is, they likely don’t count each click heavily at all, instead looking at them as components in an overall system of spam identification.

That said, our Postini account has started flagging emails from even the most experienced email marketers and marketing companies, and we never report-as-spam. Obviously the data being pooled by all users is affecting whether these emails reach us.

Hard Bounces: signs of trouble

If you’re getting a lot of hard bounces then you need to clean your list. Lots of hard bounces are a sign of spam (people buy big lists, email them all with minimal upkeep or control), and servers will block you if you keep sending to to addresses that have hard bounced.

In the fictional example I used above  I noted a 20% hard bounce rate. This could also be a signal that you’re already blocked, particularly if you’re seeing that a lot of bounces are coming from the same server.

That said, server wide hard bounces can also be caused by ISP outages and other factors, so you will want to double check with the postmaster if this is happening.

Keeping the goal in mind

The goal of your email campaign isn’t opens. It’s the profit that the email brings in, it’s the relationships it garners, it’s customer retention.  100,000 opens  ain’t great if your goal is action and those people aren’t taking it.

People who have signed up and are legitimately interested in what you provide are considerably more likely to take action than those who have not. Remember the aforementioned IMT Strategies (2001)  study which found that 76% of openers would open unsolicited email while “somewhat annoyed” by it? That’s a huge number of people who are off setting your open rate. People who will open, but will not take action and are not gaining any sort of appreciation for your brand. Meanwhile Quris (2003) found permission and privacy demanding subscribers are significantly more likely to open and act on email.

The Trap of Numbers

Now granted, 1% of 100,000 people taking action is still more than 20% of 300 people taking action, and that might make permission seem less than important. Indeed, even a 5% open rate on 1,000,000 emails with a 1% conversion rate is a solid number of conversions. So why do a double opt-in and reduce your list?

The strength of email lies in its ability to not just convert, but to retain. While a spammy mail campaign might get a good hit of sales at first, the factors listed above will make sure that over time your numbers decrease. Then you have to spend more money on new IP’s, mailing lists, and sending costs.  Meanwhile a permission marketing campaign brings in conversions time and time again, retaining business, building relationships, and costing only time.

The strength of a permission campaign lies not only in its high open rates, but in the overall strength it ads to your campaigns ability to retain and convert over time. You can make quick money doing mass spammy email (indeed, that’s why so many people still do it), but maintaining a quality relationship with your customer base that will allow you to promote to them time and time again with high interest and a willingness to buy… obviously that is worth a lot more.