Making inroads to the inbox: Is permission enough?

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Costco customers CAN expect wide product choice and low prices - and to know exactly why Costco is e-mailing them.

The wholesale giant grows its list despite hefty permission standards by keeping customers aware of why it's e-mailing them. It works with Return Path, New York, to help with its deliverability. The retailer employs a permission-based e-mail-marketing campaign to Costco members to introduce existing members to online exclusive specials and in-store promotions, and lets customers know when they will be receiving communications and how their e-mail address ended up on the list.

"If we didn't get the e-mail address from a direct interaction on their part, we try to let them know somewhere in the e-mail where we got their address," says Robb Walters, director at US and Canadian e-commerce businesses at Costco, Seattle. "We try to be as up front as we can with our customers because we value our relationship with them. The e-mail will say if you signed up through a third-party service."

Permission shouldn't cost a list its size

To build its list, Costco collects e-mail addresses on its home page using a standard sign-up form as well as a pre-checked box signing up for promotional e-mails on its member-registration page.

In addition, the retail chain collects addresses through third-party service providers. Snapfish, San Francisco, a photo-printing service that lets Costco customers order photo prints online and pick them up in the Costco store, will collect e-mail addresses for Costco but with the customers' knowledge.

"We give them the option to opt out," says Robb Walters. "We are fortunate as a club that we already have an existing relationship with our customers."

The membership-based retailer sends out e-mail twice a week to introduce members to new products, as well as a once-a-month e-mail with member updates. The e-mails are used to drive customers into the store as well as to its e-commerce site. Ninety percent of the items on the site are Web-exclusive and extend an additional value to customers who are members of club for the price savings.

"We focus on acquisition at every touch point that we have with our members," Walters says. "If they go online we try to get them to go into our stores or we send e-mails trying to get them to come to our Web site."

A return to permission

But just because a customer opted in last year does not mean that they want to be contacted again this year.

"Permission is something that you always need to come back to," says Matt Blumberg, CEO of Return Path. "If someone opted into your list 15 months ago and they haven't clicked on an e-mail since, don't dump their name into your house file. Send out a re-permission e-mail to see if they are still interested in receiving e-mails from you."

Costco includes an opt-out link in each e-mail it sends and registers these opt-outs in real time. List scrubbing happens before every campaign is sent so that the list is always current.

"We want to make sure that we are compliant, but more importantly we want to make sure that a customer that doesn't want to hear from us, doesn't," Walters says. "We respect our customers' wishes."

Keeping permission promises does not have to be a bad thing for list size.

"Permission e-mailing is the way to establish a relationship with someone and introduce the brand and build a relationship," Blumberg says. "It runs counter to what you are trying to accomplish if you say, 'Ha, now I've got your e-mail, and I can mail you whenever I want.'"

Permission does not guarantee delivery. Marketers who follow the Direct Marketing Association's guidelines know that e-mail can't be sent without a consumer's permission, as that means it is not compliant with the Can Spam Act. Just because a marketer has permission does not mean Internet-service providers will deliver the e-mail.

"At the end of the day permission is, quite frankly, not the key factor that determines if an e-mail is good or bad," says Charles Stiles, postmaster at AOL. "It is really about what the consumer wants. Even if they asked to receive the e-mail, if they do not find value in it, then it is not a good e-mail. We want to make sure that our customers are happy."

Beyond permission

What more can marketers ask if consumers have already opted in? According to Return Path's Blumberg, ongoing communication with the consumer ensures e-mail is wanted and relevant.

"Marketers tend to take 'permission' to mean that they have permission to do whatever, forever - which is not true," Blumberg says. "Companies have gotten sloppier about how they use permission. Consumers may give you their e-mail address for a monthly address, but that doesn't mean that they can send me daily messages. If I'm not happy with what I'm getting, I will complain to the ISPs, and I have every right to."

Vendors agree that relevancy is key to making permission work.

Barry Abel, vice president of field operations at Message Systems, Columbia, MD, says: "Bottom line: If a consumer opts in for [e-mail] the only way a sender can spare the consumer unwanted e-mail is by doing a good job of targeting and segmenting the mail with extremely relevant content."

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