‘Send to a friend’ catches on

An email marketing message does not have to be a one-to-one communication between brand and customer. A ‘send to a friend’ button on an email message gives it the potential for viral distribution.

Learn from social networks

Communities within social networks can be used to identify trends in a market or changing consumer requirements. For instance, uSwitch has set up a community to discuss utilities issues.

Customer reviews

Email can be used as a trigger for customers to become endorsees by rating and reviewing products, which can then be posted on a branded site or member community.

Participation

Email can be used to encourage consumers to take part in promotional activities. For instance, LG has been publicising its camera-enabled phones by encouraging consumers to upload pictures to its LGLoop site.

Brand advocates

Email-advocacy strategies, such as ‘forward to a friend’, can be fuelled by incentives. This could involve special offers, or more detailed information on the brand for those who act as advocates.

SMS add-on

Text messaging can be a useful complement to email campaigns, but it is seldom used. However, airlines are now following up email activity with text messages on the day of travel.

Using IM

Instant messaging is now being used in tandem with email. Customer support benefits from it most because of the two-way nature of the technology.

Dynamic newsletters

The recipient receives a full newsletter, but the content is tailored to their preferences, with the most relevant articles at the top or featured prominently.

Tracking technology

By tracking and analysing where customers go on a site and what they do, it’s possible to extrapolate their interests and target accordingly. This is happening more with the emergence of behavioural-targeting techniques.

There was a time when email was the all-conquering communications tool of the internet age. While the web was primarily for publishing information, email was about interaction between friends and colleagues. It’s also a very personal channel, and that makes it hugely attractive to marketers looking for that one-to-one link with their customers.

But times change. Google Wave, which combines email, instant messaging and wikis, is being hailed as the future and in the light of a recent report, email’s iron grip on internet communications has been loosened. In March, Nielsen announced that social networks had overtaken email in terms of worldwide reach. According to the stats, 67 per cent of the internet population uses sites such as Twitter, Facebook and MySpace, while 65 per cent uses email.

We’re not talking about the death of email, with social networks holding the smoking gun. The two channels are complementary, and chances are that those who log on to Facebook as part of their daily web routine are also scrolling through their inbox. Nevertheless, much of the communication between friends has moved into social networking.

Yet email marketing continues to defy these trends. Research in the Email Marketing Platforms Buyer’s Guide 2009, compiled by Econsultancy, finds that marketers spend about 14 per cent of their digital-marketing budget on email and that spend will grow by 15 per cent in 2009, compared with the previous year.

Retention and growth

For Nick Gold, managing director of Emailvision, growth is down to one compelling fact – “email marketing delivers a measurable ROI”. But Archna Trivedi, account director at Epsilon, says that email marketing’s growth has more to do with it becoming an important retention tool than for sexy new ad campaigns. “Acquiring a customer can be six or seven times more expensive than retaining a customer,” she says. “Email allows brands to maintain a relationship throughout the customer journey.”

For instance, to drive conversions, a company might use email to target offers to customers who have registered on a site and expressed an interest in a certain product. In the case of existing customers, email can be used to cross-sell and generate loyalty by offering discounts. And for lapsed consumers, email can be used as a prompt to win them back. “You might send a message with ‘We’ve been missing you’ on the subject header,” says Trivedi.

Successful email marketing requires a significant amount of planning and smart execution. In an ideal world, the arrival of a promotional message in a consumer’s mailbox should be an occasion for unparalleled joy on the part of the recipient. In the real world, that consumer is likely to press the ‘delete’ or ‘report spam’ button rather than opening the message.

This resistance to promotional emails stems partly from concerns about unsolicited ‘spam’, but even consumers who have opted in to receive marketing messages often turn red with anger as they struggle to find meaningful emails among a bucket of promotional messages. Most of us get a lot of emails, and scrolling through a series of newsletter links is not a priority.

So the challenge facing email marketers is to create campaigns that inspire recipients to open them, and it’s a challenge that gets tougher all the time. As Felix Velarde, managing director of Underwired, observes, the guiding principles of successful email marketing are “relevance and timeliness”. In other words, if you can target consumers with the information they want, when they want it, the chances of a positive response are much higher.

Those guiding principles have seen a significant shift in the focus of email marketing over the past few years. These days, few major brands send the same newsletter out to everyone – despite the fact that this approach can deliver ROI. So-called ‘mass-blast’ emails are cheap, so even a relatively low response rate can nonetheless deliver enough sales to hit the middle manager’s budget. However, by tailoring the message to the recipient, ROI can be pushed up significantly.

