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MEDIA ADVISORY
E-Mail Is Growing Up - Fast
E-mail marketing is no longer in its infancy. It is flying through the toddler stage, and like a toddler, it shows amazing potential while growing and experimenting. And while it is bound to take some pretty goods spills along the way, there is little doubt as we enter 2002 that this medium is fast growing up to become an essential way for businesses to reach customers and create relationships. In fact, according to a recent study by Winterberry Group, e-mail marketing expenditures are predicted to grow at a 41% annual rate, reaching $3.5 billion in 2005.
As president of precision e-mail marketer e-Dialog, John Rizzi helps guide the growth of this electronic communications prodigy for such organizations as the NFL and Charles Schwab, surveying questions and reactions to what works - and what doesn't. Here are some of the key issues he has identified from both companies and consumers at this critical stage of e-mail marketing:
What can you say in a subject line to make customers click through?
The challenge with subject lines is that you need to attract the e-mail recipient's interest using a very limited number of words. It's a good idea to test at least two subject lines for any campaign. The most important thing is that the subject line makes it clear that your message is personally relevant to the recipient. It's better to be specific than vague. So, instead of saying "Information You Requested," it's better to lead with "Information You Requested About Acme Inc."
As in any direct marketing initiative, stay away from generic, overt sales pitches and at least touch on the benefit the recipient will receive. Instead of "Free Trial Offer," say "E-Mail Marketing How-To Guide" or "Valuable Information for E-Marketers." An effective method used above is to categorize the purpose of your message at the start of the subject line. Finally, a clever or witty subject line can go a long way towards getting people to click through and read your message.
As an aside, "Free" and other overly promotional-sounding words are good to stay away from in e-mail subject lines. When people see those in their inbox, they have been conditioned to immediately associate them with unwanted spam e-mails.
What are average click-through & conversion rates for e-mail?
Here's some specific data from the research service eMarketer on click-through rates for e-mail vs. other media (May 2001 study):
| Permission E-Mail |
3.2% |
| Direct Mail |
1% to 1.5% |
| Banners |
0% |
Here's some more recent data from Jupiter Research on how click-through and conversion rates differ between acquisition and retention campaigns (October 2001 Study):
|
Click-through rate |
Conversion rate |
| Acquisition |
5% |
2% |
| Retention |
8% |
3% |
While different sources' estimates vary, these numbers are in the ballpark for what we see with clients. Keep in mind that click-through and conversion rates will vary significantly depending on factors such as whether you're communicating with existing customers or unknown prospects, and also how compelling your message/offer is.
What's the best frequency for sending e-mail?
This is a tough one to generalize on, because the right frequency depends a lot on the nature of both the content of your e-mails, and your relationship with your audience. For example, people are happy to receive daily e-newsletters or stock updates that they have chosen to sign up for, as long as those e-newsletters continue to provide valuable information to them. On the other hand, daily e-mails from a retailer or vendor would in most cases NOT be the best way to strengthen the relationship with the customer!
In a transaction-oriented environment, messages should be timed around buying or decision periods, so consider the frequency of those purchases or transactions. It might make sense for an office supplies retailer dealing with office managers who place weekly orders to send weekly e-mails highlighting the current specials. For an apparel retailer, however, the appropriate frequency might be monthly, or even seasonally.
On top of these "frequency" messages, you should always consider sending an e-mail shortly after a purchase, which can include more information about the product purchase and/or suggestions and offers for related products. If done well, nearly all customers appreciate these kinds of messages.
Of course, the best way to determine the frequency of your campaigns is to ask your recipients how often they would like to receive your e-mails!
How can I improve the targeting of my messages?
There are two keys to successfully targeting your e-mail communications to maximize response: 1) Knowing what your audience wants; and 2) Testing, analyzing results, and refining your targeting based on what you learned.
To know what your audience wants, the easiest way to find out is to ask them. You can question your audience directly about their preferences through online registration or enrollment forms. This gives them the opportunity to tell you exactly what type of content they want to receive, how they want to receive it (e.g., plain text or HTML), and how frequently they want to hear from you. You should also capture and integrate behavioral data - such as clickthroughs and purchases - for each one of your customers so that you can target additional content and offers based on their inferred interests. All of this data, both explicit and implicit, will help you create comprehensive customer profiles that can be refined over the course of your relationship with each customer. Once profiles have been established, you can begin to craft messages based on each customer's known needs and interests. As a result, each member of your audience will receive more precisely targeted e-mail communications.
