Adventures in Mobile Marketing

Why Bulk is Bad

Saturday, 24. March 2007 by Anna Billstrom

There’s this inclination to use email as advertising, and broadcast a message, like a gardener broadcasting by throwing seeds around indiscriminately, instead of planting two seeds 2 inches apart, knowing that at least one of them will spring up through the earth. So if you email 10M folks with a “sale on Charmin,” with little consideration as to whether the customer has ever bought toilet paper at your store, has any interest in paper products, has shopped there recently, or has even opened your emails. After considering the risks of being classified as spam, and seeing the amount of profit you can get from tailored message, it will be clear why bulk is bad.

Spam! Spam! Spam!

The use of the word canned meat to mean tons of litter in your inbox came from:

“Lobster thermidor aux crevettes with a Mornay sauce garnished with truffle paté, brandy and with a fried egg on top and spam”- I love that line. I generally use this term irreverantly. In corporate marketing, “spam” is like saying “Mordor.” Nobody likes to be associated with those that abuse the system.

I use SpamHaus‘ definition: bulk emails that are unwanted.

The word “Spam” as applied to Email means Unsolicited Bulk Email (“UBE”).

Unsolicited means that the Recipient has not granted verifiable permission for the message to be sent. Bulk means that the message is sent as part of a larger collection of messages, all having substantively identical content.

A message is Spam only if it is both Unsolicited and Bulk.
- Unsolicited Email is normal email
(examples: first contact enquiries, job enquiries, sales enquiries)

- Bulk Email is normal email
(examples: subscriber newsletters, customer communications, discussion lists)

Bulk is What Bulk Is

Bulk to one is not bulk to another.The definition of bulk is relative.

  1. ISPs will consider a rate of transmission, the number of recipients over the time of the send.
  2. Marketers consider this bulk because there is no segmentation- you’re emailing all customers.
  3. Recipients will consider it bulk because it is not personalized, and has no earmark that they are individually being addressed.
  4. Email controllers like SpamHaus and other consumer groups will consider it bulk because the ISPs generally consider it bulk.

Why is Bulk Email so Bad?

Basically, the costs of the bulk emails don’t compare to the profits, over time. Let’s use two scenarios:
1) Bulk message to 10M users, sent once a year.
2) Same offer, but sent daily to relevant targets, based on specific activity.

A creative team member may take a few days to create, get feedback, and finalize. Various other team members contribute to segmenting, transferring, getting approval, working with the vendor, etc. Let’s say two weeks with a staff of 3. This is for a high quality, corporate message. Average Bay Area salary, 75K, 40$/hour. $10,000 in employee labor costs. This cost doesn’t change.

The vendor, though, charges by the thousand. For bulk, let’s round up to $5,000 for the vendor costs in sending this email. Total cost for bulk: $15,000. This does change- the size of the email and the costs entailed with size.

For bulk, the income generated from the blast depend on the customer’s level of interest. For bulk emails, the interest is far less. I’ve seen on average, 0.10% to 0.15% as expected response rates (combination of open/click/view) to a large drop with a generic offer. The purchasers that come out of that- % of purchasers of openers, are usually higher, like 20-25% (of the respondents). So the respondents – 10-15K, and 20% of those, 2 to 3.8 K.
Let’s say the corporation nets $40 profit on each item sold after the sale discount. Total possible upwards income: $150K. Minus cost, $135K.

For an automatic, recurring email based on a customer’s activity. Costs? Creative is the same: $10K. The number of emails sent is far lower, though. Let’s say daily, 2,000 customers qualify for the message each day. Yearly, roughly 700K. Based on the earlier per M rate, that is $350 in send costs. With labor costs, let’s round to 10K. The costs are lower, and the customer response levels are higher.

Generally, responses for automatic, personalized, timely (see Triumvirate) I’ve seen campaigns with anywhere from 20-50% (140K-350K) response rates – that includes opens/clicks/views. On top of that, the purchasers are higher, from 20-30% (7K to 105K) (over respondents). $4.2M in profit ($40 X 105). This was a fast calculation, but you can see quickly that boosting the rate of interest in your customers boosts the entire equation in your favor.

OK maybe numbers don’t convince you. Imagine, a general notice to the entire company that there’s a birthday party in the cafeteria. Imagine your friend swinging by your cube saying, “Let’s get some cake- it’s Sandra’s birthday.”

Quick list about why Bulk is Bad

  • Costs are High. There are static costs- based on volume- but if you increase the customer’s interest, it offsets those costs.
  • Form letters don’t work. Everybody knows they’re receiving a form letter. (See non-personalization in the Triumvirate). You know the joke about online daters sending out form letters with nothing personal in it whatsoever. “I read your profile. You’re hot. Email me.” Everyone can see through that. It’s also a numbers game with the lowest common denominator returns.
  • Degrades reputation.. This is where reputation and brand/corporate identity come in. Everybody can tell (see above bullet), and they file it away with general communication from your company. It says you don’t know how to communicate with your customer, because you probably don’t have the processes to find out who they are, or you don’t care- see “fast buck”.
  • Not recycling efforts. Bulk emails rarely recycling the creative and technical resources created into ongoing automatic campaigns, making those costs even less efficient.

Working on Part 2: Spammers & Corporate Stereotypes

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