Strategy

The Problem with Co-Registration Leads

By November 27, 2017 No Comments
The Problem with Co-Registration Leads

When you’re looking at list building options, co-registration (“co-reg”) is a very popular method of rapid list building. That being said, “fast” doesn’t mean good, so this post will help you understand some of the benefits and drawbacks of co-reg leads.

Basics of Co-Reg

Co-registration is short for “co-op” or “cooperative” meaning a shared opportunity between the participants. A company that has a subscriber registration path can offer to sell leads to co-registration brokerages who in turn sell those leads to buyers. The buyers offer a fixed amount they are willing to pay per lead, the co-reg brokerage marks up the price by 20-30% and numerous publishers try to fill the open orders for leads.  While in a perfect world, co-registration can work great, there are many flaws in it to be aware of.

#1:  Greed

Companies that specialize in brokering co-registration leads have to buy leads from many different publishers to fill their client’s demand. A large percentage of the publishers and co-reg brokers participating in the game are very hungry and will find creative (or purely bogus) ways to fill the demand. The result is a blend of real fresh leads (good) and old bogus ones sold to many different people (dangerous).

#2:  Ignorance

If human nature isn’t enough to scare you, throw in a dose of ignorance and it’s a recipe for disaster when talking about co-reg leads. Since the majority of buyers don’t have the technical systems or capability to track, measure, and terminate the worst sources and double-down on the best ones, they often fall victim to managing with a blend of lead quality that leaves a lot to be desired. While there are some good ones, most co-reg company sales people “act” like they can help, but the majority are the most technically inept group of people to ever sell digital services. They don’t really have the systems or technology to help clients get a great value.

#3:  Engagement

The biggest danger to co-reg is receiving uninterested subscribers who are automatically being added to your list. No matter what the co-reg sales person tells you, a large percentage of your order will be filled with complete garbage leads. They might even pass validation and be real people, but far too many of them will not even remember signing up for your list if they are even active at all. Many of them will end up on so many lists so fast that they will change email addresses or just become unresponsive.

#4:  Deliverability

The major ISPs such as Gmail, Yahoo and Hotmail can see these leads being mailed by so many others that they penalize the senders who are obviously buying crap leads which is generally frowned upon. If you don’t get directly penalized, your domain’s sender reputation will end up suffering for the simple fact that your engagement isn’t good enough to inbox.

#4:  Cost

When doing math on what co-reg really costs, you need to look at a few metrics. The only real value to your list is an ongoing clicker who makes you money. When compared to the cost of exclusive leads, you’ve got to heavily discount for the fact that so many other people will be marketing to these same poor people.

– A: Open Rates (20-40% is healthy)
– B: Welcome Email Clickers (15-25% is healthy)
– C: Cost-Per-Lead (prospects $.25 – 1.00)
– D: Cost-Per-Clicker (double opt-in readers $1.00 – $4.00)
– E: Revenue-Per-Clicker
– F: Ongoing Engagement Rates

The metrics above should be compared against the metrics from the gold standard of advertising for your own leads which you will exclusively own. We’ve done the math for you. Co-reg leads are worth about 1/4 of exclusive leads.

What’s the bottom line?

Earnware is able to generate exclusive leads for a lower cost-per-engaged clicker than the co-reg industry can consistently deliver. There’s no comparison. Sure, it takes a little work, creative, technology and set-up, but that’s what we do.

As always, if you’d like to discuss this topic further, feel free to connect.

Thanks for reading…

John Valenty

CEO
Skype: john.valenty
john(at)earnware.com
http://www.johnvalenty.com