The second key - a rigorous process of testing, analyzing, and refining - is a disciplined approach that has been time-tested by direct marketers. Before launching any campaign, make sure that you have the proper tracking mechanisms in place to gauge campaign success, and always aim to include at least one test variable in any campaign you send out. No e-mail campaign is a success unless one of the results is increased knowledge about what works and what does not.
How effective is HTML vs. text e-mail?
In general, the response rates for HTML messages are significantly higher than the rates for text messages - often achieving a 50% higher response or greater - although this is a broad generalization. In some cases, we have seen clients whose response rates decline when they switch from text messages to HTML.
In particular, with B2B campaigns you need to be careful about sending HTML e-mails. Two specific groups we've run into that clearly prefer text messages over HTML are 1) "road warriors," who don't want to spend any more time than necessary dialing in to get their e-mail; and 2) "techies"/engineers, who tend to prefer messages with less glitz and sizzle. Our recommendation is that you give people the option to choose which message format they will receive when they opt-in to receive e-mail from you.
How well does e-mail work for conveying complex messages?
For particularly complex messages, such as complicated products or services, we've found that the best option is to avoid giving too much detail in the e-mails, but instead to provide enough information to whet the recipient's appetite, with links to more detailed information on a web site. This works best when the links are not just to the home page, but to more detailed topic-specific sections of the site, so the reader can go directly to the topics they're most interested in learning more about.
Is it worth using e-mail to drive traffic offline (e.g., to stores or call centers)?
As far as driving customers offline to make purchases, we have clients who regularly used e-mail to encourage customers to visit stores or to call 800 numbers. In general, we have found that the best response rates are achieved when less work is required of the recipients. Diverting them to offline contact points usually reduces response IF the purchase transactions could be initiated on a web site or from the e-mail itself. However, complex products often necessitate human interaction to complete a transaction, and e-mail can be an effective way to initiate those kinds of discussions.
When encouraging store-based transactions is the goal of an e-mail campaign, several of our clients have achieved success by using e-mail to distribute printable coupons, which are only redeemable at retail locations.
What is personalization and how does it work?
Personalization describes the set of techniques and technologies used to vary the content and format of e-mail messages from one recipient to the next, with the goal of making each message as relevant as possible to each individual recipient. Basic techniques include format optimization (sending text or HTML based on a user's browser capability), personalized salutations ("Dear Mary"), and content targeting based on list segmentation. However, for optimal effectiveness, you should consider more advanced personalization strategies.
Truly personalized e-mail communications contain unique, dynamically generated content based on individual customer profiles. In order to achieve this level of personalization, you need to begin gathering both explicit and implicit information about your target audience. Technology can help you collect a wealth of customer data, including clickthroughs, purchases, and responses to individual campaigns. You can also ask your customers about their preferences directly, via online surveys and registration or enrollment forms.
Once this information has been compiled, dynamic message generation technologies can be used in conjunction with content rules to personalize entire segments of content and to target offers directly to your recipients' needs and interests. This helps to build a highly personal relationship between you and your customers by ensuring that they receive the information they want to receive.
Is the cost of personalization worth the payback?
Yes, personalization is extremely effective in improving the results of your e-mail marketing campaigns. e-Dialog clients who are using e-mail as a promotional vehicle have experienced response rate increases of 100% or more when offers or product selections are personalized - all a result of increased content relevance to the message recipient. Such increases in response rate easily justify the increased cost of setting up a personalized campaign. It is harder to quantify the payback on personalizing non-revenue generating communications such as informational newsletters, but the increases in subscriber retention rate and customer satisfaction often provide the necessary justification.
Aside from renting lists, how can I grow my e-mail database of both new and existing customers?
The best way to grow your e-mail database is to provide value through your e-mail communications that is not available elsewhere, and to leverage all of your existing customer communications points to promote this value. For example, you might announce special offers or distribute coupons via e-mail that are not available elsewhere, and you might promote the benefits of opting in to your e-mail program in your stores, catalogs, website, advertisements, through other collateral, or through your phone representatives. For retailers, several have had great success by enabling e-mail program opt-in at the point of sale.
Viral marketing is one of the cheapest and most effective ways to add names to your e-mail database. Viral technologies such as e-Dialog's Forward-to-a-Friend are specifically designed to help you grow your list - by providing your customers with a way to forward e-mail messages to friends who they know would be interested. Those who receive Forward-to-a-Friend e-mails then have the ability to easily subscribe to your e-mail list.
