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By Christopher Kenton A Spam Law That Slams Small Business New legislation in California won't hinder offshore operators and professional e-mail pests. What it will do is hobble startups and reputable marketers Recently, California's legislature made headlines by creating the toughest antispam law in the country. The new measure, which takes affect in January, makes it a crime to send any unsolicited commercial e-mail from, or to, any e-mail account accessed from or billed to a California address. If you're like me, and you get 100 spam messages or more every day, that may be cause for a cheer. Finally, someone is sticking it to the spammers! Or so it seems. When you scratch below the surface of California's new law, you see a lot of fodder for scoring points with annoyed voters (Look, we're doing something!), and some provisions to avoid ruffling the feathers of some of the biggest e-mail providers like Microsoft. What you don't see is any hope for stemming the flood of unsolicited e-mail. First of all, the law is so vaguely written that it will be tied up in the courts from the first moment it's applied. Second, spammers are increasingly benefiting from technology that makes it virtually impossible to uncover their tracks. Third, spammers also benefit from global reach, operating from countries that don't care about California law (see BW Online, 10/30/03, "Needed: A Beefier CAN-SPAM Bill"). SPAMMERS ARE LAUGHING. What's worse -- far worse -- is that this new law is a direct attack on the viability of small businesses to the benefit of big businesses. While the new law claims to be targeted at reducing the high cost of dealing with spam, the consequences will be a significant increase in the cost of doing business, with no reduction in spam. The legislators who created the law will say this is all nonsense. But when I broached this issue to state Sen. Kevin Murray (D-Los Angeles) his representation of how small businesses really work didn't inspire confidence, as you'll see in a moment. As a marketing agency serving the high-tech industry, we frequently work with startups and small businesses. One of the most important services we provide to these companies is assistance with lead generation -- the process of identifying and attracting qualified buyers for the company's products. Lead-generation programs are based on a simple business concept: spend the least amount of money to find the most likely potential buyers at the point they are ready to buy. Sounds easy enough. But with all of the options for reaching out to prospective buyers, including multiple channels of advertising, trade shows, public relations, co-marketing arrangements, seminars, and direct-response marketing, businesses have to make smart choices about how to spend limited funds to ensure results. For small businesses and startups, this is often a do-or-die proposition. But it's not a crap shoot. PROFESSIONAL STANDARDS. There are some very specific criteria we use for selecting lead-generation options. They include, among other things, the degree to which a channel represents a specific community with known characteristics; the accuracy with which traffic coming through a channel can be measured; the average time it takes for a channel's participants to respond, along with the average number of responses; and of course the cost for reaching each prospect in a given channel. To put this in context, consider one of our typical lead-generation engagements. Recently, we were hired by a venture-backed software startup that was under the gun to generate 15 new customers within six months. One of their critical backers was threatening to pull out if they couldn't meet performance targets. Unfortunately, their product was still in the middle of trials, their sales force was just being assembled, and the software carried a high price tag -- more than $100k for an initial sale. Consider the outfit's dilemma. In order to sell an expensive product they need to reach a high-level executive with the power to make buying decisions, with a predictable set of problems that the product was designed to address, with the technological sophistication to understand the value of the product without seeing a long list of existing case studies, and with the vision to understand how an unproven product could provide a business advantage worthy of the investment. DEEPLY MISGUIDED. How on earth could they generate leads that would reliably net a predictable number of paying customers in only six months? Advertising on TV or radio? How many TV or radio stations do you know that are specific to technology, and can target executives in specific jobs? Maybe public relations. But getting a good buzz out in the right journals takes months, and the response is not immediately predictable. Trade shows are a good option for many businesses, but a new company will spend too much time telling its general business story and competing with a circus of sights and sounds, without being able to quickly qualify prospects and tactfully turn away tire-kickers. Targeted magazine ads are a great option, but the frequency of publication, the response time and response rate from readers, and competition for attention from other content would likely guarantee only a trickle of leads over months. Web advertising is improving, but saturating a very narrowly defined segment with more than just a brand impression takes a lot of time and effort without a high rate of return. There are of course, many other options. But the most effective option available to this company, and to thousands of other small businesses and startups like it, has just been outlawed in California, under the mistaken notion that all unsolicited e-mail is spam. It's not, and I'll demonstrate why. To ensure that our client met their financial targets, we developed a direct response e-mail campaign. We carefully profiled our prospective customer and identified 10 trade journals that focus content on that customer profile. We worked with representatives of each magazine to draw a small sample of qualified names from their subscription database, to whom we sent our first e-mail test campaign. The response to that test allowed us to refine our message and narrow our field of journals to four. CRUCIAL DISTINCTION. Next we spoke to the editors of those four magazines in order to understand the current issues facing their readers, and how those issues are addressed in the magazine's editorial. We developed a white paper to match the value proposition of our client's product to our prospect's needs, along with a short demo highlighting the product's functionality. Then we set to work on the full campaign, delivering staggered sets of e-mail in order to continually test and refine our program and improve results. In our final stage, we made a package purchase from the best performing journals, coordinating an e-mail campaign with newsletter, Web, and magazine ads to bolster the company's brand presence.
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