In January, the news that 1.9 million attbi.com addresses were
converting to comcast.net brought a collective groan from broadcast
list owners. (Note: See below for an update on Comcast.)

That figure is *insignificant* when compared to the number of
email addresses potentially affected by the (largely unreported)
changes in the no-cost web-based email sector.

If you have a consumer-oriented list, it is not unusual for up to 70%
of your addresses to be from no-cost email services, especially if
you target students, young people or lower income groups. Even
business-lists generally have at least 15% of names from no-cost
services.

Hotmail is the most famous of these no-cost services, with more
than 100 million accounts. However, you may not be aware that more
than 50 million more names that might be on your lists are no-cost
mailboxes provided by back-end suppliers such as Everyone.net,
MailCentro, and Outblaze which power accounts spread over thousands
of domains and sites.

For example, among its many accounts MailCentro powers almost two
million no-cost email accounts consumers use at the Care2.com site.

Which would not be a problem, except developments in that industry
mean you can expect an acceleration in the growth of:

- Dead addresses
- Mails directed to bulk folders, never to be read
- Bounces from overfilled mailboxes
- Older messages disappearing from inboxes

Which makes scary reading, especially when the latest reports
already indicate annual email churn rates of 30% and up.

We spoke with industry expert Edwin Hayward of emailaddresses.com
to get some insight into what is happening, why you should be
worried, and what you can do about it.

According to Hayward, we are just beginning year three of a
continuing shakeout in the no-cost email world. He has bad news
for those who thought the major changes were in the past:

"Things will change quickly, and things will only get worse."

Here are the three major trends affecting your lists:

Trend #1. Shutdowns

The first big player service shutdown was Visto.com back in
December 2001, affecting more than 2.5 million users. The
process is continuing, with, for example, iVillage closing its no-
cost email services later this month (though mails can be forwarded
for a year).

Some services are just plain bankrupt. Other companies offering
no-cost email as an add-on service are doing the math and
discovering there is not a big enough upside to continuing a
service.

Hayward says, "A lot of companies thought 'Hey, it's return
traffic, another ad venue, and gets your brand in front of
people.'" The predicted ad revenues have rarely materialized
and the branding argument wears thin when users start sending out
the nastier forms of UCE.

When a service dies, you can normally (but not always) expect your
mails to that domain to bounce. While you will lose those
addresses, at least you can keep your list clean.


Trend #2. Switch to paid only

Email account providers are jumping on the paid bandwagon and
switching to paid-only or taking a two-tier approach, with both no-
cost and for-fee alternatives.

In the former case, Hayward says typically less than 5% of users
switch to the paid service. The remaining 95% lose their accounts.
Unlike with a shutdown though, he says it is rare for incoming mail
to those accounts to start bouncing immediately.

Many services hold the accounts "hostage" for anything up to a few
months, hoping to entice former users to cough up for the paid
service and get access to their old emails, address books etc.

Which means your messages to those accounts get through as normal,
but the recipient can not even access the mailbox they are sitting in.

Hayward says, "If they're not major services, and thus relatively
spam filtered, and they have 10MB email accounts, they could live
on for months and months like twitching corpses. Mail is just going
unread and you'd never know why."


Trend# 3. Switch to two tier services

The situation is more complicated with the switch to two tier
services, as practiced by the likes of Hotmail.

Instead of just offering more features with paid options, many such
services gradually reduce the facilities available through the no-
cost option, hoping to put pressure on users to switch to paid.

Hayward says the commonest tactic is to cut the amount of email
storage space offered, often quite drastically. This month, for
example, SoftHome cut storage space offered to their no-cost
accounts from 15MB and 500 messages to 6MB and 150 messages.

Once a mailbox is full, new messages bounce or the oldest messages
are deleted to make space for the newest.

It is not just an issue of more bounces. If users are worried
about staying within storage or bandwidth limits, then the first
thing they do is cut down on list subscriptions, or quickly delete
items they previously might have saved to read later.

What can you do to deal with these issues? Here are our top 10
recommended steps for you to take immediately:


Step #1: Check your exposure

According to Hayward, "People are vastly underestimating the
proportion of no-cost email addresses in their databases."

He says it is not enough to count the number of Hotmail and Yahoo
addresses. There are hundreds of free email services, many offering
users a choice of address domain names; "Very few people realize
how many seemingly premium-looking email addresses are actually
free email."

