Guest Post by: TechnologyAdvice
Email campaigns are one of the most popular marketing tools for nonprofits. That’s because emails are easy to create, cheap to send, and can reach a large number of prospects in one pass. But they don’t always work.
According to MailChimp, the average open rate for nonprofit emails is about 26 percent, with a three percent click rate — pretty close to average, compared to other industry benchmarks. But maybe your campaigns aren’t doing as well. Maybe you’re looking at a 10 percent open rate with a one percent click rate and wondering where you went wrong.
If you’re using purchased email lists, that could very well be your problem. Purchased lists are supposed to be a shortcut to building a database of contacts that might otherwise take six months to assemble. And in that sense, they do save time. But when it comes to results? Not so much.
Sure, It’s Tempting for Nonprofit Marketers
Purchased lists are the low-hanging fruit of email marketing . . . only the fruit is rotten, and possibly poisonous. But did I mention it’s low-hanging? Unfortunately, there are a number of reasons nonprofits think purchased lists are a viable way to grow revenue. Here are some of the most common:
- - It’s easy: Purchased lists give an organization on-demand access to thousands of contacts without requiring them to invest time into gathering those contacts. Some list sellers even claim to provide targeted, permission-based lists (for example, if you needed a list of U.S. women over age 30). It’s like a buffet: pay a fee at the door, then take as many prospects as you want.
- - It’s cheap (or so you think): On the surface, it may seem like a pretty rewarding investment: spend a little money, get access to a bunch of contacts. But keep in mind you don’t always get direct access. Many list dealers only rent their lists, which means you pay a per-use fee to send one email to x-number of contacts. According to Worldata’s List Price Index, the average CPM (cost per thousand) for rented donor lists is about $88 — to send one email.
- - It’s technically legal: For the most part, the courts don’t care how you obtained email addresses. The CAN-SPAM Act allows organizations to send commercial emails without explicit permission, as long as the content and format of the messages meets some basic guidelines (but did you know purchased email lists are now illegal in Canada?).
5 Reasons Purchase Lists Can Hurt You
There are a number of ways purchased lists disappoint. In terms of lead generation and revenue, you can expect a mixed results, at best. At worst, a purchased list could damage your reputation and cripple your marketing campaigns. Here are six of the biggest dangers:
1) No True Opt-In
List sellers may claim that their contacts are 100 percent opted-in, but you should be suspicious. Typically, list sellers dupe subscribers with equivocal language and fine print — e.g. “Check here to receive relevant offers and communication from our partner companies.” Chances are, the site visitor didn’t even read this message, let alone understand what they were agreeing to. Some list sellers even use scanning bots to capture email addresses from random websites and forums.
2) Shared IPs
Conducting some brief marketing automation comparison will show you that most reputable solutions are permission-based, which means they don’t run campaigns with purchased lists. Instead, you’ll need to use a less reputable marketing automation service that forces you to share an IP address with other list buyers. As other companies’ messages are blocked, reported, and marked as spam (and they will be), your campaigns could also be blacklisted. Guilty by association.
3) List Fatigue
List sellers aren’t known for their data integrity. They often sell or rent the same list to multiple organizations or have duplicate contacts on separate lists. That means a lot of the people you’re emailing get frequent, unsolicited email from multiple sources, which creates a kind of numbing effect. After a while, they start spam-flagging and deleting emails from unknown parties without even looking at them (we’ve all been there). About 46 percent of consumers will mark email as spam because they receive it too frequently, and 36 percent will do so if they didn’t purposefully subscribe.
4) Poor Deliverability, Failed Personalization
Purchased lists are notoriously inaccurate, whether in the email address itself (which will cause failed delivery) or in other contact fields, like name, address, occupation, or company. That’s because people can tell when they’re signing up for a questionable email list, and many use fake credentials to protect their anonymity. “Namey McNamerson” probably won’t be interested in your latest fundraising campaign, since they were only trying to win a free iPad.
5) Campaign Underperformance
Just because you’re sending to a high volume of prospects doesn’t mean you’re more likely to get results. In fact, the opposite is true. The more you send irrelevant content to unsuspecting people, the lousier you can expect your results to be. MailChimp recently published some findings from their anti-abuse system. As they put it, “Positive engagement falls off a cliff as purchased correlation increases.”
6) Compromised Data Integrity
Sending batch emails to purchased prospects is damaging enough, but if you’re feeding those same contacts into your nonprofit CRM system, you’re creating an even more insidious problem: a database full of invalid credentials, expired addresses, and phony names. How will you weed out the valid contacts from the bad ones? Will you waste time and money on fundraising campaigns that fall on deaf ears? Can you trust your marketing analytics?
What To Do Instead
Prospect generation can be hard, but it’s the best way to stay away from purchased lists and build relationships with people who are actually interested in your mission. The approach is entirely different: instead of soliciting donations by blasting untargeted emails, you draw prospects in by offering them something of value.
One common example is through targeted content, like whitepapers, research studies, newsletters, and blog posts. Prospects can give their email address in exchange for access to these assets, or to receive updates about new content. You can use your website, social media accounts, and paid media to draw traffic to this content, or to other landing pages that request contact information.
Many nonprofits use networking events (fundraising dinners, conferences, etc.) as sources of new opt-in lists by asking guests to sign-in with their contact information (and give clear consent to receive communications). You can also try more inventive methods, such as raffle giveaways, contests, “members-only” site areas, webinars, and pop-up CTAs (calls-to-action) that ask participants for their information.
Nonprofits need to raise money and attract new supporters, and they don’t always have time to watch an inbound fundraising campaign slowly crystallize. But buying a list of contacts could permanently damage your ability to conduct email marketing. High-quality, opt-in leads aren’t for sale. They’re the ones you acquire by knowing and engaging your prospects, creating targeted content, and trading value for permission.