When You Really Lose Customers

On the Move

Luckily, there's a place entrepreneurs can go to solve this problem. Return Path Inc. (which funded the aforementioned study and recently merged with Veripost Inc.) offers an electronic change-of-address directory. The company compiles e-mail address changes directly from consumers who register at its Web site and then updates the various other companies that still might have the old e-mail addresses. The system not only simplifies the updating process for consumers, but also allows them to use the service to recall all the places where their e-mail addresses are registered.

The cost of the service depends on the size of your customer database and is essentially billed on a pay-for-performance basis. Sometimes there's a minimum setup fee of $500. Then, on a monthly basis, Return Path will bill the client for all updates delivered. An electronic change-of-address correction costs between 80 cents and $1 per correction. For most entrepreneurs, the cost will fall between $500 and $3,000 annually. And you should expect the service to correct about 10 percent of your total customer mailing list.

You can either work directly with Return Pathor through e-mail marketing companies like Bigfoot.com, Digital Impact, DoubleClick, Lyrisand Responsys. The main benefits of going through a partner are convenience and ease of effort when getting started. Prices vary slightly depending on which vendor you use.

Many business owners swear by these services. "It allows us to keep up with our customers and market to them better," says Eran Weis, 36-year-old founder and CEO of Moving.com, a New York City relocation Web site launched in 1999. His e-business, which uses Return Path's electronic change-of-address service, offers an assortment of tools, guides and services designed to simplify the moving process for customers. In 2001, sales exceeded $1 million.

Anand Singh, director of corporate development at Moving.com, says the company sends out 6,000 e-mails each day to customers; they include everything from thank-you notes and follow-up messages to company newsletters. According to Singh, about 5 to 10 percent of them bounce back. Now that they use Return Path, Moving.com can update about 31 e-mail addresses per week.

Of course, you don't necessarily have to pay someone else to provide change-of-address services; you could put a "change-of-address" page on your Web site. But that means you're relying 100 percent on customers to notify you of e-mail address changes--and let's face it, how often is that going to happen?

Another approach is suggested by Chase. "If I had a mailing list of customers and was losing customers' e-mail addresses at an alarming rate," he says, "I would compile a list of lost e-mail addresses and then prepare a [snail-mail] piece that I can mail out to these customers in a timely fashion that says something like, 'You've changed your e-mail address; we'd like to get it back.'"

Sometimes, it seems, the tried-and-true traditional methods--such as good old direct mail--still work best at getting results.

Melissa Campanelli is a marketing and technology writer in Brooklyn, New York.

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Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at mcampanelli@earthlink.net.

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This article was originally published in the January 2002 print edition of Entrepreneur with the headline: When You <i>Really</i> Lose Customers.

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