Email Marketing Doesn’t Work
One Small Business Spent $5.3 Million On Email Marketing… And They FAILED
Email Marketing Doesn’t Work, But SMS Marketing Does… Here’s Why!
Let me say this right up front. I hate email marketing…
I really hate it.
Because it doesn’t work. Really, it doesn’t.
I recently had the opportunity to review the email account of a small publishing company… and what I found was shocking. (I’m protecting the innocent by not naming names here…)
Over 10 years they had spent millions of dollars on advertising.
Their number one goal, to collect email addresses for their newsletter.
They did everything on the up-and-up. Nothing blackhat, nothing illegal, no scraping, or stealing, or buying data. They built their list the old fashioned way… one name at a time.
And I’m not kidding when I say they spent millions.
I asked about the cost of building their database… and I almost fell out of my chair. They operated in a very competitive market… so lead costs were averaging about $9.00 an email address.
Guys – they have 591,122 email addresses on their list.
That’s a spend of $5,320,098!
$5.3 million over 9 years to build a list of email addresses.
They must be on easy street right?
Not so fast…
What Email Marketing Gurus Don’t Want You To Know
You’d think with almost 600,000 emails on their list, they’d be making money hand over fist.
Well, there’s a dirty little secret to email marketing…
You can spend a fortune gathering email addresses, but the ability to communicate dries up quickly.
Let’s take a look at our email marketing friends.
They had 591,122 email address on their list… so they must send out massive amounts of email… right?
Well, yes and no.
You see, legally, they can’t send to all of their list.
According to CANSPAM laws, if someone says “Do Not Contact” me, their email goes on the DNC List. If they hit the “Spam” button, or complain to their ISP, they are added to the DNC list too. The “do not contact” list is a hands off list.
You, as the list owner, can’t take someone off that list.
The customer has to request to be added back to your marketing list… and quite frequently, they have to make a special request to the company that manages your email software.
It’s not as easy as it sounds. But no big deal, right… rules are rules.
Consider this… our email marketing friends had 198,455 people added to the DNC list over the last 9 years. Some were added just moments after subscribing to the newsletter, and some were added years after joining.
What they discovered, is shocking. Some people were lazy (no surprise right) instead of clicking the Unsubscribe link, they just reported the newsletter as spam.
But that’s not the most shocking part…
Email Addresses Are Like Fish… They Go Bad QUICK!
As I dug into the fascinating data, I uncovered another shocking stat.
Are you ready for this…
211,218 of the email addresses had bounced.
Remember, each email address cost them $9… so they spent $1.9 million on email addresses that were wrong, abandoned, or invalid…. BOUNCED!
Now if you’re not familiar with the term “Bounced” it simply means they sent an email to the email address… and it came back as undelivered.
What might cause this?
There are hundreds of things… here are a few.
The email address was wrong (a typo)
The email inbox was full
The email address changed
The email address was abandoned
The email server was down
Bounces are a fact of life… but the reality of the situation is this… once an email bounces a few times, the email service provider segments the email address, and stops sending messages.
I spoke to another email marketer and they told me a shocking fact… “On average, people change email addresses every 24 months.”
Think about that…
Even if people want to get your emails, every 24 months they move!
But that’s not all…
Other Ways Email Goes Bad
The DNC list and the Bounce list aren’t the only ways email addresses fall off your list.
People can just unsubscribe… or if you use a double opt in sequence, they can fail to complete the signup process.
It’s not uncommon to have thousands of email addresses “not on any list”… or “pending confirmation”.
Our email marketer had 7,181 in limbo…
But if you’re quick on the math, you realize they still have a ton of valid emails. But you still don’t know the whole story…
When Having 174,268 Emails Is A FAILURE…
Our email marketer still has a ton of emails… they started with 591,122 emails in the database.
After you remove the 198,455 on the DNC list, and the 211,218 emails that bounced, and the 7,181 emails in limbo… you still have… 174,268 Emails!
Not bad right? That’s a huge list…
Well, not so fast.
