Separating E-Mail Fact From Fiction

It seems as though everyone is an expert on e-mail marketing these days. Self-appointed experts are eager to share tips and tricks on the best practices as e-mail becomes widely regarded as the most efficient form of targeted digital media.

We all know that e-mail marketing principles are based on a collection of sound concepts from direct marketing, online advertising and relationship management. But what is applicable? Should we challenge preconceived ideas and buzzwords that many of us have taken as gospel? Experience can be a brutal teacher, so let’s separate fact from fiction in e-mail marketing.

Fiction: E-mail marketing is the electronic version of direct mail.

Fact: Don’t listen to your local agency or information technology manager. E-mail offers unique opportunities that require expertise.

Because of their inherent theoretical similarities, most advertising agencies claim that new forms of digital media are an extension of offline media. To the novice, e-mail marketing is “direct e-mail.”

However, e-mail marketing offers unique capabilities not cost justifiable or possible in print media: creation and delivery speed, immediate response handling (in a matter of hours), real-time optimization (in a matter of days), extensive and repetitive testing (hundreds of test cells multiple times), consumer interactivity (immediate activity and feedback), high degree of personalization (fields guarantee a unique, one-on-one experience).

Therefore, the practical implications of e-mail campaign strategy, technology, reporting, analysis and tactical execution are significant. This level of sophistication and the uniqueness of the medium require the expertise of specialized professionals.

Fiction: E-mail is a retention tool.

Fact: Harness the power of e-mail as a lead management and acquisition tool.

E-mail marketing has focused initially on customer loyalty due to the intimate nature of the medium. Most companies use e-mail as an “activation” marketing vehicle to cross-sell products and generate repeat purchases, and as a relationship-building tool.

But e-mail can be an efficient prospecting tool. Don’t miss out on a large number of targeted opt-in e-mail lists to build your pipeline of prospects and generate qualified leads. It enables companies to extend the reach of their marketing messages to hundreds of millions of e-mail inboxes through highly targeted third-party opt-in e-mail lists. Through prospecting services, marketers can implement intelligent e-mail prospecting strategies with dozens of third-party providers and generate a lower cost per acquisition.

Fiction: E-mail is a major ad broadcasting medium.

Fact: Don’t turn it into a loud radio. E-mail is about managing customer relationships.

The challenge is to use your technological skills to allow true communication to occur. No relationship can exist without two-way communication. To avoid declining response rates, marketers must learn new skills and deploy new technologies in creating a dialogue. Consumers don’t suffer the same limitations with e-mail as with traditional media. Companies suddenly open the gates to receive questions, suggestions and complaints.

Engaging customers in a dialogue is far more rewarding than broadcasting messages and is necessary when building long-lasting brand value. This can be achieved only in the context of a customer relationship management strategy. Marketers must now set up protocols and processes to manage the incoming flow of customer feedback in order to learn how their products and services meet their requirements.

Fiction: E-mail marketing is a powerful stand-alone communication tool.

Fact: E-mail is only as powerful as its integration with other media.

Most e-mail programs are run as isolated marketing initiatives. E-mail marketing companies promote the use of e-mail as a powerful and independent communication tool. Furthermore, some marketers use separate services to deliver various elements of their online marketing mix (banners ads, search engine optimization, e-mail, affiliate programs), which create separate “information islands” that offer a limited view of the customer interaction. Those companies have difficulties connecting data sources, collecting campaign results and analyzing behavior across multiple layers of campaign strategies. The process of implementing integrated marketing campaigns is simply broken.

Companies now realize they need to link online delivery (whether it’s through e-mail, banner ads, wireless or broadband digital television) to obtain a coherent customer profile and deliver a compelling message. The objective is to shorten the customer life cycle by moving from awareness to advocacy in an unbroken sequence of communications. E-mail marketing is only as good as its ability to integrate with other media.

Lie: Because of the low cost of e-mail, you should talk to your audience aggressively.

Truth: Your best customers can fire you in a single click. Talk to them wisely.

E-mail is so cost effective compared with other forms of direct communication that marketers are tempted to pull out of their drawer those nonfunded customer initiatives from last year’s budget (remember that expensive newsletter project that got cancelled during budget review?).

To avoid double-digit unsubscribe rates, carefully plan and consider the frequency with which you communicate to customers. In order to do this efficiently, you need to set a frequency cap — for example, no more than two messages a week, as some of your customers may end up in various segments of the database. Then define business rules and prioritize communications accordingly. If a customer is about to receive newsletter type A and promotion type B at the same time, which one do you want to prioritize? Or do you combine them? In summary, prioritize or your customers will. And you may not end up on their priority list.

Lie: Permission marketing is a breakthrough.

Truth: Permission is the first step. It’s like a blind date. Be curious but don’t get married too fast.

Another myth is that permission marketing is a revolutionary way to think about engaging consumers. The opt-in vs. opt-out debate has been covered extensively in the media. Getting consumers’ permission to communicate with them is a first baby step, but this is a long walk.

To build meaningful relationships, marketers should go one step further by collecting and using information about consumer preferences. Savvy marketers go a few steps further and empower their customers by asking them about the type of content they would like to receive (product updates, new products, promotions, educational content), about what product or service, how often (daily, weekly, monthly), in what format (text vs. HTML), to what e-mail address (home or business) and more. Customers can control to a large extent the way a company communicates with them, reducing unsubscribe rates and ultimately increasing conversions. So empower your customers now.

Lie: Send bulk e-mail to lower your costs and improve return on investment.

Truth: Focus on quality (personalization), not quantity (low-cost delivery).

Your colleagues probably brag about how little they pay for e-mail marketing compared with other media. Saving a penny here and there is not bad, but it doesn’t help you build long-term equity from the customer base. Savvy marketers are relationship builders. They look for ways to improve the quality of their relationships with customers. They are not willing to hire cheap resources, cut corners and compromise the quality of their customer communications for short-term savings.

So stop obsessing about low-cost delivery and focus on customer ROI. Start measuring the impact of e-mail programs on the lifetime value of your customers. Focus first on building a quality contact strategy — one that embraces customers and improves their lives. Technological capabilities such as clustering and personalization transform marketing’s perspective from viewing customers as targets to valuing them as assets to be nurtured. And better targeting usually translates into better conversion and higher ROI.

Lie: Use standard click-through rates to measure results.

Truth: Chief financial officers don’t care about CTRs. Use conversion data to optimize and make the right decisions.

Click-through data, like Web traffic, is not a good indicator of performance. Click-through data only measures the level of interest or simply the curiosity of target audiences. Chances are that corporate revenue forecasts are made up of more tangible, quantifiable data. A more accurate measure of the success of a campaign is conversion. Whether conversions are measured by a sale, download, trial or sign up, campaign performance will easily translate into numbers that chief financial officers care about. Some people just want customers who click. Chief financial officers want customers who buy.

Marketers recently discovered that e-mail is one of the most effective online marketing tools, but most don’t know how to use it. With the right information, corporations can be smarter about e-mail. Even industry experts claim that as e-mail usage increases, users are more likely to feel that they are receiving too much e-mail. Dealing with e-mail overload means we all have to be more strategic: We have to generate the kind of e-mail targets that they open, not the ones they delete. So will you be the dinner? Or the diner?

Bruno Gralpois is general manager for precision e-mail at Avenue A Inc., Seattle. Reach him at [email protected]

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