10/1/99 Am. Demographics 40
1999 WL 8079216
American Demographics
Copyright UMI Company 1999. All Rights Reserved. Copyright PRIMEDIA Intertec
Oct 1999
Friday, October 1, 1999
Volume 21, Issue 10; ISSN: 0163-4089
The power of opt-in
Kendra L Darko
Consumers are taking control of what ends up in their mailboxes,
both real and virtual. BY KENDRA L. DARKO
Whether it's delivered by the friendly neighborhood mail carrier or
stuffed in an e-mail inbox, junk mail is usually not a welcome sight
to consumers. The average American finds 22 pieces of mail in his
mailbox each week, only one of which is personal, according to the
latest U.S. Postal Service Household Diary Study. Households between
the ages of 35 and 69 with higher incomes or education levels get
even more junk mail than average.
But consumers have ways to stymie marketers. They can sign up for
the Direct Marketing Association's Mail Preference Service and hope
that the waves of junk mail eventually subside as DMA member
companies update their records. But that service cuts out all
advertisements-and research shows that people do like to find some
come-ons in the mail. In fact, 33 percent of MPS registrants who
responded to a survey in 1992 said that if it were available, they
would like to pick and choose direct mail by category, rather than
block all advertisements. And according to the USPS study, Americans
read or at least scan more than 88 percent of all advertisements
they get, rather than simply tossing them in the trash without a
glance. Roughly 14 percent to 18 percent say they plan to respond to
the offers. And most people say they prefer regular postal mail to
email. More than three out of four households with e-mail access
told Pitney Bowes that they prefer to get newproduct announcements
or offers from companies they do business with by postal mail. The
only problem is, companies don't know what mail consumers want-and what they don't.
That's starting to change, thanks in part to The Polk Company's
ChoiceMail program. ChoiceMail allows the more than 18 million
recipients of Polk's Buyer's Choice Survey of America to indicate
which types of direct mail they'd like to see in their mailboxes,
and which they wouldn't. The survey is mailed monthly to targeted
groups of consumers from Polk's Lifestyle Selector and Response
Selector files.
ChoiceMail differs from the DMA's service because it doesn't
suppress all direct mail. Instead, consumers choose which mail
they'd like to receive in more than 100 categories, including
insurance, stamp collecting, and vitamins. Since its inception in
1996, 6.2 million consumers have joined the ChoiceMail program. And
less than 1 percent of the people in ChoiceMail overlap with the 3.5
million people who've registered with the DMA. "We query individual
consumers and find out what they want," says Steffie Hemmingson,
ChoiceMail product manager. "We're doing the opposite of what
mailers do, which is to target by demographics."
Companies who sign up for ChoiceMail match their lists of customers
against the names of consumers who've asked that they not receive
mail in a particular category. For example, a women's clothing
cataloger would run its customer names against the list of
ChoiceMail households that don't want to get pitches for women's
clothes, shoes, or lingerie. For every name matched, the marketer
pays Polk 5 cents. With an average match rate of 3.5 percent,
companies can choose to either mail to fewer households or replace
those uninterested parties with ones from another list that might
yield more interested consumers. Tests have shown that mailings sent
to names that appear on ChoiceMail's opt-out file respond 30 percent
to 40 percent worse than nonmatches.
ChoiceMail helped consumer electronics company Crutchfield
Corporation cut costs by mailing out fewer catalogs. About 11
percent of the names on Crutchfield's lists matched the ChoiceMail
file, says Robin Lebo, director of customer acquisition, but the
company didn't remove everyone who turned up as a match. Instead,
Crutchfield decreased its catalog mailings by only 5 percent and
kept certain people on its list if they fit other target market
characteristics. For example, a consumer who showed up on a profitable car stereo magazine list was still mailed a catalog, even
if she had indicated through ChoiceMail that she didn't want to
receive junk mail for audio equipment. Surprisingly, when the
company ran its oldest customer file against ChoiceMail and mailed
only to the non-matches, response rates increased by more than 30
percent, notes Lebo.
While consumers may be just starting to wield control over what
doesn't show up in their home mailbox, they've pretty much dictated
what does land in their e-mail inbox for quite a while. Spurious
spammers will always exist, but legitimate marketers that don't ask
for an individual's permission before clicking on the "send" button
could find themselves without many customers in the very near
future. "The way we look at it, it's permission, relevance, and
trust," says John Lawlor, president of EmailChannel, an e-mail
service provider. If list owners don't carefully screen the
solicitations sent by third parties to make sure they are
appropriate and relevant to what the consumer wants, they may find
their lists becoming more and more decimated as consumers decide to
opt out, he explains.
A person's interests-rather than their demographics-usually
determine what kinds of e-mail promotions they'll receive. For
example, if someone is interested in toys, "We might not know who
they are," says Jim Carini, director of corporate communications for
yesmail.com, a permission e-mail network. "It might be a 90-year-old
grandfather, and not a typical mom with two kids. Traditional
demographics can miss some of those targets, so we work off
interests."
"We try not to get a lot of data initially," says Gary Brooks,
president of e-mail marketer emaildirect Inc. "As people use the
service over time and gain faith that they won't be bombarded with
spam...then they want to give more information and personalize their
preferences." For example, consumers who give pets' names might find
an offer from Purina in their e-mail inbox, addressed not to them,
but to the family dog. Such targeted, personal solicitations build
brand loyalty and make the offer stand out, notes Brooks.
Other opt-in e-mail offers allow people to pick particular brands
they'd like to hear from rather than just receiving e-mail from
companies that fall into a particular category. For example, Digital Impact, Inc., which manages popular lists from companies such as The
Sharper Image, Omaha Steaks International, and Tower Records, has
introduced a new service, called Email Exchange, in which consumers
on one company's list can specify other Digital Impact clients that
they'd like to know more about. So far, consumers who have joined
retailers' lists through Email Exchange have been two to four times
as responsive as people who've signed up through the retailers'
individual Web sites.
Since e-mailers usually only ask for basic demographic information,
such as name, e-mail address, gender, age, and ZIP code, it's hard
to pinpoint who's out there. "There is no standard profile of
people" opting in, says yesmail's Carini. Although it's possible to
append demographic data onto these lists, "so far we haven't seen
too much of that," says Ray Kaupp, vice president of marketing for
Digital Impact. Rather than demographic information, Digital
Impact's clients rely on transactional data-along with some
self-reported preferences-to target offers. "What's different about
the Web is that you have all kinds of shopping information already
available...clickstream data from the site, as well as
transactions," Kaupp says. "As a determinant of purchase behavior, that stuff is more powerful [than demographics."
Who's more likely to sign up for virtual sales pitches? Opt-in
e-mail lists tend to draw busy professionals looking to save time by
shopping online, says Louise Price, marketing manager for e-mail
list broker NetCreations, Inc., so the largest lists reflect
products that this group is most interested in, such as computers
and books.
"When we initially started building our network, we ran into a
younger group of people skewed toward interests in technology and
computers," says yesmail's Carini. Over time, that's flattened out,
he adds. "Part of our strategy is to partner with other companies
that will enable our network to mirror the general population," he
notes. More and more, customers signing up with companies such as
MapQuest.com, Inc., a Web site offering surfers maps and driving
directions, and Peapod, Inc., an Internet grocery shopping site,
look like the average American, Carini points out. "When we have
that critical mass, that flattened-out bell curve, we will be able
to offer any group to any marketer," he says-whether it's a baby
boomer executive looking for the latest Grisham novel, or a nonagenarian in search of Pokemon cards.
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