Introduction to Email marketing (Part 1)

How significant is e-mail marketing?

If we consider the adoption and characteristics of e-mail, we soon see that exploiting e-mail as a customer communication tool is a key aspect of e-marketing. The Office of National Statistic’s excellent Internet Access report shows that, for the UK, using e-mail is one of the Internet’s ‘killer applications’ with 71% of users accessing e-mail compared to only 35% using it for it purchasing. Globally, around four billion e-mail messages are sent daily, not to mention 300 million SMS messages.

The impact of e-mail on the modern organisation is significant. Dell Computer achieves more than $1 million in revenue per week through e-mail marketing campaigns according to the Iconocast newsletter. Each month in 2000, Dell received 50,000 e-mail messages and 100,000 order-status-requests.
E-mail = Push, Web = Pull

For the e-marketer, e-mail offers many advantages as a communications tool – it offers immediacy, targeting, accountability and is relatively cheap. Perhaps its key advantage is that unlike the web site it is a push communication tool. A key limitation of web site marketing is the pull medium – visitors will only arrive when it enters their mind to visit the site, typically through typing in a URL in response to an offline stimulus or following a hyperlink. In contrast, e-mail provides a push mechanism. The marketer can devise appropriate copy to deliver targeted messages to selected customers or prospects. The message arrives in the recipient’s inbox and it can’t be ignored – the message header must be read – even if the decision is to delete the e-mail.

But what about the problems? Well, they undeniably exist. Managing lists, getting the creative right, response rates and privacy top the list – as they do for conventional direct marketing. In this article, we review approaches for effective e-mail marketing that minimise these problems.

A CRM-based e-mail marketing strategy

An effective way to formulate an e-mail marketing strategy is to apply it to achieving our customer lifecycle objectives. Questions to ask include:

• Selection – who are our ideal customers segments we should target? Can we use an existing database to profile customers? Which offers and creative should we use for different segments?
• Acquisition – How do we build a list of new prospects using the web site? How can we use e-mail in conjunction with other techniques to help convert prospects to customers?
• Retention – How can we manage inbound e-mail service quality to increase customer loyalty?
• Extension – How can direct e-mail campaigns be used to extend the range and depth of products and services used by customers?

E-mail capture best practice

To acquire new leads and collect data about existing customers, follow the checklist below to maximise the number of e-mails captured to build a house list.

1. Make capture of visitor e-mail and profiles a key web site objective for both new and existing customers. We will explore some of the techniques to make this a reality below.

2. Use offline techniques to help build an e-mail list of existing customers. Ask yourself what percentage of your customers you have valid e-mail addresses for.

3. Offer an incentive relevant to the audience. This is a tenet of permission marketing. An enticing incentive is offered and in return, the customer gives up their time to provide some personal information and agrees to receive further information. The classic exchange is based on information or entertainment – for example a B2B site can offer a free market report while a B2C site can offer a screensaver or game.

4. Use an opt-in approach. This is also permission marketing and now essential in privacy law in most countries. Visitors proactively check a box on a web form to indicate that they agree to receive further communications from a company. This is preferable to opt-out, where a customer may not have consciously agreed to receive further information. In some cases such as when you will be renting a list to third-parties, a ‘double opt-in’ or a second confirmation is appropriate.

5. Explain why information is being collected. A customer will more readily give up their time and information if they know why it is being collected and how it may benefit them.

6. Keep information requested to a minimum. The bare minimum is the e-mail address, but product preferences, profile and contact details are typical. For existing customers, integrate with existing data; don’t ask more than once or use ‘drip irrigation’ to collect different data from different contacts.

7. Provide a privacy statement. This should explain that the data will not be shared with a third party and can increase e-mail capture rate.

8. Indicate mandatory fields. These are fields it is essential the customer fills in such as e-mail address and postcode.

9. Validate completion of form. Accuracy of information such as e-mail addresses and postcodes is again important, so perform a check on the fields in the form and prompt visitors to make amendments.

10. Provide prompt confirmation. After a visitor has filled in a form, a company should start the dialogue using an autoresponder to acknowledge receipt and describe follow-up actions.

This opt-in approach to capture e-mail direct from customers and web site visitor to build a house list is the approach favoured by many companies, but remember that options for renting lists are increasing. Many traditional direct marketing list vendors such as magazine publishers now offer opt-in e-mails lists.
SPAM

No discussion of e-mail marketing is complete without reference to SPAM, formerly referring to spiced ham, but now more likely to mean ‘Sending Persistent Annoying E-mail’. The negative perception of e-mail derives from the many unsolicited e-mails we have all received from unscrupulous ‘get rich quick merchants’. The spammers rely on sending out millions of e-mails in the hope that even if there is only a 0.01% response they may make some money. My favourite? $25 dollars a bottle for authentic holy water from the United States.

