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As for the spam issues that go along with email list usage - it really depends upon your particulars. Your mail server, the application you use, and the recipients mail server, etc... Reaching people at home is becoming increasingly harder and I don't foresee this getting any easier. Reaching business customers, however, hasn't changed much.
Is it worth the investment. I still think it is but with the caveats I mentioned earlier. You build the list and you nurture the relationship. This does two things. One it helps eliminate the anonyminity of your business by giving you the opportunity to display your personality. Second it offers your customers a way to contact you in return and gives them more of a sense that you're a real business and through the consistent and regular use of email, you establish a virtual identity in their minds. I'm relying on the old advertising rule of thumb here, the one that says it takes a potential customer seeing your ad 7-10 times before they will act on it.
...and as all the others have said (quite rightly too), building up and managing your own customer database as a marketing channel is one of the best ways to approach email marketing because you can be sure of the lead quality and also that they're interested in what you're selling.
Is buying an email list worth it? Maybe, it depends what you expect that list to do for you. Bought-in email lists tend to well as limited-use tools to sell products or build your customer database, they work less well if you just merge them with your existing customer data before you've confirmed the interest of the contact / prospect.
To get the most from a list you'd want to target people who've shown an interest in your area previously & who are in the right demographic - people who're more likely to register or buy something from you, therefore becoming part of your customer database which is a very valuable marketing asset in its own right.
Aren't all email lists rubish? No, a good well managed email list can be tailored to meet your needs, offer a good response rate, low bounce rates and very few spam problems but it will cost you more to use.
You'll note I said "use" and not "buy" - most businesses that sell quality email lists only lease their data for a set purpose, they don't sell it outright. They normally wont release their data outside the company and those that do will only release it to trusted 3rd parties - this ensures they have complete control over how and when their data which helps keep their list responsive as the people on don't get overloaded with junk.
Unless you're dealing with your own customer data then IMHO the best approach to legitimate email marketing is to pay a reputable agency or list broker to manage the campaign which allows you to treat it as you would a regular marketing exercise.
Why? Well for starters unless you're heavily into legitimate email broadcasting they're probably going to have a better broadcast setup than you meaning more emails get through, less get bounced or encounter technical issues. Quality email lists used to offer some kind of compensation or refund for verified bounces, but only if they're coming from a reputable source.
Being a client has it's advantages too; you have a knowledgable point of contact for your questions, their familiarity with the email lists available on the market should ensure you get the best results possible for your campaign and they should be able to offer advice on response rates based on previous campaigns.
It also means that if something does go wrong you're not left "holding the bag" because all the email comes from their servers and points back to their servers (so they can track response rates), although with 100% opt-in data that shouldn't be a problem.
Using seed names in a list works a little like this; the people compiling the list strike a side-agreement with some of the contacts - in return for some freebie or other the contract agrees to report back on any offers they recieve as a result of being on that list.
All the data-owners have to do is compare their list of "allowed" users with the responses from their seed names - if they find someone using the list without permission or using the list outside the terms of their license they send in the legal department armed with a copy of the license.
How do they know for sure?
Well if you managed to hit multiple seed names and those people have been given some unique identifier by the data-owner (such as a typo in their name) then the only way you could have done that is by using the list they provided to you.
Someone could have received or stolen the name from ANYWHERE. The disk could have been lost....hell...it could be a postal worker who used the address. It's awful tough to prove I'd imagine.
Well lets say they've given their "plant" data some unique contact information (for example giving Mr and Mrs Smith's house a vanity name when it's never had one, using a fictional middle name for Mr Jones or even adding a completely fictious person who doesn't exist) and for the sake of argument the seed names have been inserted really well so you can't spot them.
At this point you've got data which is unique to certain source or company and they could argue that there's no other way for you to have gotten that data except through them - Mr & Mrs Smith don't really have a tacky house name and Mr Jones doesn't really have a middle name so they couldn't appear elsewhere and then there's that fictious person only who exists in the data from one company.
Hitting a small number of seeded names might not raise any alarm bells but if you managed to hit a large portion of the seeded names present (complete with unique elements) then it'd be pretty obvious someone was using that data because the odds of those specific people randomly getting the same piece of marketing from the same company are going to be really-really-low.
What about if the data "leaks"?
Well there's nothing to stop a "seed name" from being unique to a certain client or campaign so they could identify the source of the leak and looking at the marketing to see who's using it now and then asking all manner of sticky questions.
ps. You're right that it's not an exact science, but that's why most companies who value their information generally don't let it out of their sight, and even then there would probably still be seed names present "just incase".
You're right that it's not an exact science
Actually, direct marketing companies have been doing this for years. They have a large seed list and the names are inserted with a code that identifies the mailing it was rented to. No one is going to go through a couple 10K names to look for them.
In physical mailing lists HannaK152HY Smith looks a bit odd and still works, but on an email list? That's like the norm.
Besides that, many of the "good" companies you can try renting from won't even let you get your hands on the list itself. You would send them the creative which they would then mail for you.
[edited by: lorax at 7:55 pm (utc) on Jan. 28, 2005]
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What about direct mail though?
CITYADMIN...that's all you paid for THAT many addresses? ...just $30?
A sure sign that the list is worthless.
Looking for a good list is like looking for a good girl/boyfriend, you don't want one that is cheap and has been used by everyone on the block. And if you do decide to shack up, don't come crying if you end up with some *ehm* problems. ;)
With direct mail, you normally do get the names and they are heavily seeded, so it would be impossible to be sure that you have removed the seeded names if you wanted to try to use the list again without permission. DM companies keep very close tabs on the mailings.
Email is both easier and harder. Easier, because you can easily put thousands of seed names in that a virtually undetectable. Harder because spammers use programs that create infinate number of letter/number combinations for email spamming and so could possibly mail a seed email without ever knowing a list exists. Can't really do that with seeded physical addresses.
Emails are much easier to mail than postal, so most of the time a list provider or broker will simply mail the list for you. Very good providers and brokers will provide a garuntee of return (i.e. 1% of the list will respond) so that you know you are not getting junk.
Either way, I would caution anyone who is thinking about renting a list to be very careful. Over the past few years, a few companies have been prosecuted for spamming when in fact they had either rented a bad list or someone with a bad list emailed on their behalf. The government considers you liable, even if the "guy told you it was a real opt-in list".
Spamming is now a crime and the government is taking it very seriously.