Increase Customer Conversation with Targeted Email Marketing
by Melisa LaBancz-Bleasdale
In the nascent days of the Internet, a sort of collective epiphany flooded the enterprise landscape: email could be utilized for far more than corporate correspondence. It is widely believed that the dot-com days saw the emergence of the firstever email marketing campaigns- heavy-handed mass broadcasts that amounted to little more than quests for volume. Marketing teams simultaneously came to the conclusion that the Web, a beacon of promise poised to change the world of business, was also a cheap and easy method for mass broadcasting to the highest number of people, in the shortest amount of time. Massive lists of unqualified targets were bombarded with thousands of one-size-fits-all messages aimed at generating page hits. Tracking the resulting website click through was less important than getting the hit. "People didn't get it immediately," states Luis Rivera, CEO of J.L. Halsey. "Email started out as more of an acquisition vehicle-certainly not permission- based in the beginning-and we all saw where that led."
"Email started out as more of an acquisition vehicle-certainly not permission-based in the beginning-and we all saw where that led." -Luis Rivera, J.L. Halsey
Email Marketing Evolves
Today, email has become one of the singularly most effective and streamlined marketing tools in the enterprise arsenal. A December 2006 survey of marketing professionals by Datran Media Corporation found that 89 percent of respondents intend to use email as a means of customer acquisition, while 55 percent saw it as a way to drive incremental revenue. According to eMarketer, in a report titled Email Marketing: Getting Through to Customers, the estimated spending on U.S. email marketing will reach nearly US$1.5 billion in 2007.
Rivera believes that the evolution of email marketing has been a direct response to complaints about spam volume and the prevalence of unsolicited messages. David Daniels, vice president and research director at JupiterResearch, Inc., explains that while technology has accelerated the rate at which organizations can be empowered to better understand their audience and clients, the notion of targeted email marketing is not new. It is just becoming more transparent to the end consumer. "Over the last several decades, there has been a long history of renting and brokering customer list data for offline direct marketing," says Daniels. "Sometimes marketers fail to see the value in a customer relationship and exploit that. That exploitation is without any strategic foresight and is quite opposite of what email marketing technology can empower, which is a richer contextual relationship and experience between the brand and the consumer. Targeting equates to listening and reacting to the customer."
JupiterResearch found that consumers prefer (and react to) relevant and targeted content, but shun broadcast marketers that fail to identify the customer relationship,within the context of that brand's dialogue with them. Daniels adds that the top reason consumers unsubscribe is irrelevant and too frequent content. "One size doesn't fit all. Nor do we need to go to the extreme that implores a constant one-to-one dialogue- as that isn't always required to maintain a lasting relationship. As consumers, sometime we desire both broadcast and targeting and as a marketer, sometimes both are appropriate tactics. However, documented consumer behavior and case studies of marketers that have been analyzed show that both approaches prove targeting generates more revenue and can be more profitable than mass marketing."
The Power of Permission
Building a targeted email campaign begins with a finely tuned recipient list of individuals who have expressed in some way, their desire to receive information. Permission is the key differentiator between email campaigns designated as spam and those that reach its intended recipients. "Now that digital marketing has become so ubiquitous and everyone has a website, it's easy for companies to capture email addresses (with permission, of course) through white paper requests, product demo requests, etc.," says Rivera. "Once companies started building these lists of people who actually wanted to hear from them, email ROI (return on investment) started going through the roof-precisely because those companies were able to deliver messages that were relevant." According to Rivera, permission-based email marketing delivers a higher ROI than other marketing channels. The October 2006 Power of Direct report by the Direct Marketing Association notes email ROI is US$51.45 per every dollar spent. The same report found that non-email Internet marketing resulted in an ROI of US$21.08 per dollar spent.
Rivera emphasizes that for an email campaign to be effective, email marketing really must be permission-based-a central tenet of email marketing best practices. He adds that marketers have a responsibility to be transparent with their opt-in process, need to tell subscribers exactly what to expect in terms of content and frequency, as well as stand by the agreement without deviation. "If marketers deliver on those promises," counsels Rivera, "subscribers will trust them and they'll build brand loyalty."
To capture a customer's attention, Daniels suggests that marketers embrace a cocktail of deliverability best practices to improve message disposition. "Marketers have to understand their subscriber behavior," advises Daniels. "If subscribers are not engaged, or worse, those accounts lie dormant, it accelerates the path to spamdom." Daniels recommends purging unresponsive subscribers from their lists if attempts at reactivation fail.
Savvy marketing involves a blended approach to customer outreach that takes advantage of various marketing channels and leverages the success of each. "The key is not to think about email marketing as a separate silo, but to integrate it with all other marketing channels," explains Rivera. "When everything works as a holistic approach to marketing, overall conversion rates rise."
Ignoring the Gold Mine
According to JupiterResearch, 93 percent of companies are doing some form of email marketing. However, even with the specificity of collection mechanisms and the mountains of data gleaned from customer interactions, few marketers harness that information in a meaningful way. Jupiter found that only 29 percent of marketers monitor click through behavior in email newsletters. The rest, declares Daniels, essentially embrace the notion that it is okay to speak to a wall, and continue to email the unresponsive target without respecting or understanding their engagement. "Most marketers fail to stop speaking to customers even when the customer shows no sign of life." A recent JupiterResearch survey asked marketers what actions they take when subscribers are unresponsive (i.e. no opens or clicks); 37 percent responded that they continue to email them with no change in frequency. "A lack of concern for the customer's desire for privacy is counterintuitive to responsible marketing," believes Daniels. "While knowing more about your customers brings a much higher level of responsibility, not caring to know about them is egregious." MB/TMP