The "E" list

Entrepreneur, Dec, 1998 by Melissa Campanelli

Spam no more! Legitimate ways to use e-mail to market your business

What would happen if you built a Web site and nobody visited? How would you raise awareness for a one-time Web campaign without sending a promotional e-mail message to prospects?

The best way for many small businesses to solve these predicaments is to compile a list of opt-in e-mail addresses of people who would most likely respond to a sales message from you. That's what Mitch Lowe decided to do last February. Lowe is president of Special Delivery, an "of the month" club company in St. Charles, Illinois, with 12,000 customers, about $7 million in annual sales and 30 employees. After launching a Web site in January to work in conjunction with a direct sales force and mail order efforts, Lowe decided to run some special Valentine's Day promotions focused on his of-the-month clubs.

Instead of launching the program and waiting for visitors to come, Lowe

purchased a list of names from several incentive-marketing companies that offer clients rewards, bonus points and cash for permission to send them e-mailed solicitations. These marketing companies compile lists of consumers - men and women in specific demographic groups - who may have shown an interest in gift clubs or gourmet items and have agreed to receive e-mail messages from companies such as Special Delivery.

Lowe first contacted Intellipost Corp., an e-mail marketing firm, and began using its BonusMail (www. bonusmail.com) program. When consumers sign up to receive BonusMail promotions, they are awarded credits that are good toward gift certificates on items such as T-shirts, CDs, flowers and pizza. They receive additional points if they read and respond to the e-mail. Intellipost boasts more than 600,000 users and hopes to grow to 2 million by year-end.

Lowe also worked with other well-known companies, including MotivationNet LLC and its My-Points program (www.mypoints. com), FreeRide Media LLC (www. freeride.com), and CyberGold Inc. (www.cybergold.com). Lowe sent out promotional messages to hundreds of thousands of these companies' registered users for holiday campaigns in the spring and fall. "We've added about 4,000 new customers and 25,000 new prospects to our roster," Lowe says. "We're very pleased with these lists; they've given us better results than any other Web advertising we've done, such as banner advertising, because they let us send promotional messages to targeted individuals."

THE SPAM STOPS HERE

The great thing about these lists is that people choose to be included on them. Companies using the lists are not "spamming." They may also have purchased software products that allow them to cull large groups of e-mail addresses from ISPs or commercial on-line services.

Most consumers are wary of spam, and sending an unwanted message to a potential customer may backfire. Even if you don't get a mailbox full of nasty responses from spam you send out, you're unlikely to see much in the way of sales. The stigma attached to spam often sends it to the trash bin.

According to Lowe, people on the receiving end of opt-in e-mail messages are much more willing to consider your pitch. "[These services] are viable ways to reach consumers," says Lowe. "We've used them for two different promotional campaigns, and we've never received [a request] from anyone we've reached asking for their name to be taken off the lists."

OPT-IN OPTIONS

There are now many e-mail marketing companies to work with nationwide. NetCreations Inc., an Internet marketing firm in New York City, for example, offers an opt-in e-mail service called PostMaster Direct Response (www.postmasterdirect. com). But unlike Intellipost and its cousins, it doesn't offer incentives to people who sign up to receive messages. Instead, it relies on its list-management partners, including magazine publishers who have opt-in lists of subscribers, for many of its 1.5 million names.

Rosalind Resnick, president of NetCreations, also advertises the service to encourage more people to join its site. Resnick says her lists are "double opt-in." "After we receive opt-in names, we e-mail those addresses and make sure the [users] are willing to receive e-mail messages from companies," she says. Willing participants are placed on 9,000 different opt-in lists; companies interested in promoting their Web sites may rent these lists.

Several new companies offer a combination of opt-in e-mail lists - from members who sign up, from list management companies and from incentive programs. All these companies offer a variety of services, including identifying target audiences, writing e-mail content, delivering e-mail and monitoring performance. Prices for the lists vary from about $100 per thousand names to 15 to 20 cents per name, and most companies charge a basic one-time fee of about $100 to $300. Steve Hardigree, president of eDirect, an e-mail-based direct-marketing company in Boca Raton, Florida, says these companies' services are well-suited to small-business owners. "The [cost per thousand] rates are low, and there are no postage or paper costs," he says, adding that 90 to 95 percent of his clients are small businesses.