Does your campaign use revenue sharing agreements? What about email list rentals? Email fundraising is an effective tool for political campaigns, but what exactly is the difference between revenue sharing agreements and email list rentals? Keep reading to find out.
There is a reason that email fundraising is thought to be king of the campaign. Email has proven to be an effective tool in both recruiting supporters and raising money for your campaign.
Making the effort to build an owned email list that turns supporters into donors through grassroots emails is a proven strategy that is successful and yields consistent results.
Although, while organically building a healthy email list is crucial, it takes a lot of time and effort. Sometimes you need to capitalize on email copy that is performing well or you may need an influx of new potential donors, so you look outside of your owned list to do so.
The few ways that campaigns use outside leads to generate more emails is through revenue sharing agreements (also known as “revshares”) and list rentals. Sending your fundraising emails to this outside list is a great way to meet your fundraising goals. It increases your chance to raise more money, because the bigger your list, the more you’ll raise.
Before you choose to rent a list or use a revshare, take a look at our breakdown of each below. We’ll walk through what you need to know about both of them and how they can help you reach your fundraising goals.
When renting an email list, you’re borrowing someone else’s audience for a price. Email list rentals can vary in price greatly depending on the size and quality of the emails on the list.
In this scenario, campaigns can use a standard list rental agreement, where you pay an upfront cost to send an email to the list. You gain a one time right to contact the email address, but the email list owner conducts the sending for you. By doing it this way, you don't own the lists.
It should be noted that an email rental is very different from an email list purchase. When you buy an email list, you take ownership of the email addresses you choose, and can use it as often as you like. Meanwhile, list rentals are only used for a single email campaign.
The upside to renting a list is that while you pay an upfront fee, you don’t have to pay anything else on top of that. So if the rented list is successful, you have the opportunity to raise more money. The cost is also significantly cheaper than purchasing a list and you guarantee that you only keep good emails that are interested in your campaign.
Typically, a rented list is used to acquire new donors to grow your “house file.” Your house file is your owned email list. If someone donates once from a rented list, they can then be emailed for free moving forward.
The obvious downside to a list rental is there are no guarantees of profit. You could spend $500 renting a list, but then raise less than $500 from the list. If you have the unfortunate situation where you rent a list from a less than reputable vendor, you could lose money on renting a list. This puts a lot of risk on you and very little risk on the company you’re renting the list from.
Renting an email list has been a key strategy for campaigns for a long time. But there is now the option to use the increasingly popular revshare agreement option to accomplish the same goals.
Revenue Sharing Agreement
While revenue sharing agreements (revshares) are similar to list rentals, the difference comes from the payments.
When entering into an agreement, every dollar you raise will be split along a percentage with some going to the campaign and some going to the list owner. So unlike the list rental where you pay a flat upfront fee, you pay nothing upfront for the use of a revshare. The funds raised are split between your campaign and the broker.
Let’s say your revshare was set to 40/60. Yes, you would only make 40% of the profit, but you are guaranteed to not have a loss in this circumstance. The 60% you do make might lead you to higher profits in the long run. Typically revenue share agreements can range from 50/50 to 10/90 depending on the strength of the list, amount of work done by the list rental company, and other factors.
There is no risk when entering into this agreement. If the email that is sent to the list doesn’t generate any donations, you have not lost any money. On the flipside, a low performing email on a list rental can cost you the amount you paid initially.
Also, if you have a successful campaign with a list rental company, you can always negotiate a different rate. One common agreement will be for the list rental company to receive 100% of the first amount raised, but then you will receive 100% of any dollar over that. This can work well if you expect to raise more than the percentage breakdown.
So they both work in the same way - the list owner still owns the email addresses and sends out your ad copy on your behalf. For both arrangements, it is in your best interest to set a landing page where you can capture the data and add them to your owned list.
Both are effective ways of growing your email list, prospecting for new donors, or raising funds when there is a lull in your donations. However, there is more security in the revshare agreement process for the campaign than what a list rental provides.
Ultimately, using a revshare agreement with a reputable organization that has a clean list of donors is the best way to achieve your fundraising goals with the lowest amount of risk to the campaign.
Want to get started with revshares? Contact us at email@example.com and we’ll help get you connected with a list rental company. We are set up to seamlessly split the money raised from revenue sharing campaigns!