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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Chip House
October 2002

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When marketing via e-mail, get customers’ opt-in

WE ALL WANT TO SEE our businesses grow, and many are already using e-mail marketing to help out. One of the main challenges is e-mail address acquisition.

Not only is it difficult to capture the e-mail addresses for your existing customers, what’s more difficult is capturing addresses of prospects. This challenge pushes many businesses to take the easy road, purchasing cheap lists — spam lists — of e-mail addresses from a non-reputable source.

What these companies don’t understand, however, is that not only is mailing to a spam list bound to get them into trouble with their ISP or an antispam organization, it is less effective than mailing to a permission-based, opt-in list.

An opt-in list is comprised of e-mail addresses provided by consumers who have agreed to allow an organization to send them e-mail. They have “opted in” to receiving communications from this organization. The consumer decides to give that organization, and only that organization, permission to send e-mails to that consumer regarding the information, goods or services the individual agreed to receive.

As defined by Internet marketing pioneer Seth Godin, permission marketing is the notion that all communications with your prospects and customers should be anticipated, personal and relevant. The organization will have a better idea of who the customers are and what they are interested in, which allows them to send a more personalized and relevant message. Is this important? Yes!

Here are the main reasons opt-in lists are more effective:

1. Response rates are higher with opt-in lists. Consumers or businesses anticipating marketing communications are more likely to respond to them. The permission they gave to you turns into a trusting relationship. Their knowledge of who you are will make them more receptive to what you have to say. Your knowledge of who they are allows you to more effectively tailor the message to their needs. Since the customers on a permission-based list are all interested in what you are selling, your communications will be relevant to the audience, which makes them more likely to be read. This is true for both e-mail newsletters and product promotions; e-mail is most effective when it is anticipated, personal and relevant.

Opt-in lists may see open rates as high as 60 percent and response rates as high as 35 percent, versus open rates of 10 percent and response rates of less than 1 percent for unsolicited email. As Godin says, “Permission marketing cuts through the clutter and allows a marketer to speak to prospects as friends, not strangers.” Developing this trusting relationship is the key to retaining customers and building future revenues.

2. Opt-in messaging reduces costs. Many marketers believe in “firing” their worst customers. Why is this? It is because the cost of communicating with these customers is higher than the revenue received from them.

In much the same way, using your resources on customers who have not opted to receive information from you is wasteful. Mailing to 500 people wanting to hear from you is much more effective than mailing to 5,000 people who don’t know who you are. Frequent communications with consumers expecting to hear from you efficiently uses your resources only on people likely to respond.

3. Ignoring e-mail etiquette could be disastrous for your company. Permission-based e-mail marketing is not only the standard accepted by most reputable firms, it is also the only form of e-mail marketing that is acceptable to a large number of anti-spam organizations. Sending spam or unsolicited commercial e-mail (UCE) could have very negative consequences for your company.

For example, many anti-spam organizations have the ability to add you, and your servers, to a “black hole list” or “block list.” A black hole list contains the IP addresses of known spammers. Many ISPs subscribe to these lists to reduce the high number of server-taxing unsolicited messages received by their members. If your company is listed as a spammer, 10 percent to 50 percent of your messages may never reach their intended audience. Pending anti-spam legislation could also get you in trouble with the law in some states or countries.

4. Frequent mailings reduce customer attrition. Once you have developed a relationship with your customers, and nurture it on a regular basis via opt-in e-mail newsletters and promotions, you are less likely to lose those customers. Retaining existing customers is far cheaper than acquiring new ones, plus they tend to buy more items and more often if you communicate with them regularly.

5. Permission is an asset. Permission is NOT transferable from one organization to another. Therefore, an opt-in list is a huge asset to your company. Each name on an opt-in list represents a relationship, and that relationship has value. That is why anyone offering to “sell” you an opt-in list is probably pulling your leg. Opt-in names are too valuable to sell. However, you can “rent” names from reputable providers of opt-in e-mail names such as NetCreations or YesMail. This organization specializes in opt-in e-mail marketing, and since they have the relationship with the consumer, they send the e-mail on your behalf.

Successful e-mail communications, just like successful customer relationships, are based on trust. In the long run, you’ll be ahead of your competition if you follow that rule when you develop your e-mail list.

[contact] Chip House is director of marketing for Exact-Target in Minneapolis, a maker of web-based e-mail marketing software that helps companies execute e-mail marketing campaigns: 612.839.4369; chip@exacttarget.com; www.exacttarget.com