To Opt-in or Out, That is the Question
By George Anderson
Companies involved in email marketing face the question of which is the best way to go when developing contact lists — should customers be required to opt-out of receiving online communications or is it better to have them choose to opt-in for mailings.
Seth Godin, author of several books, including Permission Marketing and All Marketers Are Liars, is a firm believer in opt-in as the way to go. “[Companies] are moving away from the eyeball game to finding the qualified people who are interested in their products and services. One way is to go to a singles bar and propose to everyone you meet; another is to go on a date and build up from there. Opt-out is like going to the singles bar.”
Some companies that developed extensive contact lists using the opt-out method are now questioning if they should convert to an opt-in process, considering the impact it will have on their email marketing efforts.
Don Peppers, co-founder of the Peppers and Rodgers Group, writing for Inside 1 to 1 concludes it’s natural to see list size decrease when going from opt-out to opt-in. “Whereas a company might have thought that 200,000 customers wanted to hear from them on a regular basis, many shudder when learning, after the switch, that the actual number may be closer to 15,000. That’s the reason, most experts believe, why opt-out has been relatively slow to take hold.”
While downsizing a mailing list can be scary for companies, Mr. Peppers suggests, “The right way to think about it is that while your opt-out list may show 200,000 ‘customers,’ the vast majority of them are for all practical purposes inactive. What does it really cost you to reduce your communications to inactive customers?”
According to Mr. Peppers, there is a right and wrong way to go about transitioning from an opt-out to opt-in model.
Among the right way practices are providing “meaningful incentives for customers to reaffirm that they still want to hear from you.”
Alan Chapell, president of privacy consultancy Chapell & Associates, said companies should also consider that opt-in or out doesn’t have to be an all or nothing proposition. “Maybe it’s not a question of yes or no, but rather one of how much and when.”
Peppers and Rodgers’ other cofounder, Martha Rodgers, Ph.D., agrees. “Instead of an on-off switch, it should be a volume dial. Customers should be able to pick and choose what, when, how, and how frequently they want to be contacted.”
Moderator’s Comment: What is the best method for driving sales through email marketing — opt-out, opt-in or a combination? What recommendations would
you make to a company looking to make the transition from an opt-out only model? –
George Anderson – Moderator
The sad truth is…spam works. If it didn’t, it wouldn’t be a problem. If a marketer is starting from scratch, without a database of existing or prospective customers, a sure technique is to spam a huge, unqualified list and then work with the responses to build a qualified base. Otherwise, it’s a Catch-22. How do you invite people to opt-in if they haven’t given you permission to send them an email? You’re faced with using other, much more expensive media (direct mail; radio; TV) to invite people to opt-in.
So as much as I agree with previous commentators on the negative affects of the opt-out (essentially spamming) method, it will have it’s secured place in the eMarketing Best Practices Manual until something better comes along.
I assume the article meant “opt-in” has taken a while to catch on. That said, the question is do we want to sit around the locker room bragging about who has the biggest database – or who’s making the most money per customer on their list? (For those who insist on the former, I know some people who will sell you a million email addresses for only $98!)
Opt-out basically says, “We’re going to do this to you whether you want it or not” – hardly an engaging strategy. According to Gallup, around 85% of our customers aren’t engaged at the best of times and will drop us like a rock at the slightest provocation, so my advice is don’t abuse them with spam.
The other half of making even opt-in lists work is the quality and customer-relevancy of the copy; but that’s another issue.
The Sales Prevention Institute has proven many times that e-mail is the lowest cost way to maximize customer anger. Companies using Best Practices have learned that the key to customer harassment is frequent repetition. Modern technology enables this repetition at low cost, instead of using high cost labor-intensive telephone boiler rooms in slave labor locations.
Critical to the successful technique is complete refusal to have any empathy for the victims. Remember, sales prevention is the quickest way to cut costs!
Companies with an opt-out policy annoy me intensely, particularly when the box to be ticked uses a very small typeface that you have to read in order to see what you’re choosing. In a sense, they are no better than companies that use cold-calling to pester potential customers. Although there is a huge difference in marketing costs, you are still wasting a great deal of time and effort contacting people who are unlikely to be interested in what you’re offering and who may, in fact, be antagonised by your efforts. How to make the transition is simple and straightforward – send an email with an incentive, say how much you hope that you will be able to irresistibly tempt them at some time in the future and then grit your teeth. You may well find out that only a percentage of the people you’ve been badgering are really interested. And that may teach you a valuable lesson, worth far more than what you may be losing in occasional potential sales.
