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Targeted E-mail: From Spam to Choice, Part 2

  |  January 29, 2003   |  Comments

Organizations that see e-mail as yet another broadcast and blast medium miss its unique ability to help establish a one-to-one relationship with customers. This week, Bruce McCracken reviews some fundamental strategic principles that can increase sales and enhance rapport with your customers through personalized communication.

By Bruce McCracken, Business Writer

While permission-based targeted email is proving to be a viable marketing tool, there are problems in executing a successful campaign. Marketing may be adept at print advertising and direct mail, but this acumen does not necessarily translate well in the new medium. But the medium is being studied and lessons are being learned as to what works and what leads to a successful campaign. Following some fundamental strategic principles can increase sales and enhance rapport with the customers through personalized communication.

Seeing the Forest Through the Trees
Initially email marketing was seen as a low cost method of reaching new prospects. Perhaps as an extension of the fallacy that cyberspace would become the end all/be all of marketing, email was a cheap blast implemented to produce results not unlike fishing with hand grenades.

Bill Nussey, CEO for Silverpop, an email solutions provider headquartered in Atlanta, explains that organizations need to view their targeted email campaigns with strategic vision. "Two years ago when email marketing took off, it was an inquisitive tool, a new way to find customers. Everything was valued on cost. The problem is that if you have moved away from customer acquisition and more towards customer retention and communication, you have to measure more than the ROI and click through rates."

David Ferris, president, research analyst of Ferris Research of San Francisco adds that marketing in many organizations may be effective in print, but not in email. "Many organizations are not nearly as effective and there is a lot of growing up to do."

Kevin Scott senior analyst for AMR Research of Boston explains how the communication process with the customer should be perceived. "Somewhere in the rush to the inbox, marketers have lost the basic concepts that made them successful. Open up any email system today and you will see the starting point and ending point of each interaction. In the future, a glimpse under the hood should reveal a revolving cycle of multiple interactions with no defined starting or ending point."

Al DiGuido, CEO of email communications provider Bigfoot Interactive of New York, agrees. "With recipients being inundated with all types of messaging, they are setting up personal filters that allow only those emails to pass through that speak directly to their specific needs and preferences. Organizations that craft messaging that truly addresses these needs and also uses customer information to be more contextually relevant will succeed in building mutually beneficial customer-client relationships. But those organizations that see email as yet another broadcast and blast medium miss email’s unique opportunity to establish a one to one relationship with their customers."

With an eye on strengthening relationships with existing customers as opposed to fishing for new ones, the best list a company can have is made up of its own customers. Nussey explains, "Companies are going to get a lot smarter about collecting their prospect and customer email lists. Having your own list not only gives more control but also is one tenth to one twentieth of the cost. Our benchmark for our clients is that 90% of the targeted email messages should be read."

Practice Good Hygiene
Cleansing the list regularly to keep it valid and up to date is extremely important. Failure to do so wastes resources on undeliverable mail also known as daemons or bounce backs. In its "DoubleClick Q3 E-mail Trend Report" DoubleClick reported the bounce back rate at 11.2 pecent in data gathered from analysis of its DARTmail email delivery technology, which involved over two billion emails from hundreds of its clients.

Scott submits that, "Your customers’ email addresses are the most valuable item you can collect. Whether you are sending offers for new products, incentives for viral marketing campaigns, or newsletters, your customers are going to be more receptive than if they were contacted through a purchased list."

This point is driven home by the figure below from the AMR Research report ’Turning E-Mail Campaigns From Trash to Cash,’ which shows the response rates to emails sent to an in-house list compared to those sent to a rented or purchased list.

In-house Versus purchased list results

Scott elaborates on the findings: "55 percent of respondents reported response rates of 11 percent or more when mailing to in-house lists. Only 26 percent of those with purchased lists had the same level of success."

Once the recipients are determined, the pivotal factors in whether the email will be opened and not immediately deleted involve the sender and the subject line, as these two elements are clearly referenced when prospective readers scan their inbox.

Scott Knoll, vice president and general manager of DoubleClick’s Marketer Solutions division suggests paying close attention to these elements. "The ’From’ line clarifies right away where the email is coming from. We recommend that company put their name very clearly in the ’From’ line, including the division. It does help to put the name of the company also in the ’Subject’ line with additional information. The more specific it is, the more success it is going to have."

The "DoubleClick 2002 Consumer E-mail Study" surveyed 1,000 consumers in September 2002, the third such study in as many years. In the report, 60 percent cited the ’From’ line as the most important element in deciding to open the email versus 35 percent for the ’Subject’ line. Combined, the two elements comprise 95 percent of the determining factors. The study also reported that 60 percent of those who would buy cited merchant recognition as the driver in deciding to open the email.

The report also indicated that the nature of the ’Subject’ line was a major factor in generating interest in opening the email, with news and discounts being the most compelling. There was a variance in what triggers prompt action to open the email based upon gender as shown in the figure below.

What Type of Subject Line Content Compels You to Open a Permission-based Email?

DoubleClick reported in November 2002 in its "DoubleClick Q3 E-mail Trend Report" an open rate of 37.3 percent. Once the email is opened, there are points that should be prominently made, preferably early on, to explain and assuage the reader on why and how they were sent it as well as concerns for their privacy and ways to opt out.

Knoll stresses these inclusions: "It is important for the company to state up front why the consumer is receiving it and have a very clear way to unsubscribe. Using a link to unsubscribe allows the consumer options on preferences and increases personalization. It can filter the messages for the consumer on relevancy."

Knoll explains that the privacy policy is not only wise, but also required for their customers. "We recommend a link to the privacy policy in the email itself. We require our customers to have a privacy policy that is consistent with our own."

Nussey adds that, "Opt-out rates go down when there is a clear privacy policy link near by. It is a chance to show your reader that you wear a white hat and are a good guy. It is also beneficial for people to see it in a different font or color."

It should also be noted that having a link to a Web page to opt out as opposed to a direct opt out like replying with unsubscribe as the subject, has an upside. To receive or not to receive is not necessarily a yes or no question as the answer may be "it depends."

For example, a sporting goods manufacturer sending email to all of their customers promoting new golf clubs will seem pointless and foolish to customers who have purchased tennis equipment and have no interest in golf.

An opt-out Web link can offer the consumer choices on what types of offers they are interested in. In this fashion the company gains increased knowledge of the customer and their interests, adding to the relevancy of future emails and increasing the odds of a successful outcome. Having a survey available which asks why the consumer is choosing to opt out can also provide valuable insight.

Ferris adds, "You should try to get some information on why they are opting out as well as make it easy for them to opt out. Many organizations don’t make it easy enough to opt out and many opt systems don’t work particularly well."

Additionally, providing the recipient with options empowers the reader. By letting the consumer drive the process, a stronger link between the customer and company is fostered intrinsically. This results in increased communication and understanding with reduced waste of time for both parties.

Bruce McCracken is a business writer with specialization in outsourcing. His coverage areas are primarily in IT, eCommerce, CRM, HR, and supply chain/distribution with focus on small to mid-sized companies. He may be emailed at abatar@bsn1.net.

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