Fortunately research shows that most consumers can readily distinguish permission marketing from SPAM. A 1999 IMT survey showed that 59% of users delete SPAM without reading it compared to only 6% for permission e-mail.
Direct e-mail best practice

As with any direct marketing campaign the results are mainly determined by the offer, targeting, creative and timing. Spot these within these tips for effective e-mail campaigns:

1. Review the full range of options for the type of outbound e-mail and integrate them into the communications mix. Options include:

• Regular newsletter e-mail to keep customers informed about industry, company or product news.
• Multi-stage e-mail to encourage conversion after a product trial.
• E-mail discussion list, perhaps about product support.
• Special event e-mail alerts tied into a particular event such as a new product launch or a trade show.
• Viral e-mails (to be covered in a future article of WNIM), for example, customers are encouraged to enter the e-mail of a friend or colleague to forward information or entertainment to them
• Small Message Service (SMS) text messages can be used in a similar way to standard e-mail for a direct response approach.

2. Select the appropriate frequency. Options include

• Regular newsletter type. For example, daily, weekly, monthly. Let customers choose the frequency.
• Event-related. These tend to be less regular, but give a higher impact. They are sent out perhaps every 3 or 6 months when there is news of a new product launch or an exceptional offer.
• Multi-stage messaging is one of the most exciting applications of e-mail which can be deployed according to different events on site, for example after subscription to a trial version of an online magazine, e-mails will be sent out at 3, 10, 25 and 28 days to encourage a subscription before the trial lapses.

3. Choose the optimum time. This may be time of year, month week or even day. For example a monthly offer or newsletter may be best on a regular date such as the first of the month. Response rates may differ through the week, for example a Monday AM B2B mailing is likely to have a lower response than a Wednesday PM mailing.

4. Ensure e-mail communications are relevant and targeted. As for any direct marketing effort the offer and creative must be of interest to the recipient.

5. Personalise. Offer Choice. Refer to the customer by name, where possible tailor for their preferences (e.g. type of content, frequency, HTML or plain text) or use mass customisation to give specific offers to different segments based on their past behaviour.

6. Consider web response. Here the power of e-mail and the web are integrated. The web page is used as a direct response to the e-mail offer in the same way a TV ad provides a freephone number as a call-to-action. Web response can use a single page for all respondents or for each segments or it can be personalised. A PIN or a user name and password can be used to identify respondents.

7. Be distinctive. Be the best. Research other e-mail offerings in your sector carefully and aim to better them. There are now tens of thousands of e-mail newsletters and other forms of opt in e-mail. Make sure your offering stands-out.

8. Respect opt-out. The procedure for opt-out or unsubscribe should be explained at the base of the message, and it should work. Privacy policy should be explained. Stay within the law, for example different regulations apply to minors.

9. Test. The mantra of direct marketing. Test. Test. Test. This medium is well suited to testing. How do you test?

10. Tracking. Plan to measure response / clickthrough rates and conversion to follow up actions such as sales.
E-mail creative

Designing a direct e-mail requires just as much care as designing a mailer and many similar principles apply. Effective e-mail should:

• Grab attention in subject line and body. Don’t leave the best to last.
• For newsletters use a standard header, but highlight specific content each month. Run articles over several months to maintain interest.
• Be relevant to target.
• Be brief, but contain sufficient information to be of interest as a standalone communication.
• Hyperlink to web site for more detailed content
• Be personalised – Not Dear Valued Customer, but Dear Ms Smith.
• Have clear call-to-action.
• Tested for effectiveness
• Provide an opt-out or unsubscribe option that works.
• Operate within legal and ethical constraints of a country

Achieving an eye-catching e-mail is difficult using a plain text e-mail. For greater impact and branding, many are turning to HTML mail. But there are many pitfalls in using HTML mail that may result in customers not being able to read your message. Use with care and ensure your mailing house tests for the full range of e-mail reader software – e-mails can be coded to display either HTML or text according to the capability of the reader. Ideally, give subscribers a choice of e-mail or plain text. For the future broad-band Internet expect rich media e-mails using audio and Flash.
Managing lists

Finally, remember that a carefully managed e-mail list can be a great asset, but it can soon turn into a liability as it ages. Responses rates will fall, bounces will increase and customer preferences will change. Use all customer contacts as an opportunity to keep the list up-to-date. Data protection law requires the facility for customers to update their details.
Summary

To summarise, e-mail is an effective online push communications method. It is essential that e-mail is opt-in, otherwise it is SPAM. Experiment and test to achieve the best creative and frequency. Work hard on e-mail design and maintaining up-to date lists. Stay within the law.

Email marketing links

E-Mail Experience Council (http://www.emailexperience.org)

Dave Chaffey's latest postings on email marketing (http://www.davechaffey.com/Total-E-mail-Marketing)

Total Email Marketing book

Note: This article is one of a series originally written between 2000 and 2003 for The Chartered Institute of Marketing What's New in Marketing Newsletter. Many of the concepts remain valid, but some more recent concepts such as Web 2.0 and social networks aren't referenced.

For the latest on these concepts search my DaveChaffey.com blog site for Email marketing articles.