Having 174,268 emails in this case is a near FAILURE!
Another Dirty Little Secret About Email Marketing…
There’s yet another dirty little secret the email marketers of the world don’t want you to know…
You can have thousands of thousands of emails on your list, but there’s no guarantee people will see, open, read, or engage with your emails!
Let’s dig deeper into the actual details behind our email marketer with 174,268 email addresses.
Let’s start with the most obvious group… people who just ignore your emails.
Once you build an email list of any size, your Email Service Provider (ESP) will start to encourage you to “Clean” your list.
What this means is they simply go through your list and pull out everyone who hasn’t opened an email, clicked a link in your email, or hit the reply button. Often these are labeled “inactives.”
Often your ESP will encourage you to re-engage these lost souls. It’s a lot of work, and rarely anything good comes from the effort.
Why do these people get swept away when you clean your list?
The reasons are numerous. But the list of inactives is is a much bigger group than many people recognize. You can send a valid email to a valid email address over and over again… but they may never see it.
The ISP might label it as spam and never deliver it.
It might end up in a different inbox (Gmail separates commercial emails into a different tab)
Your reader might just skip over your email and never open it!
Let me give you an example…
Our email marketer that I’m using in today’s article cleans his list all the time… and they average a 15% open rate! And that’s fantastic for him.
Another list I know of has 2 million emails on it… but their open rate is often less than 1%…
As email volumes increase, more and more people ignore and turn a blind eye to the emails they signed up to receive… crazy right!?!
When it comes down to it, inactives can be a huge portion of your list… and the older, and more frequent you send emails, the higher the likelihood your list is inactive!
Now my email marketing friend didn’t share his inactive list size with me, but if I had to guess, it’s probably close to 50%.
The Truth Behind Crappy Email Marketing…
So, let’s put this all together.
Our email marketer starts with 591,122 emails.
They remove 198,455 on the DNC list, the 211,218 emails that bounced, and the 7,181 emails in limbo…
If you figure 50% of their list is inactive that kills another 87,134 emails.
But wait we’re not done.
Of the remaining 87,134 emails… when you send a message, you’re lucky to see a 15% open rate…
So, 13,070 emails actually open the message… and the engagement rate is even smaller.
I know from experience, the best emails get a click rate of around 5%. Simple math shows 653 people clicking on a link in an email.
That’s how you go from 591,122 emails to a total of 653 clicks. (It’s a 0.1% engagement rate… one-tenth of a percent!)
Do the math… email marketing sucks.
You can spend millions building a list, then watch day after day as it shrinks, disappears, and becomes inactive.
There’s got to be a better way, and there is…
Move Now From Email Marketing To Text Message Marketing.
I told you there’s a better way… and here it is.
Text message marketing, or SMS marketing, or Mobile marketing. It goes by dozens of names… but it’s all the same.
You send a text message to a prospect, a customer, or a VIP.
Why is this so much better?
First, people don’t give away their phone numbers like they do email addresses. So they’re harder to get… and more precious… but when you get one, it’s like gold!
Consider this, I have 24 different email addresses (yes, I’m crazy)… but only one phone number!
Second, people don’t change phone numbers all the time.
For example, I last changed my phone number 10 years ago when I moved. Now with the new rules around cell phones, it’s easier than ever to keep a phone number… and most people do!
Third, when you text people they read it. Industry statistics show that over 90% of all text messages are read within a few minutes of arriving on a phone.
Finally, text messages are short and sweet. You can’t “overload” someone with ton’s of information in a text, and since text messages are intrusive, smart marketers send them infrequently.
Just to use a personal example, I sent out a text to our list a few days ago… and 30% of the list responded!
Now the list was smaller, and more refined… but I’d argue my 30% engagement rate is much more powerful than the one-tenth of a percent engagement rate the email marketer has!
The power of text message marketing is undeniable. If you’re a small business owner, and struggling with email marketing, now’s the time to look at text message marketing!
How Small Business Thrive With Mobile Marketing…
The Ultimate Guide to Text Message Marketing
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