This is the third post out of 3 I planned on writing this week, I hope it will tie a few loose ends.
I must say I am an addict, I love numbers and I love making a decision based on empiric data and not emotional hunch (although emotions and instincts are a powerful tool and I do listen to it from time to time).
So I’ll start with a few numbers then
Study data recently published (the “Email Marketing Industry Census “)
Shows that companies spend 1/5 of their marketing budgets on e-mail marketing – 20% boys and girls, that’s allot, a questionnaire was circulated between a group of advertisers and marketers and what surfaced is very interesting, 81% of the subjects said that they think they weren’t using this method properly and that they are not even near maximizing the potential, only 13% claimed they know how to reach satisfactory results.
Additional statistical information of the E-Consultancy’s Round table teaches us allot about many different market trends and correct use of the method, few of the interesting highlights I found:
- About 47% do not know the ROI (return of investment of email campaigns)
- More than half of the respondents (55%) claim that the ROI is 3 times positive
- About a third (32%) claim that the ROI is 5 times positive
- More than half of respondents (57%) claim that organizations in which they work in is using less than 50% of the functionality of their email systems
- Less than a third claimed that they use more than 50% capabilities
Many organizations lag behind because of the lack of ability to integrate with sales activities / marketing and other.
- Two-thirds of respondents claimed that integration exists but certainly requires improvement - from my experience this is one of the most problematic issues
- One in 10 claimed that there is no integration at all
- 12% claimed that they dealing with it
every company and every commercial entity in the internet requires an email solution, there are a few options of running an email campaign, it could be a 3’rd party solution (such as aweber, icontact , strongmail and many others) usually an enterprise software licensing model in which you pay a monthly fee + certain amount for additional modules and services, and there is always the option of developing your own propriety solution, but you all need a solution, sending and tracking the performance of each campaign you send.
The study raises many questions regarding the issue of understanding the power of the channel and the ability to leverage it for your marketing efforts, I wonder sometimes if it’s not clear how strong this channel is , I am sure that after reading my last 2 posts you understand that it’s a MUST channel? Having said that why isn’t it implemented in every company? Why companies don’t realize that good integration is imperative for success, why isn’t it implemented properly? As I mentioned over and over again in my previous post email it is a necessary tool in the marketing “toolbox”.
The ability to run this channel requires complete understanding of several “layers” I’ll try describing it very briefly (if you wish to get a more comprehensive know how, just email me)
- Characterization and construction of an intelligent system that knows how to perform the task intelligently without sending a warning for Internet providers (you know you can be considered as spammers).
- Design a system that allows Measurement & Analytics, Personalization and most important – Segmentation
- Email format, is it HTML? text?)
- easy integration
Two Significant marketing channels exist and you should consider using it both, one aspect is to acquire customers and the other for maintaining or preserving them:
- Using external email records acquired from a 3’rd party (could be done through a co-registration process and it must be with the users consent or approval , we need to make sure the users approved that a 3’rd party email can be sent to them) you can buy it or you can rent it and there are many companies that provide this service, you can sometimes contact the source and ask to rent or buy email records that are opted-in (users have given their consent) those records could have been collected through diversified channels, in this case where you don’t control the collection of the emails you should ask many questions such as how old is the list? Is it exclusive to you or is it being rented to other parties? (your competition for example), segmentation data (you would like to target certain segments that fit your product profile and not the crowd) etc. there are many companies that re-sell data over and over again, in this case you buy garbage that has been used so many times it would probably effect the conversions.
- lead generation Using leads that were collected / gathered in various marketing campaigns in, as the higher the quality the better way to match the marketing message, a quality lead usually means that more information was collected, you would agree that a lead containing a first and last name + email is not as good as a lead that contains the users hobbits , household income , place of residence and an answer to what the customer wanted in the first place, the more the merrier , it will allow you to tailor a message that fits and you would probably get higher conversions.
You can also generate those leads yourself (through ppc, co-reg channels, media buys or any other relevant channels) this way you control the all funnel and you can track and change things ultimately controlling the lead quality.
3. System auto-Responders (Automatic e-mails) – this is a very strong tool, you should try mapping all your customer “touch points”, from the minute the prospect has entered his/her details (when they became a lead) to the point where they leave you or stop buying from you , when you have this complete map you can set your email system to send them an automated email, this email can contain a message… whether it’s for buying more, up selling or cross selling another product you sell , it can be a birthday reminder/offer , a support ticket that say that you will get back to them in 24 hours , there is unlimited use for auto responders , I usually draw a “map” of all those communication points so I can customize and configure it in the system, this way I have complete control over the customer life cycle, as you can see there are endless possibilities.