The key to email success has more to do with the content of the email than it does with the method of subscribing customers. In the minds of consumers, spam is any unwanted email, whether they officially opted-in or didn’t opt-out is less important than if they genuinely see value in the communication.
A powerful way to create value for the customer is to personalize the emails to their situation. Here are a few examples that I think work well.
– An oil change company provides reminders for when the next service is needed.
– A lawn care company provides personalized advice on when lawn treatments are required based on the customer’s personal lawn type and area where they live.
– A grocery retailer sends alerts about items that are on sale that the customer has bought before based on their loyalty card purchase history.
– A baby care products company provides informational emails based on the baby’s age and development.
– An allergy medicine provides a service to alert allergy sufferers about the levels and types of pollen based on where the customer lives.
Resist the temptation to deliver a marketing pitch and instead focus on providing a service to customers and you’ll have more success with your email efforts. That type of approach is well suited for opt-in because you will be creating value for customers that they will want to receive. In fact, you’ll know it’s working when subscribers tell their friends to sign up.
The problem with developing an e-mailing list through spam is a problem of measurement.
It is easy to measure the number of positive responses. But how can retailers measure the anger of the negatives? Is it worthwhile to get 1,000 new customers if at the same time you get 1,000 people (or more or less, no one knows how many) annoyed or angry?
Since retailers can easily measure the positives, they may claim success. Since they cannot measure the negatives, can they ignore the damage?
Some say that if one person complains, you really have ten people who are unhappy, because only a minority actually does complain.
If 10 opt out, does this mean that 100 are annoyed?
I agree with Alan Chapell, who happens to be a close friend of mine, when he said, “Maybe it’s not a question of yes or no, but rather one of how much and when.”
From personal experience and frustration with spam and e-mail marketers, I find that it might be more responsible if a company sent an opt-out e-mail once every 3 months or so and maintained an opt-in database that receives an e-mail every two weeks, or some variation of this model.
You can’t really even divide the choices into “opt-out” and “opt-in.” Having worked for Seth and being in the business of email marketing, I can tell you a LOT has changed since Seth wrote Permission Marketing.
Setting aside the completely unethical spammers, who will do what they want, any decent email list broker can tell you exactly when someone gave permission to receive third party messages. The best ones even send a confirmation email to the list with another chance to opt out. Rarely will someone require a second affirmative opt-in. In today’s climate, you can expect that your email will not reach a large percentage of people who actually did want to get your message, so why cut them off until they have a chance to ask you to stop? So when you as a marketer buy a 3rd party list, you are mailing to people that ostensibly agreed to allow you to do so.
From there, most companies will use a pre-checked opt-in. It is not an opt-out in the classic sense of ‘I’m going to keep mailing you until you tell me to stop.’ If done properly, it is clear to the user that when they click the Submit button they are going to get other marketing messages. Or maybe it’s not so clear…
Unfortunately, the media continues to advise people to NOT unsubscribe from lists, because you’re only confirming that a mailbox is active. IMHO this is very bad advice. The spammers are going to send you mail anyway. It costs practically nothing to continue to do so. The only thing that will stop them is a hard bounce from your mail server a few times in a row. On the other hand, a real email marketer will have you out of their list promptly if you unsubscribe, and will not add you back in when your name comes back in from other sources.
My best advice is to use common sense in your methods. Consider the context of the message, the source, the offer, and the nature of the list you are building when deciding how to collect permission. Put yourself in the consumer’s shoes and use clarity as your guide. Is it clear what is happening when I click this button? If so, you’re OK. And to come back around to Seth’s analogy, “No” still means “no.”
Maybe, since we live in a world that distributes 99 coupons that get trashed for every one that gets redeemed, it makes some sort of sense to irritate 99 potential customers for every one who wants to be contacted.
I thought we settled this eight or ten year ago. I remember going to some of the early internet commerce symposiums, and everyone had already realized – opt-in is the only way to go that exhibits even slight respect for the consumer.
Why did we get a national do-not-call law? Because marketers confused activity-per-thousand with success. They ought to be measuring conversion-per-1000 contacts – and if it is anything close to 1%, they ought to go kill their campaign before they kill the entire potential marketplace.