Inbound Marketing Blog

19 October, 2016

How to Avoid Unnecessary Overspend on Contacts

Written by Josh Mason

on 19 October, 2016

The more contacts the better right?

More contacts means more opportunities to sell and ultimately more revenue in the long run.

It’s a no brainer surely?

Well, not exactly.  

If you’re an enterprise HubSpot user you’re charged £7 per 1000 new contacts each month, if you’re a pro user it’s £35 and for basic users it’s £70.

While this may seem like a pretty insignificant amount of money, if you’ve got poor quality data within your database you could be looking at thousands of pounds needlessly coming off your bottom line every single year.

Also, if you’re a small to medium sized business and you’re trying to identify areas where you can make savings, your contact list isn’t often the first place you’d think to look.  

So why is this happening and how can you make sure to avoid it?   

The Problem - Bad Data Management

The reason that you can start overspending on your contact list is down to something quite simple, a lack of organisation and structure.

Now this lack of organisation can come in many different forms, however it all boils down to having contacts in your list that simply shouldn’t be there.

Having a large contact list is great, but only if they’re all people that you can sell to.

Otherwise you’re just chasing vanity metrics and pouring money straight down the drain.

You need to be disciplined enough with yourself to question where the data came from and if it’s genuinely a good contact that you’re about to put into the system.  

If you had to incrementally pay more money for the number of people you followed on twitter, people would probably be a bit more selective with who they followed right?

It shouldn’t be any different with your contact list.  

I’ve heard people who have set goals of increasing their email list to 100,000 by the end of the year.

But is that a sensible goal?

Wouldn’t you be better of optimising your email list so that you’re reaching the right people at the right time?

Especially when the average email list dies by 25% each year. If a good chunk of that 25% were good contacts then you don’t want to be left with a load of deadwood to try and sell to.

So it’s important that you tend to your contact list on a regular basis rather than checking it once a year.  

The Solution - Create a Process

The first step towards not overspending on your contact list is to create a clear set of guidelines for regulating your import data.

Think of it like having a set of in-house style guidelines for your content, it’s all about quality control and consistency.

That way, regardless of who in your team is adding a contact into the database, they know the procedure.

Everyone will know what qualifies as a contact worth putting in the system, they’ll use the same naming conventions and everything in general can be kept as neat and tidy as possible.

Once you have these guidelines in place there are still certain aspects of your contacts that you need to keep on top of. For example it’s important that you keep on top of your opt outs. If someone opts out then they don’t count towards your contacts, so you need to make sure that irrelevant data isn’t clogging up your database.

Other things to keep on top of are hard bouncing and defunkt emails within your database, all these will do is hurt your sender reputation.

Just think of it like keeping your kitchen tidy, if you neglect it for too long when you finally get round to doing a clean up it’s going to be a mammoth task.

So it’s best to get into the habit of regularly cleansing your email list as you go.

While I appreciate that this all sounds very boring, what starts as one or two emails can easily end up as thousands and that’s when it can develop into a problem

Is this really goodbye? - Knowing when to remove a contact

So if a contact hasn’t hard bounced, opted out or sent you an abusive email, does that mean they’re a contact worth hanging on to?

Not necessarily.

The best thing to do in this scenario is to run a re engagement campaign where you contact all of your contacts who have gone cold and find out whether they’re still active or interested in the services you’re offering.

This way you can’t get carried away with your list spring clean and accidentally remove a bunch of contacts who had the potential to become customers.

Your contact list is one of your most valuable assets. Taking pride in it doesn’t just mean growing it to be as large as possible, it’s about maintaining it’s quality and optimising it for both you and the customer's benefit.

So, treat your contact database the same way as you’d treat your home and you can patch up any needless leaks in your bottom line.

Topics: HubSpot Solution Contacts Money Budgeting