The impact of poor data quality is larger than you think. Royal Mail in the UK released a pre-GDPR report showing the average cost of poor-quality customer contact data is 5.9 percent of annual revenue. Return Path’s Lifecycle Benchmark report identified 34 percent of new B2C subscribers will churn within 30 days, largely attributable to poor quality addresses. The Direct Marketing Association’s (DMA) Marketer Email Tracker report calculated email subscriber lifetime value at £37.32, so the opportunity cost is around £12,500 per thousand sign-ups!
So, armed with a better appreciation of the financial impact of poor email data quality, let’s look at factors that influence it:
1. Acquisition
It’s important to review all opportunities for email address collection. They can be obtained online via your website, in-store at point of sale, via your call center, etc. Regardless of the method, you should ensure you are only bringing real email addresses into your program. The best approach is by implementing an Email Verification API to validate the new addresses at point of collection. Also, check out these four great ideas here for how to optimize your acquisition process.
It’s also vital to acquire Primary (not Secondary) email addresses. These are subscribers’ first choice addresses–the ones they engage with every day. Return Path research shows that while Primary addresses only form around ¼ of a typical B2C list, they generate over 80 percent of total opens. Subscribers are far more likely to provide primary addresses if they trust the sender, and this is a function of robust consent, transparency around how personal data is used, and establishing a strong value proposition. These align with fundamental principles of GDPR, and many European senders are now seeing better ROI as a direct result.
2. Hygiene
Once you have good email addresses in your database, you want to keep them that way. This is where effective list hygiene comes into play. In particular:
- Make sure all bounces are processed properly and in a timely fashion. Check out this bounce processing guide for a better understanding of bounce codes, and how to process them.
- If subscribers complain about your emails, suppress that address immediately. Failure to do so may result in further complaints from the same subscribers, which are extremely harmful for your sender reputation metrics.
- The same goes for unsubscribes. It’s also worth noting that making this a simple and transparent process can even have a positive impact by creating greater trust. Messagegears produced research showing Gmail opt-outs have decreased since introducing their new “easy unsubscribe” functionality.
Need to review your current process for handling complaints and unsubscribe requests? Our Guide to subscriber complaints and our post on 18 ways to improve your unsubscribe process can help!
3. Time
Consent doesn’t last forever! In the UK, the Information Commissioner’s Office (ICO) guidance states:
Consent will not remain valid forever. How long consent remains valid will depend on the context . . . [and] it will become harder to rely on as a genuine indication of the person’s wishes as time passes . . . . Exactly how long an organisation can continue to rely on consent will depend on the circumstances and the person’s expectations.
A good rule of thumb is to consider the sender’s business cycle–if transactions average once per quarter, then consent should be no more than double that period. Of course, Mailbox providers may have higher expectations. Gmail’s “easy unsubscribe” functionality makes it clear consent expires after 30 days of inactivity (in their minds!).
This is a basic rule of deliverability too—highly engaged email addresses boost your reputation and achieve good inbox placement rates vs. less engaged addresses that don’t.
It should be a no-brainer to keep only good subscribers who want to receive your emails. Consider the following approaches:
- Proactively verify your sending list every six months: This data cleaning suggestion ensures you remove inactive email addresses before they are recycled into spam traps by mailbox providers, helping maintain a good sender reputation, and avoiding the risk of potential blacklistings!
- Suppress non-responders from your list: Inactive subscribers may have once engaged with your program but have since stopped opening your emails. Before you completely write them off, a win-back campaign is a great way to try and bring them back. However, if they still fail to respond, you should then remove them as part of a good list hygiene process–it’s a sensible trade-off between quality & quantity.
- Double-check those hard bounces: It’s well known that some mailbox providers return hard-bounce codes for non-permanent conditions. Microsoft’s bulk sender guidelines show reasons including “spam-like characteristics” and “IP reputation” and list owners then suppress these addresses in good faith. Using a validation solution like BriteVerify means senders can flip the normal use case on its head by identifying good addresses that they should be keeping on their lists.
Return Path’s recently released Sender Score Benchmark report shows the average Unknown Users rate for an email program with a reputation score in the 81-90 band is more than 3X higher than a program in the 91-100 band (3.2 percent vs. 0.9 percent). There is also a 20 percent difference in delivered rate between these two bands (71 percent vs 91 percent). Cheetah Digital’s Q4 2018 benchmark report quotes revenue per email of $0.08, so poor data is costing a 1M address list owner $16K every single send!
What are you waiting for? Start cleaning up your act–now!