When should a company outsource its email marketing operations?
If you’re struggling with this question, this column is for you. Although I can’t cover all situations in one article, today’s case study profiles a business for which it made sense.
FamilyWonder.com bills itself as the complete source for family entertainment, with ideas and activities for children, and reviews, news, and advice for parents. Launched in September 1999, the company had quickly built up an opt-in list of customers within a little more than two months, thanks to a comprehensive campaign that covered print, radio, online, and other advertising.
With the holiday season quickly approaching, FamilyWonder.com needed to put more of its efforts into keeping the customers it had already acquired. As you know, email marketing is one of the more cost-effective techniques for retaining customers; FamilyWonder.com was well aware of it, too. But as a young company, FamilyWonder.com wasn’t set up to manage its own email marketing campaigns.
“We didn’t have the infrastructure, the bandwidth,” says Simon Fleming-Wood, the senior marketing director. “At the time we needed to use the resources available.”
FamilyWonder.com had been working with Avenue A, a “digital marketing optimization company” – quite successfully, according to both accounts – on its advertising side, so it turned to Avenue A for assistance with the email marketing piece. The two companies teamed up to launch a series of campaigns beginning in December (and so far have conducted more than two dozen campaigns).
One of the components Avenue A brought to the mix, Fleming-Wood says, was its support for building and creating messages. In its short past, FamilyWonder.com hadn’t had much experience with testing the types of messages that would be most effective. The two companies bounced ideas off each other, and Avenue A’s consulting team was able to offer insight on the types of offers that its experience had shown would be most attractive and then help create those offers.
For instance, together the companies were able to build messages optimized for AOL members, HTML-mail users, and text-only recipients, and they also tested a number of subject lines. In addition to Avenue A’s ability to send large amounts of email, Avenue A also worked with FamilyWonder.com to make sure the site itself had the bandwidth necessary to handle the anticipated response.
But the more important piece Avenue A brought to the table, Fleming-Wood says, was the ability to turn the campaign around quickly and track results. FamilyWonder.com staff members could log on to the secure client site and watch the real-time click-through and order rates, helping them to learn as they went about what was working. For example, in the first campaign, FamilyWonder.com was testing a certain promotional concept. Fleming-Wood notes the concept worked well, and the group was able to mobilize and send the message to the entire email base within the crucial holiday period.
“We wouldn’t have been able to do this by ourselves in the same time frame,” Fleming-Wood says. “The tracking helped us modify and make adjustments on the fly.”
Granted, we can’t compare numbers for any one company on how going it alone would have done against outsourcing a particular campaign, since a company typically does either one or the other. But I can share with you some of the information given me by Avenue A, which you may find useful in evaluating your own company’s efforts to date:
- The Avenue A and FamilyWonder.com team created an offer in which FamilyWonder.com returned an amount equal to consumer spending, for example, a recent $20 rebate to every shopper who spent $20. This campaign produced a 10 percent conversion rate.
- FamilyWonder set a cost-per-conversion goal of $7 for October 2000. By May 2000, Avenue A was delivering an average cost per conversion of $3.75.
- Avenue A uses data tracking to measure shopping-cart attrition rate (the number of customers who quit before completing a purchase). Avenue A can tell FamilyWonder.com just how many of its shoppers complete the sale – between 65 percent and 80 percent – and provide insight on how to increase those numbers.
Your case study here: As always, I’m looking for ideas for useful case studies. If you have one that shows the flip side of the coin – where a company has found (or is sure it has found) it more productive to go it alone rather than outsource, I’d love to hear from you. Please email me at email@example.com.