Internet Special Report--E-mail Done Right (1,783 words)
Best Practices for this exploding medium
By Edward Fischer
Done right, e-mail marketing can bring you new customers and more revenue at a lower cost than ever before. Done wrong, it can generate virtually no response. Worse, it can alienate, confuse or anger your current customers.
About 536 billion e-mail messages were sent in the United States during 2000, according to New Century Communications. With about 100 million e-mail users in the United States, that comes to more than 5,000 messages per year, per person—or nearly 15 messages per user per day, every day of the year. Even if you're skeptical about the numbers, there can be no doubt that e-mail as a medium is exploding.
Jupiter Communications, the New York-based e-commerce research firm, says 65 percent of companies spend 1 percent to 5 percent of their total marketing budgets on e-mail marketing. An additional 22 percent of companies spend more than 5 percent.
At the 2001 Catalog Tech show held in New York City this year, Geoff Smith of ClickAction, a marketing consultancy specializing in online campaigns, in his presentation "E-Mail Marketing Done Right," highlighted what marketers should view as best practices for this still-developing industry. Smith, ClickAction's director of client programs, says a watershed of sorts recently was reached—there are now more e-mail addresses than phone numbers active in the world. Considering the head start that phones have had, this is quite an achievement—and a clear sign that there are terrific new opportunities for marketers.
What successful e-mail strategies are marketers employing these days? Following are some highlights.
Data mining from all sources
As companies try to get closer to their customers, they're working harder to integrate data from myriad sources, including brick-and-mortar retail locations, call centers, and e-commerce inquiries and transactions. Smith thinks that integration is an important prerequisite for making e-mail campaigns successful. Some e-tailers are investing in specialized software that links disparate databases for even better segmentation and targeting. Some CRM (customer relationship management) software vendors now include e-mail and Web channel management tools in their offerings.
Segmentation by channel can save money, too. Gay Men's Health Crisis, a New York-based non-profit organization, saved more than $5,000 in fund-raising costs this year when it sent one-third of its AIDS Walk recruitment packages by e-mail instead of direct mail.
Some firms use national database services to obtain their customers' e-mail addresses (along with opt-in preferences); others simply ask for customers' information at various touchpoints.
Smith says it's important to make your e-mail distinctive to avoid being lost in the clutter. Some retailers apparently agree.
Underwear manufacturer Hanes calls its e-mail alert service "Shopper's Scoop." The periodic e-mails include information about promotions, specials and new products.
Similarly, The Boston Museum of Fine Arts offers "MFA Mail," sending its Web site visitors periodic updates about happenings at the museum.
Video chain Blockbuster offers an e-mail subscription service called Blockbuster Update, designed to keep visitors updated on the newest releases. Subscribers denote whether they're interested in VHS, DVD, video games or all three. Blockbuster Update also delivers the chain's latest list of "Guaranteed In Stock" popular titles, and makes genre-specific recommendations depending on whether the subscriber has asked for family, drama, comedy and/or action titles.
Mingling info and promo content
Savvy marketers know it's not enough to just keep blowing their own horns—a truism even more pertinent in the e-mail channel, where bored recipients can delete messages without ever reading them. Worse for a marketer, customers may choose to block all of a sender's messages using the "junk filter" or "kill file" that most e-mail services offer.
Smith has some suggestions to keep readers engaged. First, keep the ads relevant. The Boston Museum of Fine Arts' MFA Mail does this by asking each requester to indicate his or her categories of interest, such as gallery exhibits, film series, speaker programs, children's resources, shopping and dining. Each e-mail then is tailored to the requester's specific interests.
Alternatively, says Smith, make some of your messages "info only." Let the recipient feel there's some real value in your stream of e-mails.
One thing that's important, Smith continues, is to keep the structure of your e-mails consistent. If you send periodic messages that contain promotions, news and third-party ads, keep those items in the same order every time you send a message. Not every e-mail needs to contain every item, but you'll want your recipients to become familiar with the layout of your messages.
offers, reminders and customized services
There are many other opportunities for using e-mail in your marketing and promotions, says Smith.
For example, one leading clothing cataloger ran a seven-day sale. A day before the sale's end, the company sent e-mail reminders to customers that the sale was in its final day. According to Smith, that strategy resulted in an enormous spike in response on the final sale day.
Franklin Covey, a retailer of day planners and seminars, offers an e-mail reminder service. From its Web site, customers can sign up to be reminded about anniversaries, birthdays and other events, with whatever degree of advance notification they choose. Not only is the company providing a valuable service to customers, it's also cementing its position as a provider of multiple solutions to help customers organize their lives.
