The Power of Opt-In

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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 e-mail. More than three out of four households with e-mail access told Pitney Bowes that they prefer to get new-product announcemen! ts 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 5cents. 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 non-matches.

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, 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, 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 PokAmon cards.

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