Strategies for Building E-Relationships

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It's obvious that the Internet is dramatically changing an organization's ability to establish and maintain customer relationships. Web sites combined with e-mail are enabling sophisticated one-to-one e-relationship programs that promise to fulfill database marketing strategy in a way that paper just can't.


The challenge is combining relationship marketing strategy with new technology to achieve clear, increasing return on investment. Technology by itself does not deliver the value in an e-relationship marketing program. Only by applying classic relationship marketing strategy to new technology will the marketer achieve a breakthrough program that goes far beyond traditional practice.


While e-relationship marketing is still an emerging field, the following five strategies point to key concepts that ensure success today.


It's not just for customers. Traditional relationship marketing programs focus on retention and increasing customer value. Because postage and printing costs are significant, building a relationship with a prospect who has never bought from a company doesn't make sense. Web sites and e-mail change all of this. Electronic media are so cost-efficient that companies now can afford to build relationships with prospects as a strategy for converting them into customers. Rather than simply execute acquisition campaigns using traditional media, companies now can recruit prospects into relationship marketing programs for ongoing, frequent, relevant communication.


The cost of an impression using paper-based direct mail in a relationship program can range from 40 cents to $1. Using e-mail, which can deliver much more customized content, the cost of an impression can decrease to 2 cents.


Build relationships to sell lower-cost products. If the cost of an impression in an e-relationship marketing program can decrease to 2 cents, then the range of products that can be sold using an e-relationship program increases dramatically. If the technology/production cost of an individual relationship falls to 50 cents for 25 impressions a year in volume, companies that traditionally could not afford relationship marketing programs now can.


Opt-in is the moment of truth. Though Web sites and e-mail enable cost-efficient relationships, they will be successful only if your target market gives you permission to talk to it using e-mail. That means your ability to opt prospects and customers into e-relationship programs will determine your success.


Give prospects and customers an e-relationship program they want. That means delivering a mix of hard and soft benefits and value-added and promotional content - the same requirements for an offline relationship program. But now you can more easily use information in a prospect or customer database to deliver one-to-one content using e-mail. The program has far more potential to be relevant to recipients, which translates into higher opt-in rates, higher open rates, higher click rates and higher response rates.


Frequency is power. With the low technology/production cost of e-mail, organizations can be in very frequent contact with prospects and customers. How frequent? As often as you can be relevant. That means delivering content that people want and providing for ongoing interactions with your e-relationship program.


Unlike paper-based relationship marketing programs, e-relationship programs can deliver high levels of immediate interactions that answer questions, provide more information, refer other people, etc. By delivering regularly scheduled e-mails with e-mails triggered by interactions with the program, you can achieve frequency levels that keep your prospects and customers involved with your company.


It's not just about getting e-mail out the door. Strategies for e-relationship programs are evolving quickly. Over the past 18 months, companies discovered value with very simple e-mail programs. The result is a saturation of outbound e-mail that potentially overwhelms the prospect or customer. To maintain high response levels, companies need to carefully craft a relationship program that delivers the right message to the right person at the right time - rather than just blasting e-mail to everyone.


By being more compelling and more relevant than other companies, your program can break through the clutter and continue to build a profitable relationship despite the huge increase in inbound e-mail.


Chris Peterson is chief marketing officer of MarketFirst, San Francisco, and CEO of FusionDM, a MarketFirst company.
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