In order for viral marketing to be successful, you need to be clear and bold about asking for your customers' help. Put Forward-to-a-Friend in every e-mail communication (of course, use good judgment -- unsubscribe confirmations are not a place for this!). Many marketers make the mistake of burying Forward-to-a-Friend links in the footer of their messages. If you are serious about trying to grow your list, make the Forward-to-a-Friend suggestion much more prominent, and consider providing incentives to those who do forward your message.
A final method for growing your e-mail database among existing customers is to append e-mail addresses to your database of customers' offline addresses. Services exist to perform this matching process for people who have indicated a willingness to have their e-mail addresses matched in such a manner. Unfortunately, match rates are often quite low, but the process is still worth testing. The success rate often depends on the specific makeup of your customer base.
How can I keep my e-mail database up-to-date?
In today's world, where job mobility is the norm, e-mail addresses change quite frequently. According to a study performed by NFO, 32% of consumers change their e-mail addresses each year. It makes sense to ask your customers to update their contact information on a regular basis, whether via e-mail, snail mail, or another method of communication. That way, if customers know that their contact info is going to change in the near future, they can update you with their new address ahead of time.
For e-mail addresses in your database that have already become obsolete, you may want to engage the services of an E-Mail Change of Address (ECOA) company that specializes in tracking down new e-mail addresses. e-Dialog maintains a partnership with leading ECOA provider Return Path, which asks consumers to register their e-mail addresses on the Return Path website. When those addresses change, Return Path will notify companies of their new address. E-mail change of address services, such as Return Path, claim a 20%-25% success rate in reconnecting you with your customers.
What metrics should I be tracking in my e-mail campaigns?
One of e-mail's biggest advantages over traditional direct mail is its measurability. Within just a couple of days of deploying an e-mail campaign, you can determine how successful it was by analyzing open rates, click-through rates, conversion rates, forward (or pass along) rates, unsubscribe rates, and ROI. However, while you should measure all available metrics, some are more valuable than others.
Click-through rates are the place where most marketers start, and this data is valuable for evaluating the placement and attractiveness of your offers. You may learn that certain offers perform better than others, or that offers near the top of the e-mail are clicked on more often than those at the bottom. However, too many marketers rely on click-through reports to determine the overall success of their campaigns, even though clickthroughs alone represent very little value to the performance of their marketing programs. Conversion data - the tracking of each purchase, download, registration, etc. - from a given campaign is the real key to calculating the true return on a marketing investment. A technology such as e-Dialog's ConversionTrackT makes this process simple.
Using conversion data as the foundation, marketers can then build a framework to weigh each potential conversion relative to one another. For example, an e-mail marketing program may be trying to drive website visits as well as sales. If the first mailing generated $50,000 in sales and 10,000 site visits, is it preferable to the second mailing, which generated $60,000 in sales but only 6,000 site visits? The answer depends on how the marketer values each response.
Open rates provide meaningful measures of how successful your subject line was in enticing recipients to open your e-mail - but only if your campaign contains a significant number of HTML messages. This is because it is not possible to track open rates for plain text messages.
Finally, unsubscribe rates are always worth tracking closely. If you see an up-tick in your unsubscribe rates, it may signal that either you are sending e-mails to frequently, or that your content is not meeting the demands of your recipients. On the other hand, high message forwarding rates are usually a signal that you're getting your content right!
John Rizzi can be reached at jrizzi@e-Dialog.com
e-Dialog is the innovator in precision e-mail marketing services that help companies establish powerful, two-way relationships with their customers and prospects. From offices in London and Lexington, Massachusetts, e-Dialog's team of experienced direct marketers manages every phase of an e-mail marketing program, including strategic planning and creative design, list acquisition, campaign execution, inbound response management, and data analysis. The company's precision-based approach takes permission marketing to the next level, combining award-winning e-mail marketing expertise with responsible use of proprietary personalization and custom publishing technologies to deliver highly targeted communications for world-class e-Dialog clients such as the NFL, Harvard Business School Publishing, Doubleday, Schering Laboratories, and many more. Investors include OneLiberty Ventures, Commonwealth Capital Ventures, and the Interpublic Group of Companies (NYSE: IPG). For more information, visit www.e-Dialog.com or contact Jim McNulty at jmcnulty@e-Dialog.com, 781-372-3326. |
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