The Third-Generation E-Mail Evolution
In 2004, marketers will pay $4.8 billion to send more than 200 billion e-mail solicitations - with 66 percent designed to generate incremental business from existing customers, and 33 percent designed to generate new customers, according to Forrester Research Inc., Cambridge, MA.
With the bombardment of e-mail, information overload and privacy intrusion, there is a danger to lose the trees from the forest. If this trend continues, the value of e-mail marketing will diminish much like the path that direct mail has taken. "By 2003, the number of marketing e-mails will equal the volume of direct mail forwarded by the U.S. Postal Service, and by 2004 the average household will receive nine pieces of marketing e-mail per day," said Jim Nail, senior analyst at Forrester.
Given these pressures, e-mail is being forced to undergo a paradigm shift. How could you as an Internet marketer sustain the value in this communication channel without your message becoming junk mail? The answer is third-generation e-mail. It represents an industry change wherein people receive what they want when they want, shifting from company-centric marketing to client-centric customer relationship management. Only through this shift will e-mail retain its value.
Maybe the best way to understand the future is to review the evolutionary path e-mail has taken. First-generation e-mail was the early adopted newsletter concept whereby companies could keep in touch with their client bases, partners and prospects periodically by sending messages via e-mail. Second-generation e-mail serves the role of a marketing function. Companies used e-mail to test message creative and text copy. Response rates would differ depending on the type of creative and the message content and subject line.
Third-generation e-mail takes e-mail marketing several steps further by responding personally to an individual by sending the information he wants, when he wants it and at a frequency he permits. For example, when a business partner calls at an inopportune moment, you usually ask him to call back at a more convenient time. The promise of third-generation e-mail marketing allows this dynamic to occur.
In Barnes&Noble.com newsletters, if a customer replies directly to an e-mail sent to him with a question that requires a call-to-action, that person has taken the time not only to read the message but also to send a response. This would describe the type of customer that is considered the "low-hanging fruit" and has the lowest cost of conversion.
Under the current paradigm, companies miss the opportunity to harvest this fruit as they are likely to be perceived as too cost-prohibitive to provide a "one-off" response. However, these responses represent the customers that are the most engaged in your product or service offering and, therefore, the ones that need the most attention. Not responding to them, auto-replying to them or sending nonpersonalized messages are three good ways to opt out your opt-in list.
The way third-generation e-mail marketing should work can best be illustrated in this hypothetical e-mail dialogue. Tracey H., a current Barnes&Noble.com customer, receives a personalized e-mail message telling her about recent book releases that can be found on its site. Tracey's request is processed according to a predetermined set of rules, while a personalized response is cued to be delivered at the appropriate time. In Tracey's request, not only does she ask for specific information but also implicitly defines the frequency at which she would be most responsive to the information. Here, Tracey is predisposed to buy.
Tracey receives an immediate response, ideally within one hour, stating that she will be notified when the book is released. Once the release date has been determined, Tracey receives an e-mail with the release date and related links. On the day of the release she receives an e-mail with a link to the page selling the book.
After the transaction, Tracey receives an order confirmation, tracking information and a thank-you as well as a link to similar books. The important part here is that the follow-up message references Tracey's past e-mail request to trigger a specific recollection.
Essentially, third-generation e-mail is customer-centric. In this model, e-mail marketing becomes less of a function of direct marketing and more of a function of customer relationship management.
The companies that do not embrace the e-mail evolution are going to leave their most valued customers rotting on the vine.
Angelo A. Rossetti is co-founder and managing partner of NetMarketing LLC, Bridgeport, CT.