One marketer of office supplies tracks how many toner cartridges its customers order, and when they'll need to reorder. Then, using fairly simple software, the company sends timely messages to customers when it's their time to reorder.
Address Online buying deterrents
Surveys show that potential buyers have many worries when shopping online. One survey last year by Greenfield Online listed the deterrents that bothered the highest percentages of people:
n shipping charges (53 percent);
n can't see and touch items (51 percent);
n can't return items easily (49 percent); and
n credit card security fears (47 percent).
Each of these deterrents deals with fears that must be addressed by your online offers.
Smith cites the Web site of clothing retailer The Gap, which begins, "200 reasons to get Gap pants ..." Reasons No. 1 and 2 are free shipping and hassle-free returns. That, says Smith, addresses online shoppers' fears in a positive way. (Reasons 3 to 200? The Gap's selection of styles.)
Feedback is key
E-mail marketing experts agree on one thing: Evaluate your campaigns promptly. Unlike traditional direct marketing, e-mail marketing generates most of its responses within a couple of days. (One exception is business-to-business e-mail marketing, which tends to have longer response times.) You'll begin to get your first responses within minutes. That means your fulfillment process must be rarin' to go and ready for a possible deluge.
Speaking of timing, don't forget to set your campaign clock to "Internet time." One magazine publisher discovered that an e-mail campaign prompting subscribers to give holiday gift subscriptions didn't work very well in October, the traditional time for that type of direct marketing. A second campaign closer to Christmas worked far better.
What should you measure besides the response rate? One thing is the "unsubscribe" rate. Since you're presumably using only opt-in addresses, a high rate of cancellations may indicate that your messages are too frequent, too confusing or too hard-sell. Long creative copy that works in direct mail may not work in an e-mail; people don't want to spend much time reading e-mails on their screens.
And finally, don't forget to subscribe to your own e-mail campaigns. It'll help you see the message from your customers' view points, and it may warn you about technical errors—such as the one encountered by a company that sent thousands of "personalized" e-mail messages, each one beginning, "Dear first name." Yikes!
Affiliate Marketing Is Old Hat. So Now What?
By Jeff Molander
Affiliate marketing is old hat and limits an online marketer's true potential. There. I said it (and my in-box will probably pay dearly!). Seriously, has anyone bothered to check the return on investment (ROI) of traditional online affiliate marketing programs lately? I have.
So far, most marketers remain tight-lipped in terms of actual sales revenues or customers acquired. However, many are beginning to reveal the ugly truth about performance-based strategies that rely exclusively on affiliate programs. Most indicate that returns are low with few affiliates delivering significant activity (in terms of sales, customers or actions).
If affiliate marketing isn't our path to customer acquisition utopia, then what is? Before we explore that answer, let's briefly look at why the affiliate approach has yielded so little for so many-—as evidenced by the lack of attention being given to these programs.
As a group, online marketers generally have not mustered adequate human resources to grow and properly manage affiliate relationships. Secondly, we tend to cling to the notion that a superior tracking/reporting technology tool and a large number of affiliates are the keys to success. Finally, marketers are not approaching performance marketing with an integrated mind-set; rather, affiliate networks (generally comprised of smaller "homesteader-type" sites) are the main tool of choice.
Although performance marketing is a simple, clean model, analysts report that ROI has been elusive. Why? A majority of marketers are "plugging into" a third-party network of sites via a technology provider and, in effect, walking away. This is what we've come to know as an affiliate program. Since resources are scarce and we're all moving at light speed, little or no attention is being given to day-to-day operational concerns. Marketers are running programs with one person at the helm and relying on the technology to do the work (which it cannot). Little or no time is spent identifying and nurturing highly relevant, profitable affiliates … providing them with merchandising guidance, incentives, etc.
In the end, affiliate programs are placing marketers in a dangerous reactive stance wherein they are using mass communication techniques (e-mail) to generate interest among teems of small sites. The resulting flow of inbound affiliate applications may, ultimately, not be worth the time investment (from an ROI perspective) to cozy up with the majority of smaller sites.
Is affiliate marketing evil or just not worth the effort? Neither. Marketers must dedicate skilled resources to such programs—culling affiliates and actively merchandising through the channel—to boost ROI. The number of affiliates and whiz-bang technology mean nothing. Think qualitatively, not quantitatively, and zero in on Web properties that drive transactions. Dedicating and focusing resources does work—as evidenced by those success stories we occasionally hear at conferences wherein 20 percent of a marketer's total sales are generated through performance marketing.
Jeff Molander is president of Molander & Associates Inc., a consulting company focused on helping multi-channel marketers build performance-based and collaborative commerce strategies. He can be reached at email@example.com.