E-mail Marketers Must Get Relevant

The majority of e-mail marketers are failing to use e-mail as a relevant marketing tool, at the same time that consumers are spending less time and attention on e-mail, according to Jupiter Research VP and research director David Daniels.

Recent Jupiter Research surveys find people are getting about the same number of e-mail messages, signing up for multiple e-mail accounts more often, and spending less time looking at e-mail. Those factors make it even more important for marketers to figure out how to break through and get their attention, Daniels told marketers yesterday at the ClickZ Specifics: E-mail Marketing conference in New York.

“It’s become acceptable that in any given campaign, only one person out of 100 will do what we want, and 60 to 70 people will ignore you,” he said. “That shouldn’t be the case.”

What marketers should be doing is focusing on relevance, which isn’t happening enough, he said. The majority of marketers still use only basic personalization in e-mail campaigns, despite the fact relevant messages can lead to almost as many sales as free or discounted shipping offers.

About a quarter of marketers surveyed by Jupiter are sending broadcast e-mail campaigns with no differentiation or targeting. The majority of marketers, 65 percent, are using limited personalization, such as using a customer’s name, and limited segmentation, such as demographic targeting or using geotargeting to identify a local store. Only 11 percent of marketers send targeted campaigns that use a customer’s purchase history, click-stream activity, or other data to send a relevant, targeted offer.

Untargeted broadcast e-mails, with no personalization or segmentation, have an average open rate of 20 percent, average click-through rate of 9.5 percent, and average conversion rate of 1.1 percent. Campaigns triggered from user actions, such as shopping cart abandonment, have a 27 percent average open rate, 9.3 percent average click-through rate, and 2.3 percent average conversion rate.

Lifecycle messaging campaigns, such as product replenishment messages, have an average open rate of 26 percent, average click-through rate of 14 percent, and average conversion rate of 2.8 percent. Campaigns that integrate Web site clickstream data for targeting perform best of all, with a 33 percent average open rate, 14 percent average click-through rate, and 3.9 percent average conversion rate.

As methods become more sophisticated, dedicated salary requirements rise. Broadcast e-mails require just $109,000 in annual salary, while triggered campaigns require about $128,000 in salary resources. Lifecycle messaging campaigns are considerably more expensive than less sophisticated methods, requiring $263,000 in annual salary resources. Campaigns using clickstream data require $276,000 in salary.

The increased costs are usually offset by increased revenue, Daniels said. Triggered campaigns on average bring in 171 percent more revenue than broadcast campaigns, lifecycle campaigns perform 389 percent better, and clickstream campaigns perform 781 percent better than broadcast.

Increasing relevance can considerably impact consumers’ buying decisions, said Daniels. While not at the top of the list of influencers, relevance was right after cost in importance. Consumers polled by Jupiter Research said the top two contributing factors to a recent purchase were a sale price and free or discounted shipping, each of which lead to an immediate purchase by more than 67 percent of respondents and a deferred purchase by over 70 percent of respondents.

After those cost factors, the next most important influence on purchase behavior is relevance — showing users a product they’d previously considered. That leads to immediate purchases by 60 percent of respondents and deferred purchases by 58 percent. Subject line personalization leads to only 9 percent of immediate purchases and 8-percent of deferred purchases.

Another recent Jupiter survey finds 54 percent of respondents saying they clicked on a link in an e-mail because the product or service interested them. Forty percent do so when copy piqued their interest, while 35 percent are influenced by the subject line. Only 12 percent of respondents say a single large image influenced their decision to click, and 9 percent are influenced by several smaller images.

“Targeting and product assortment drive relevancy and trump creative, and marketing copy and relevance inspire e-mail response behavior over graphics,” Daniels said. “People still need to be sold. They need to learn more about the product and become educated, or that concept needs to be sold to them.”

Marketers should not be content with an average 30-percent open rate, a 12-percent click-through rate, or a 1.1-percent conversion rate, Daniels said. By increasing relevance, marketers can easily raise their conversion rates above 3 percent, and shoot for 5 percent.