Santa is loading up the sled, the eggnog will soon be flowing, and the New Year’s resolutions are in first draft. It’s hard to believe 2002 is already coming to a close. Thankfully, what could have been a grim financial year turned out not nearly as badly as initially advertised. Although the post-September 11 economic blues have not entirely dissipated, many more marketers this past year committed themselves to better understanding their customers and planning efforts based on return on investment (ROI) potential as opposed to making scattershot media buys. That commitment has paid off.
As we battle through the all-important holiday shopping season, initial indications are strong and 2002 could end on a high note. According to comScore Networks, consumers spent approximately $2 billion on merchandise and travel online during the week after Thanksgiving — that’s an increase of 34 percent over last year. Not bad. In addition, between November 1 and December 6, consumers pointed and clicked their way to spending $5.6 billion on online retail goods and services, which is up 17 percent from the same period in 2001 — respectable by any measure.
One interesting trend from the comScore data worth specifically noting is jewelry represents one of the fastest-growing online sales categories, whereas, in the past, consumers typically purchased items like jewelry only in stores. This trend proves that as the Internet becomes increasingly popular and consumers grow more experienced buying online, shoppers’ confidence will rise and new opportunities will emerge for marketers in all categories.
These developments, of course, also bode well for the ongoing importance of email in the marketing mix — not just for retailers but for all marketers. As a critical conduit of communication between marketers and their customers, email has the capability to help businesses increase revenues and decrease operational costs exponentially by building tighter and more valuable relationships throughout the customer life cycle. The vital bond between online users and their email represents a profound driver of current and future growth, not only for e-commerce but also for sales and cost savings across all channels.
But like all media, email is not without its own challenges. Marketers are continuously faced with getting the recipient’s attention, and doing so is often a mix of art and science. To continue email’s momentum, smart marketers must take the steps to optimize email communications and their customer relationships, so that each message is valuable, relevant, and ROI focused. This brings me to my email prediction for 2003: Email and customer optimization will propel the continued success of email as a marketing and communications medium.
Here are my lucky seven email and customer optimization strategies and tactics that will play an increasingly important role in the success and evolution of email in 2003:
- Hygiene. Though it all starts with securing permission on the front end, bounce rates are increasing due to a number of issues. These include input errors and address changes, often caused by customers upgrading to a broadband service provider or switching jobs. While we typically advise clients to have customers confirm their email address at registration, additional hygiene processing can be an affective tool in maximizing success and lowering costs.
Emerging data tools can automatically validate list data by verifying the domain of an email address, the existence of an actual user at that domain, and the ability of the address to receive messages — all prior to mailing. Several email providers offer this technology as a product that can be integrated into your list management process or as an outsourced service. The benefits of address validation are improved delivery rates, cleaner lists, increased email operational efficiency, and reduced overall delivery costs. In addition, multiple delivery attempts to an invalid email address can create unwanted attention from major ISPs or Web-based email service providers. Hygiene on both the front and back ends will be critical!
- Spam “scans.” Unfortunately for all email users, spam is not going away any time soon. Though antispam filters have thankfully improved, many sometimes incorrectly flag permission-based messaging as spam. These filters either block permission-based messages or dump them into a bulk folder where it typically is deleted en masse. This filtering can frustrate both recipients and permission-based marketers alike.
New technologies and services are now available to legitimate marketers from permission-based email providers to help them scan and analyze their messaging for “spam traits” and trigger keywords that could set off the antispam alarms. These scans can even score a message to weigh the likelihood of it being mistaken for spam and offer ways to lower the score.
- Response-based modeling. Permission-based marketers are beginning to create advanced models that map out a messaging “path” based on each recipient’s response or nonresponse to a campaign. Elements of each follow-up email communication then vary based on the previous response/nonresponse. Using rule-based triggers, messaging can be automatically assembled and delivered according to the response model. Response-based modeling has proven to increase response and conversion rates over the course of a long-term email program, and this is a strategy sure to grow in popularity in 2003.
- Sophisticated segmentation/analytics. Similar to response-based modeling, usage pattern segmentation techniques will vastly help marketers improve their email programs by better analyzing, reacting to, and anticipating their customers’ behaviors. Usage pattern analyses combine response/nonresponse data with frequency, time of day, day of week, and other information to build richer behavioral profiles, segments, or clusters. These new clusters are then leveraged to craft new segments or subsegments designed to fuel stronger performance. Next year will certainly see the rise of integrated campaign analytics and planning tools for both online and offline marketing initiatives.
- Integration with all media. 2002 witnessed companies beginning to utilize email more in step with direct mail, Web sites, call center scripts, in-store promotions, and print and broadcast advertising. You haven’t seen anything yet. Over the upcoming year, marketers will be forced to integrate marketing initiatives across all media even more tightly as an increasing number of businesses become truly multichannel organizations.
- Advanced testing. One of email’s greatest advantages over other media is its extensive reporting capabilities. Marketers will accelerate their usage of email’s real-time reporting to perform more rigorous testing of variables, including subject lines, creative elements, copy, offers, and even delivery timing. Though many marketers are already conducting split-cell testing on a limited level, more sophisticated testing will help the real pros differentiate themselves from the inbox clutter, incrementally improving their results and ultimately growing ROI.
- Distributed campaign management. While Fortune 2000 companies continue to embrace the power of email marketing at the corporate consumer level, many are missing the boat when it comes to leveraging the customer relationship at the local level. After all, customers likely have an existing relationship with a particular branch, subsidiary, or franchise. According to Jupiter Research (a unit of ClickZ’s parent corporation), more than $1.4 billion will be spent on local online advertising efforts in 2003, a figure that will balloon to nearly $3.5 billion by 2007. In the coming years, general or national corporate efforts will be supplemented with more localized content and relevance to grow response and ROI. An example would include a message with the subject line, “Invitation to the Macy’s Huntington Annual Preferred Customer Sale.” This will be especially powerful at the franchise level as distributed campaign management tools become more prominent in the continued localized communication push.
Email optimization should be a major factor in helping marketers improve their bottom lines in 2003 and beyond, and it will be very exciting to see how the year will unfold. Now it’s time to put the crystal ball away and get back to work. Happy holidays and have a great new year!
Until next time,
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