E-Mail: A Costly or Cost-Effective Part of CRM?

I belong to several frequent flyer programs. The other day, one of them sent me an e-mail about its latest online deal. The e-mail started off, “Dear Jane: We want to take a quick moment to inform you of the special offers available to you as a member of our frequent flyer program.” However, the message went on to talk to me in a way that made it obvious that the airline knew nothing about my travel preferences, the relevancy of its offer to my travel needs or anything else about me. With a click of my mouse, the e-mail disappeared.

Despite the fact that I gave my permission to receive the e-mail, when it doesn't contain content that's relevant to me, I delete it. If this happens more than once or twice, I'll opt out of receiving future messages. And I'm probably no different than the rest of you. The reality is that e-mails promoting random offers, goods or services with little useful information are just one click from oblivion.

The floodgates have opened. Marketers have spent millions to drive anonymous traffic to their Web sites, only to discover that an even greater challenge lies not in getting people to their site, but in creating relationships that result in loyal, repeat and profitable customers. The solution? E-mail.

E-mail is widely heralded as the most cost-effective tool in the direct marketer's arsenal. It generates high response rates, is inexpensive and provides immediate and measurable feedback, allowing a much shorter period of time from test to full implementation. However, unless marketers make their messages meaningful, engaging and relevant to the recipient, they put their most valuable asset — their relationships with their customers — in jeopardy.

Why are poorly executed e-mails so potentially dangerous? Sending irrelevant messages irritates customers and wastes their valuable time. Consumers are on the brink of being buried in the avalanche of e-mail that is beginning to descend on them. Forrester Research predicts that e-mail campaigns used for customer acquisition and retention will grow from the 3.5 billion pieces sent last year to 16.9 billion this year, 47.5 billion in 2001 and more than 200 billion by 2004. Other sources predict even higher volumes.

As more businesses use e-mail to communicate with their customers, the clutter will rise and click-throughs will decline. E-mail has the potential to be the direct marketer's method of choice for achieving customer loyalty. However, only after its uses are evolved and its abuses stopped can e-mail be the killer app we've all been promised.

The next level — or evolution — of e-mail marketing is to minimize the risk of ever again sending a customer something in which he or she isn't interested. To do this, you need to understand each customer at an individual level. While that may seem like an impossible feat, it can be done using the latest in database analytics and personalization technologies. And it can be done cost-effectively.

Broadcast e-mail that is sent shotgun-style to hundreds of thousands of (potentially former) customers can now be replaced by individualized messages that are generated automatically and that accurately match products, offers, services and promotions with individual customers.

Fulfilling e-mail's potential. A well-targeted e-mail program should take this medium well beyond mass personalization (Dear ), and even beyond traditional segmentation (Dear , who is a member of my customer segment X which is defined as females living in Minnesota who have expressed an interest in travel). E-mail can and should create a personal conversation with each of your customers, one in which you can demonstrate that you have been listening to them, that you understand their preferences and that you care about serving their needs.

To ensure that you're using e-mail to create positive individual experiences between you and your customers, consider whether you've laid the proper groundwork:

• Build a reputation for sending messages that always contain content relevant to the recipient. Customers are more likely to open e-mail from a company that demonstrates that it knows them vs. some other marketer's e-mail. In addition, customers will be less likely to opt out of your future mailings and more likely to act on them (to click and eventually buy).

• Use true one-to-one personalization. Establish and nurture the relationships you have with your customers before you are forced into a position of rebuilding a broken trust with them. Don't ignore the valuable information consumers tell you through their words and actions by conducting mass unpersonalized e-mail campaigns. Instead, take advantage of database analytics to understand who your customers are, and use sophisticated personalization technology to enable individual targeting.

• Finally, as an industry we must be sensitive to the volume of e-mail we are sending to consumers. Don't abuse the permission to send offers via e-mail with overuse. In addition to gaining permission to send e-mail, ask consumers how often they want to receive mail — and honor their requests.

Quite simply, e-mail needs to serve your customers' needs by delivering only information about products and services that they will find valuable. Because ultimately, it's all about creating a compelling, personalized experience for the customer that fosters a deep, lasting and profitable lifetime relationship.

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