Wham Spam, Thank You, Ma'am
Time was when businesses had a front door with a lock and key - plus a handle to open it. Even the telephone delayed entry, because somebody had to respond after a couple of rings.
But that's no longer so, and many companies today are throwing their portals wide open by setting up fully interactive Web facilities. Yet too few have given serious thought to what happens once the ability to create that vital one-to-one customer dialogue is established. Most haven't considered what happens when customers start sending messages - obviously in the expectation of a prompt reply.
It's a problem if e-mail volume stacks up. And, can you stand the red-hot pace without running short of relevant information to fuel this new and intimate affair? The solution could be to combine everything known about your customer in an
e-mail database. But will your "partner" be happy with that?
The excitement of being able to connect with customers and measure response - positive, passive or even an outright rejection - is sending direct marketers into a right tizzy. For they realize that many customers view an e-mail onslaught as spamming.
According to the Direct Marketing Association, interactive Direct Marketing is set to mushroom as the traditional mailbox is bypassed in favor of messages online. These are expected to soar from 4.7 billion in 1998 to 50 billion in 2003, the boom reflecting the fact that e-mail messaging can cost less than 10 cents apiece compared with an average $1.20 for a customer mail-out.
"Canning Spam," by James Ryan (November 1999 issue of Business 2.0), endorses marketing by e-mail, citing Williams-Sonoma, one of America's leading direct marketing organizations, which recently redirected its customer communication efforts toward
e-mail. Also, The GartnerGroup believes the success of e-mail as a marketing channel depends on a company's ability to bring all its customer information together in an e-mail database, Ryan wrote.
Problems arise when marketers believe that they own customers, even though they may have only names and e-mail addresses in their database. Given the facility to connect cheaply and easily, they feel compelled to deliver a daily message about their product.
In "A Short History of Online Advertising" (B&T Weekly, October 29, 1999), David Purcel observed that creating one-to-one dialogue was all very well - but finding the right things to say to customers as individuals and choosing the right time to say them could be harder than generally supposed. It would be difficult to earn consumers' loyalty by continually bombarding them with intent to sell at all costs, he said. Creating the right mind-set by linking basic details to the target's interests and lifestyle often increases response, however. A personalized offer, created for individuals by using sophisticated software to identify them by demographics, past purchase history and areas of interest, seems the way to go.
Spamming dangers possibly outweigh benefits - but e-mail marketing can be extraordinarily valuable, even though online consumers are inclined to react negatively to an e-mail sales pitch if it is not carefully targeted.
A report by based consulting firm Cognitiative.com, San Francisco, showed that 32 percent of online consumers disliked sales-oriented e-mail so much that it put them off doing business with the sender. It also showed that personalization works best when customers feel they are the ones controlling communication and making decisions about how to use it.
Spam has an understandable parallel in cold telemarketing, generally thought to be more intrusive than junk mail, although spam may now have a greater nuisance value, since it is much more difficult to weed out from other e-mails being processed by the individual or company. It's even worse than having the fax machine clogged with junk, since that can at least be viewed quickly before being tossed.
Simple gate keeping is called for. There is the easy opt out displayed by better "list servers" at the beginning and end of e-mail, as well as an opt-in system where you sign up to a Web site and confirm whether you're prepared to receive more when the first e-mail arrives.
But most companies wouldn't want to encourage their best customers to opt out of an amazingly easy and cheap method of communication. Neither do they wish to suffer the embarrassment of rejection, then find their relationship links strained or snapped.
So an event-based strategy focusing on occasions such as birthdays, the anniversary of a purchase or a special customer benefit is well worth considering as a way of establishing and maintaining a meaningful dialogue.
In his book "Permission Marketing," Seth Godin sets out guidelines for opening a dialogue with a customer by first gaining tacit approval - a few companies have learned that it's vitally important to first understand customers and their needs.
To do that on a big scale, efforts to gain collaborative information from customers must be intensified, ongoing profiling knowledge gained, and data-mining techniques and analysis applied to understand their individual preferences.
Automation of that process is what software manufacturers, customer relationship management experts and now electronic CRM vendors are fighting to deliver to companies eager to communicate with customers by e-mail.
Switches automating a significant proportion of growing e-mail content come from companies including AnswerAgent, which uses case-based reasoning and artificial intelligence to understand the content of incoming e-mails. Going into the client knowledge base, it then pulls up prospect data, segmenting by message type to determine whether an e-mail should be returned to sender.
We're now seeing a revolutionary shift from call center to communication or "intellicenter," where e-mails and telephone calls are aggregated along with responses to both. Here, the four key areas are ordering provision, information supply, technical support and e-commerce.
Online providers like Siemens Labs and Aspect allow a Web page to be split, the top half containing site content and the lower half taking the form of a dialogue box. Users can ask questions and interact with an online call center operator line using keyboards enhanced by simultaneous voice and data communications software.
As Ryan reported in his article, The American Finance and Investment company which sells mutual funds from www.loanshop.com, is creating a shift, writing 70 percent of its contracts over the Web, which is used as a door opener. The prospect is taken through a range of options, and questions about charges and so on are answered before a live operator comes on to close the deal.
Will businesses outsource their electronic direct marketing solutions, just as they have their traditional ones? A number of companies are competing in this space, including Message Media, Post Communications, Annuncia and Digital Impact. Kana Communications, a leader in e-mail customer support, has brought Connectify, which focuses on outbound e-mail - the perfect complement to Kana's inbound e-mail solutions. CRM companies like Exchange Applications have seen the dramatic shift toward customer management using e-mail and have bought up e-mail software expertise. These solutions can be on an outsourced basis, or software may be licensed to keep communications inhouse, as with Citicorp.
Besides offering e-mail, the companies will also serve up dynamically generated Web pages. The combination of e-mail and new HTML e-mail will create dynamic Web interaction, and then the full power to build relationships on the Internet will be realized. Resembling a Web page, HTML
e-mail offers more impact, even making it possible to monitor whether the user's eyeballs are actually seeing your message - another reason for renewed focus on basic direct marketing principles of accountability, rather than those of Web advertising.
Business 2.0 itself said that to ignore the power of e-mail-based marketing makes incredibly bad business sense. For while banner ads get a 0.5 percent to 2 percent click-through rate, well-targeted e-mails result in a sale in 5 percent to 15 percent of cases - an extraordinary result achieved by first gaining customer permission.
Costs are around $130,000 plus 15 percent to 20 percent service fees per annum for e-mail software, although vastly improved customer service is required to make the process worthwhile.
The advent of new and more sophisticated software means the barriers are falling fast. But as we know, software isn't everything. There's still much to gain from mastering basic direct marketing methods - especially personalization and treatment of customers as individuals - rather than pouring thousands of dollars into Web banner advertising, sponsorship or placement deals. The main emphasis, I suggest, should be on using the right people to help you
e-mail along with carefully considered event-driven strategies which are less intrusive, to turn one-time customers into repeat buyers, then customers for life.