The Next Big Thing Really Is Big

First an admission: I generally have no idea what the next big thing is. What's more, I generally have no confidence in those who claim they know. I guess I would consider myself a contrarian; I figure if enough people believe in the inevitability of something (interactive TV springs to mind, or the Packers being a sure thing to beat up the Broncos in last year's Super Bowl), the best bet is in the opposite direction.

When it comes to e-mail, however, all bets are off. This is a medium that delivers the goods. It also can be remarkably productive — not only in prospecting for new customers but in strengthening the relationships you already have with your existing customers. And we've only just begun to scratch the surface in terms of the marketing opportunities it represents. As the universe of targeted e-mail addresses increases, so too will its applicability.

The e-mail landscape. In the United States, there are about 100 legitimate e-mail lists on the market, delivering a universe of 70 million names (before unduplication). Within that universe, 13 million names — on about 50 different, legitimate lists — are opt-in. But those numbers belie e-mail's true market potential, as new opt-in e-mail names are coming online at a breathtaking clip (1 million a month). And our increasing ability to target e-mail is just as impressive; in fact, it now is beginning to rival the selectivity of postal address lists.

But equally — or even more — important than the e-mail lists you can rent are the ones you can build yourself. In fact, for the past year we've been advising our clients — and are telling you now: Don't allow another day to go by without initiating a plan to build your own proprietary opt-in e-mail database.

There is no real mystery to it; the first step is to simply ask your customers if they'd like to hear from you by e-mail. (You're likely to be amazed at how many will take you up on the offer.) To increase response, you can construct and test a series of more compelling offers. A few with which we've been remarkably successful in helping our clients build their e-mail databases include:

* Free e-mail newsletters (we've been able to capture e-mail addresses of more than 50 percent of the subscribers to a monthly business magazine with a simple weekly “flash report” on late-breaking news of interest to its readers.

* Contests (we're generating more than 10,000 e-mail addresses each week for one direct marketer by entering respondents in a sweepstakes).

* Special sale offers (we've constructed a number of private “by e-mail only” sales offers for a consumer catalog; not only have they generated a large number of e-mail addresses, they've produced a profitable new revenue stream as well).

The key is to get a handle on the kind of offer that will stimulate your customers to voluntarily give their e-mail addresses to you.

E-mail vs. t-mail. In comparison to “t-(terrestrial) mail,” e-mail has a number of features that make it quite attractive. In particular, e-mail is:

* Cost-effective — figure total list and delivery cost of between $150 to 300 per M (less than half the cost of t-mail); there are no minimums; you can turn it on or off quickly, depending on actual results; plus, you can test various messages and adapt them at will — at virtually no cost — to improve response rates.

* Immediate — you can arrange for a message to be delivered on a particular day, even at a particular time. (We call this “Just in Time” marketing and are testing a variety of time-sensitive offers: “What are you doing tonight?” for a chain of movie theaters to be delivered between 4 p.m. and 5 p.m. Fridays.

* Interactive — you can invite questions and provide immediate answers; or ask questions and get immediate feedback; direct folks to your Web site; alert them to be on the lookout for your catalog or other direct mail; invite them to call you or to tune into a TV show you're sponsoring; or ask them to visit your store.

In no way am I suggesting that e-mail will take the place of t-mail; they complement each other well, and a strong marketing plan will incorporate both.

Here's a laundry list of some of the more productive e-mail applications we've explored this year:

Prospecting. E-mail is particularly effective as a prospecting medium for a well-known product or service that needs little or no explanation. Similarly, it is gangbusters for strong offers like free trials, sweepstakes premiums and strong no-risk guarantees:

* Magazine subscriptions (both business and consumer).

* Continuity club membership (e.g., book, music, recipe cards, etc.).

* Office products (pens, paper, shipping materials, etc.).

* Credit cards.

* Lead generation (for insurance and travel offers).

* Traffic building (for both retail and Web sites).

Customer retention and reactivation. E-mail can be an unparalleled tool for conducting ongoing communications between you and your customers. Results appear to be consistently solid for:

* Magazine renewals.

* Catalog sales.

* Order confirmation notices.

* Cross-selling.

* Customer reactivation.

* Special offers (e.g., magazine article reprints, “collected works,” special “old friends” discounts, etc.).

* Electronic newsletters (ongoing information, delivered to your customers via e-mail, is a great way to stay in touch).

A word about privacy. Probably the biggest stumbling block to the use of e-mail as a direct marketing medium is the fear of negative reaction. Marketers are afraid of how their customers will react, of what legislators will do, of what their friends may say. In my opinion, marketers can afford to be a bit bolder. While e-mail has become a highly politicized issue (and no one wants to be considered a “spammer”), there are some simple steps you can take to avoid that fate:

* Embrace opt-in. As I've pointed out, people like to receive commercial e-mail — if it's relevant and of interest to them. Ask the question: Can I have your permission to communicate with you via e-mail? And of course, respect their right to say, no.

* Embrace opt-out. Even after someone has given you permission to e-mail them, continue to offer them the opportunity to opt-out, to have their name removed from your e-mail database. And then make sure to follow through.

* Respect your customers. Having granted you the right to e-mail them, your customers have placed a tacit trust in your judgment. Don't abuse it. Don't allow any message to be communicated to your customers that is of questionable taste or integrity, that is in any way misleading, or is just not in keeping with what they've come to expect from their relationship with you.

Follow these simple guidelines, and you will find that e-mail just may be the best news yet for the health and welfare of your business.

Donn Rappaport is chairman/CEO of American List Counsel, Princeton, NJ.

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