Instead, take a representative random sample of your list and
manually check on the domain names to find out how many are no-cost
email addresses.


Step #2: Prepare for the worst-case scenario

Once you know how exposed you are to no-cost email addresses, you
can ratchet down your performance expectations accordingly.

If a substantial proportion of your database comes from one no-cost
email service, Hayward suggests budgeting for the possibility that
you might lose up to 95% of that group if the service converts to
fee-only. (Yes, people may update their address details, but not
nearly as often as marketers would like.)


Step #3: Monitor the key domains

Once you know which no-cost email services are important to your
list, open accounts there yourself. That way you will get advance
warning of service changes that impact your business. (It is also a
good way of checking whether you're making it through spam
filters.)

Hayward's site visitors also contribute to a no-cost email RIP
list, which gives advance notice of service shutdowns and moves to
fee-only (see below for link).


Step #4: Segment by domain

With this insider knowledge, you can take preventive action.

For example, if you know a service is closing down, you can split
off the relevant domain names in your next mailing and add a
message reminding recipients they will need to change address if they
want to continue getting your email.

If a service curtails storage space or bandwidth allowance,
consider filtering on the relevant domain name(s) and sending those
addresses lighter mailings, without of kb-heavy images or
multimedia files.

A smaller message means you're more likely to get into the mailbox,
and less likely to get dumped for hogging precious space.


Step #5: Do not let your host or software run on autopilot

Do not rely on list software or broadcast service to always make the
right decisions for your list. For example, it can take users a
while to adjust to a downgrade in features, particularly if they
do not check their accounts too often.

Depending on the quality of the bounce reporting and how your
list host deals with them, you may find a sudden rush of automatic
unsubscribes, when actually it was just people who have not yet
adjusted to the new limits on their email account.

In such cases, you might keep the addresses alive longer than
otherwise.


Step #6: Do not rely on people keeping welcome messages

With storage space shrinking, it is very unlikely that people will
still have your welcome messages. If they contain vital information
(such as passwords or customer account data), make sure these are
accessible elsewhere too, for example through a "forgotten your
password?" function.


Step #7: Be careful about filtering out no-cost email domains

Some lists filter out sign-ups from no-cost email addresses to
force people to use a more list-friendly address.

Be careful. When a service goes for-fee, those who pay still keep
the same addresses. If you continue to treat them like no-cost
address trash, you are putting a barrier up to those who have
demonstrated a willingness to pay for products online, potentially
your best customers.


Step #8: Encourage people to give out a safe address

Ironically, no-cost email address grew in popularity because of
their permanency, no need to change your email address when you
move jobs or ISPs.

If you want people to hand over their safest address (the one
they are most likely to retain and the one they most protect from
exposure) give them every reason to trust you. Put clear privacy
commitments right next to the sign-up forms.

In addition, instead of simply requesting an email address, ask
names joining your list for their "Primary Email Address." This
tiny change in wording on your forms may help you get addresses
that are more likely to be checked frequently and rarely changed.

(Note: If you run a business list, you should instead request "Your
Work Email Address," it is something we have tested here at
MarketingSherpa with outstanding success.)

If your email communications are critical for the consumer (think
account statements), consider asking for a second email address as
back-up.


Step #9: Deliver more value

When people lose their addresses, few take the trouble to update
their website registrations and mailing list subscriptions
accordingly. The more value you deliver with your account
service or emails, the more likely they are to do so.


Step #10 Make address changes easier

Surprisingly, most list owners make it far easier to get off a list
than it is to change ones address on a list. Consumers do not want
to go to the bother of getting off and then starting a new account
with their new address.

Make this a one-click option from anywhere in your site. And,
unless you have a darned good reason (i.e. you are PayPal), do not
require a password to get in. Barriers like passwords can reduce
your usability dramatically.

If you operate multiple lists, perhaps sales alerts and a
newsletter, then make sure people can change all their
subscriptions at the same link. To see an example of this in
action, check out our own publisher's Manage Subscriptions Form
here: http://www.marketingsherpa.com/subscriptionManage.cfm

Links mentioned in this article:
http://www.emailaddresses.com/email_rip.htm
http://www.everyone.net/
http://www.outblaze.com/
http://www.mailcentro.com

Update on Comcast's @attbi names transition:
http://www.b2bmarketingbiz.com/sample.cfm?contentID=228