See Ya Later, Spam

Last year’s hype was web personalization. This year, it’s direct email marketing. We’re not talking about Spamming customers. We’re talking about sending them relevant email messages that they choose to receive.

It’s no wonder that email marketing is hot. A recent Cyber Dialogue/FindSVP survey says that 75 percent of the 41.5 million adult online netizens use the Internet for email. When it comes to e-business, almost 100 percent have email installed at their sites (ZD Market Intelligence). Email will continue to grow at a rapid pace, and it is anticipated that there will be108 million people using email by 2000, according to the Electronic Messaging Association.

Email is becoming quite a habit. The percentage of Internet users checking email daily has grown from 50 percent in 1996 to 59 percent in 1998 (Pew Research Center). More interesting is the shift in user motivation for Internet email use. From 1995 to 1998, the “work” motivation to use email declined from 31 percent to 12 percent, but the “personal” motivation grew from 30 percent to 41 percent during this same period. Opportunity abounds for both business and consumer email marketing.

Forget Spam

Email marketing is all about good business and putting your customers’ needs first. Yes, Spam is very disrespectful of online users. No, we don’t want the government to legislate our online marketing efforts.

Strip away the controversy by letting customers choose to receive email marketing from us, and we all win. Why send email to folks who don’t want it? Why waste both your time and your customer’s, for a response of less than 1 percent.

Even if email is less expensive to send than direct mail, it still costs time and money. And it could cost your reputation. In the 10th GVU WWW User Survey, over 75 percent of respondents “strongly disagreed” with the statement, “I like receiving mass electronic mailings.” Another 14 percent “disagreed somewhat” with that statement. Thus, almost 90 percent of the web users who responded to this survey aren’t too excited about Spam.

Email Marketing Formula

It takes targeting and a good opt-in list for email marketing success. “Opt-in email lists are more responsive. On average, our email lists achieve 5 to15 percent click-through rates,” states Rosalind Resnick, CEO of NetCreations, a pioneering opt-in targeted email service. Resnick adds, “We don’t think of the email users as recipients, we call them list members. The email list members choose to receive the email, thus our advertisers receive better results.”

NetCreations’ PostMaster Direct Response has over 9,000 email lists covering many different interests — woodworking, computers, dolls, gardening, travel, Internet and more. Marketers can use an email list service such as NetCreations to drive site traffic and acquire new customers. Because these are highly targeted lists, the email users are highly qualified before they even get to your web site. (For information about additional targeted email list services visit Web Marketing Information Center.)

Spam-Less Email Strategy

When seeking out email list services, consider two criteria: targeted and opt-in. These criteria also apply when you build your own email list from your customer base. The benefits of a targeted, spam-less email strategy include:

1. Qualified prospects
— Opt-in email recipients are qualified because your prospects and customers chose to receive your email. Plus, with targeted email lists, the recipient wants to receive specific and relevant information about products and services that s/he is interested in. You move beyond marketing to “suspects” to finding highly qualified prospects.
2. Segmenting/differentiating customers — By the very nature of opt-in email programs, the prospects or customers segment themselves. If you have developed an opt-in personalized email service, customers who sign up are saying, “Hey, I’m different, and I want to do more of my business with you.”
3. Customer loyalty — In a recent article, I told you about the MyPoints web-based program, where more than 70 percent of members said they wanted to receive more email. The program also achieves 50 percent repeat business. These results come from an opt-in, targeted email model.
4. Company reputation — According to Rosalind Resnick, opt-in can help ensure that your company doesn’t end up on the Blacklist of Internet Advertisers. When 90 percent of users don’t like mass emailings, they would frown upon the company or web site that sends it. For more information about spam visit CAUCE.

Forrester Research analyst Paul Sonderegger notes that “companies are using opt-in email marketing to stay in touch with customers in order to build relationships and increase sales.” In recent research interviews, Sonderegger saw an increased interest by the companies conducting direct email marketing because of the high response rates over traditional methods such as television and print advertising.

“Overall, the research participants experienced an average 18 percent click-through rate on opt-in email campaigns and a conversion rate of 4 percent on the overall campaign [not just on the click-throughs],” states Sonderegger. He adds, “Direct marketing using email can be quite powerful. The trick is to harness this power by sending email messages that are relevant to the recipient.”

While opt-out is better than spam, opt-in is, well, optimum. You’re sending relevant emails that your customers have requested. You’ll be on your way to building long-term, profitable relationships with your customers.

Next Week: An in-depth case study of Peapod will demonstrate the process of web site personalization and the databases that make it all work.