Many organizations and companies today understand that in such a competitive market success depends on our ability not only by getting new customers but more in retaining them (keeping them coming back for more) “squeezing the lemon”, where ever you look you will be able to see mergers and acquisition, big companies that buy the small ones, it’s happening in the brick and mortar world and it is the same in the online sphere, consolidation is the name of the game and there will be market leaders and a long tail of companies, I know that retention is a complete science but I will try shedding some light over it, I will divide it into 2 fundamental steps:
A new company – market penetration – a new company would probably will allocate more funds and resources for acquisition to get the customer to purchase more 60% of the budget will be spent sometimes even more depends how aggressive the company is.
Company that is already active – in my opinion a company that is already established should do the contrary and should allocate more resources and budgets for existing customers (more than 60%), an excellent example of this are the cellular companies, a saturated market no doubt which reached the point where the concept of price competition hurts them (I don’t think they are poor don’t get me wrong here …) but the competition became very hard , they all offer the same service, same handsets and same promotions this is why the main competition is a price competition – who have the lowest prices (“we have a 0.5NIS per min payment plan” and “ we have a 0.49NIS payment plan” – it became a “flea market” where everyone bids less, margins are going down and the companies lose money. When talking about such competition environment most of the companies will allocate marketing budgets directly to existing customer base … memorize it people – retention is always cheaper then acquisition… So how do we use email as a retention tool?
1. Using email to communicate news, updates and important announcements
2. Send a newsletter on a daily, weekly or monthly basis (or all together)
3. Offer new products that were launched
4. up-sale – sale of complementary products after the initial purchase process, Amazon and EBAY are an excellent example of companies using smarter up selling and cross selling techniques, they use a smart algorithm that “learns” your behavior / buying habits and recommends additional products to buy based on that behavior, and they use emails as a method of communicating those cross sale and up sale offers
For example: I bought an I-pod and for a month I received emails offering me to buy discounted stereo headphones or desktop speakers, I have bought a book on Amazon about internet economics and immediately received an offer to purchase a new book on Google economics.
5. – Cross-sale products – offering “horizontal offers” – other products that might be of interest to the customer, an excellent example of this is: gambling companies using this channel in order to attract customers to one or two casinos or poker room it allows them to increase revenues and increase player value by hundreds of percent.
6. Launching Image campaigns – marketing campaigns with no sales offer but more an image brand communication such as: orange invites you to the Rihana concert
7. Sending emails to customers that are “dormant” or abandoned (Churn) – you can call it “please come back” emails This could be done through an sale offer or alternatively a personal invitation such as “we would like to give you XXXX as a gift…” at the expense of the company … The sky’s the limit (as long as the customer’s worth it ) also remember – give customers gifts that you would give to yourself!
To summarize this post, there are about 5 important principles, and you should not give up any of them:
Conceived an idea -A good e-mail starts with a good idea, hire a strategist and a copywriter or do it yourself if you are good at it – Explain to them what stimulates your customers, don’t “overload” the customer and try to make it ” digestible” as you can, it should catch the eye and be readable, Give them an incentive to read more, a call for action such as click to download the software, give them something in return for their time, always ask yourself “What would I think if I got this email”, would I delete it? Complain about it? Would I buy what the company offers?
Work with a designer –A good designer is not always a good email designer, email designers are an asset because they understand the limitations and constraints of email clients , they have vast knowledge of what people react to and how the user reacts better to your marketing message, what’s more effective (for example: many users use the preview pane option to view emails without having to open it – this has a huge impact on how the message is delivered ( I have discussed it in my last posts), sometimes the message is hidden because of constraints/rules such as the size of this preview pane window), there are many limitations and constraints Believe me, it’s not like a TV ad or a billboard ad that everyone can be exposed to the message , email clients can restrict you from seeing the all copy / design.
Find a good encoder – is important because of the mentioned limitations, you need to get a good encoder that knows how to work around different email clients, HTML emails require a programmer familiar with the work environment, email limitations, different software used such Outlook, OSX Mail, Thunderbird, Eudora, Claris Emailer, Lotus Notes, Gmail, Yahoo! Mail, AOL, Hotmail, mail.com … Each requires a different encoding, otherwise your mail will not be readable or will get “distorted” both textually & visual.
Setting goals and objectives – always… always define campaign/email objectives, how many customers you want to acquire, how much sales would you like to generate etc… You can’t send a campaign with no clear goals! You would be wasting your time.
Monitoring and analysis of results – one of the most important elements in any marketing campaign is tracking, monitoring and analyzing the impact of each campaign, create a smart mechanism for learning, getting the feedback is important that will enable us to achieve the best results, feedback control mechanism that will allow you to learn from your mistakes and implement better techniques.
There are varied channels of action, we “meet” the customer and we know when we want to talk to him at eye level, one on one … The more creative we will be the more we would benefit, we can’t allow ourselves to not use this channel, as I said before … this is one or the most important direct marketing channels … direct marketing is the ultimate way to have your message out – it is one of the most personal ways to interact with your customers – remember that.