In 2007, uSwitch sent out one newsletter a month. But as the company expanded its operations to cover personal finance and insurance products, it launched a second newsletter focusing on money, before ultimately introducing a weekly campaign with each communication focusing on a particular topic. “As a result of that, revenues increased by 64 per cent,” says Simon Hills, direct marketing manager at uSwitch.

Since then, the company has introduced further innovations, including messages triggered by key events such as the renewal dates on insurance policies. It has also made a point of asking customers to tell them the type of information they’d like to receive. This research has been used to make uSwitch’s campaigns more relevant to individuals. As a result, “we’re continuing to see revenues and response rates rise”, says Hills.

Correct data is vital

Information is key to a targeted email campaign. “Before you start targeting you have to make sure you have the right data.” says Emailvision’s Gold. For instance, a typical strategy is to break down the customer base into sub groups or segments, each of which receive ‘relevant’ communications tailored to their interests. Those segments might be based on what customers bought in the past and what they may buy in the future. Transaction records are usually the starting point, and if you are talking about repeat purchases such as CDs or books, then this kind of historical data provides a good indicator of future activity.

However, if a customer buys a digital camera in May and a printer in June, that does not necessarily provide any clues as to what he or she will purchase in October. One way forward is to ask customers what they are interested in. Some people do not respond to questionnaires but there are other ways to predict future behaviour. “Web analytics is playing an increasingly important role,” says Velarde. “By listening and learning about what your customers are interested in you can collect data on their preferences and feed it back into the database.”

People tend to respond well in social media environments. “Email is a one-way channel,” says Benoit Cacheaux, client services director at Publicis Modem. “On the other hand, social media is a great way to create a genuine dialogue about the brand.” With that in mind, Cacheaux is looking at ways to create links between the two channels by encouraging email recipients to enter into discussions on online forums.

This link between private email and public space is also being explored by Argos. “We have been sending emails to customers asking them to review the products they have just purchased,” says Dan McKinnon, business development director at eCircle, the company behind the campaign.

Keep it relevant

With the age of Google Wave on the horizon and social media creating a buzz, it’s clear that email marketing is not at the sexy end of digital. But if brands want to retain customers it’s essential.
Email marketing still has a point. It is ubiquitous and if the consumer has shown interest in a brand then it can be relevant and compelling. This is why retaining customers with relevant emails – rather than spamming them with promotions they might be interested in because they are part of a certain demographic – represents the future.

Smart think!ng: Email marketing

1. Break down your customer database into segments and tailor your message for each one

2. Ensure your branding is consistent. You may have a different message for each of your customer segments, but the brand image and values should be a constant

3. Check that your database is clean in terms of current email addresses and accurate customer information

4. Find out what your customers want by asking which particular products interest them most

5. Use triggers. Events such as birthdays or insurance renewal dates can be used for reminder emails

The DMA estimates that marketers gain $45.06 (£28.28) in ROI for every dollar they spend on email campaigns. Email marketing is fast, cost-effective and measurable. These are all critical to marketers as the global economy endeavours to climb out of a serious recession.

Along with the increase in multichannel marketing, brands must focus on the foundations of email. Marketers are still seeking cost-effective, simple and scalable strategies to keep subscribers engaged and drive revenue.

It helps to engage consumers early in the process with welcome programs and reminder messages can be used for promotions. It’s also important for marketers to say ‘thank you.’

Marketers need to find the right balance between promotional content and engagement. A move away from the same old promotions to more engaging content gives people a reason to become fans of your brand.

Mike Hilts is the president and general manager of Yesmail

At the top level, there are four basic groups – two that consist of those who engage with the brand, and two that comprise consumers who neither buy McCain products nor make purchases in that food sector.

The key distinction is that ‘engagers’ respond to promotions, while ‘non-engagers’ do not and must therefore be targeted with links to interesting content.
Tracy Blundell, brand communications manager at McCain Foods, says: “The current segmentation model is built essentially on behavioural and attitudinal data, both of which are gathered via email surveys.”

Other consumers’ buying behaviours and demographics have been gathered from third- party lifestyle databases to add more information to the mix.

Campaign success is measured by email open and click rates. But, at a higher, more strategic level, McCain has a model called ‘Love and money’, which measures increased engagement with the brand through the frequency and recency of responsiveness to online communications.

It also tracks how that change in behaviour translates to increased levels of spend and buying over time. “The way we would measure and track this change would be through the online survey, using the same buying-behaviour questions used to create the segmentation,” says Blundell.

McCain sees email as a nudge rather than a push device aimed at encouraging consumers to find relevant content. “We ensure that email is therefore a very integrated online activity which fits the participation marketing model,” says Blundell.