Email Strengths and Weaknesses
Email marketing continues to grow unabated despite the down economy. Companies use email for retention, acquisition, PR and BtoB lead generation.
But due to its low costs, marketers tend to overuse it or underestimate the creative and marketing skills required to make it work.
To provide greater depth of understanding of this maturing and effective medium, I have asked email specialist Reggie Brady for her perceptions about the strengths and weaknesses she sees in this medium.
Reggie Brady, President of her own consulting firm, immersed herself with the Internet and email at the beginning of the medium’s commercialization working as a lead marketer for CompuServe. She has since developed into a high demand consultant, speaker, teacher and writer representing her own e-marketing and direct marketing consultancy.
As a leading authority on the Internet channel, Reggie brings an extensive background in interactive and direct marketing to her practice. She helps companies build, execute and analyze their customer acquisition and retention strategies both online and offline.
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Thank you Reggie for agreeing to this interview. I thought we would concentrate your questions in the area of email marketing.
Question: What primary marketing function does email play in most companies today?
Email is an important communication and engagement tool and sales driver, particularly when emails are sent to a marketer’s own house list. I think of email as a “workhorse.” It is relatively inexpensive to mail and when used properly it is a way to engage customers, provide updates on new promotions/products/services and drive site traffic and sales.
The Direct Marketing Association recently reported that the email channel provides the highest return on investment (ROI) of any other channel. In 2009, for every dollar invested in email the ROI is $43.22. The second highest ROI is from search, although at $21.85 it is almost half of email’s ROI.
My take:As you specified, the key is that these results are based on going to the “house file” rather than an outside rented list. Email definitely yields some of the best ROIs of any medium. One should expect great ROI, however, going to a house file regardless of the medium used. There is an open question as to whether email can make money with names the company has no established relationship or previous contact.
Question: You are asked to review or audit a lot of corporate email marketing programs. What are the top three areas where companies tend to lag when it comes to fully leveraging the medium?
The first is that many companies do not have a segmentation strategy. Instead, they “spray and pray” by sending the same messaging to each individual on their list. It is vitally important to be relevant to recipients and without relevance companies see declining open rates and click-throughs. The best segmentation strategies are multi-pronged and take into account profile data, click-through interests and actions a recipient has taken on the site.
I’d say the second pitfall is that email is used in a vacuum. It’s important to orchestrate the use of email along with other marketing initiatives. If a company is sending a catalog or postal mail to an individual, send an email to pre-announce the mailing. If a company has launched social media efforts, be sure to promote your presence in emails.
The last area is finding the appropriate cadence and frequency for emails. Too many marketers are sending too many emails each week, and what’s worse – there’s no real differentiation between messages. Of course, it’s important to have promotions to stimulate sales; but more recently I’ve seen some marketers developing a once a month newsletter that includes value-added content. This is a great way to stand out in the inbox and engage customers.
My take:The first essential gross segmentation is to email to past customers. The next segment goes to past inquirers or some group of people who have experienced some touch point with the advertiser. As Reggie recommends, reinforcement of touch points with offline media is critical to improving sales penetration in your targeted segments.
Segmentation goes far deeper than just splitting your names between gross segments. The process divides lists by past purchase behavior, recency and volume and almost endless number of factors and then matches products and pricing that appeal to each specific small group of individuals. And today, we create emails based on algorithms that vary offers at the individual level. This makes the emails relevant and dramatically increases response.
Question: When comparing snail mail and email, what are the similarities and differences marketers should be aware of?
I like to say that email is “faster, cheaper and better.”
Faster response time – with direct mail you begin to have projectable results about three weeks after a drop. And, with email results are projectable within hours. To capitalize on this factor, conduct offer or subject line testing to a portion of your list and rollout with the winner.
Cheaper – maybe I should say less expensive! Direct mail is expensive and the average cost in the mail is likely to be in the $1.25 per piece range. In comparison, email to a house file is fractions of a penny with many marketers paying $4 to $6 per thousand.
Better response rates – With postal mail response rates are often in the 1 to 2% range. Email responses are in the 3 to 10% range. However, a direct mail response is usually an order while email responses are a click-through to the website. Yes, there is an interaction with the email, but your landing page must do the “heavy lifting” to motivate the individual to take a further action.
Question: From a direct marketing creative perspective, what are the differences and similarities between the two media?
Question:What are the strengths and weaknesses inherent with the email medium from a marketer's perspective?
Strengths – speed and immediacy, low cost, proven ROI, easy to personalize, and easy to test. In addition, most email service providers now offer the ability to use advanced techniques such as dynamic personalization and triggered messaging which arm the marketer with tools to increase relevance. My favorite example of a triggered message is an abandoned shopping cart email. Today, between 50 and 60 percent of shopping carts are abandoned. A triggered message that allows the shopper to pick up where they left off will recapture sales that would otherwise have been lost.
Weaknesses – email looks relatively simple, but it is surprisingly complex. Deliverability issues, changing ISP “rules” and rendering problems are part of the equation. It is still not easy to integrate offline and online data and email analytics are often cumbersome for marketers who really want to embrace a segmentation strategy.
Question: What are some of the tactical recommendations you would give to those in charge of marketing programs for such things as html versus text, email frequency, copy length and calls to action?
Oh, the list of tactical recommendations could go on and on. Let me share my top 8:
Make sure email sign-up is on almost every page of your website. Today, about 50 percent of your site visitors are likely to enter your site on a page other than the home page – particularly since search engines are likely to drive a lot of your traffic. So, you’re missing an opportunity if you don’t make email sign-up prominent and visible on most pages.
Never use Cascading Style Sheets (CSS) to develop your HTML. They are sure to cause many rendering problems and your email will not look the way you planned. Hand-code your templates and be careful about nested tables.
Take advantage of the pre-header, which is the area above your email template. About half of your recipients are likely to have their preview pane enabled and will see the beginning of your message. Use a “snippet” or promotional text to call attention to your offer – often companies will play off their subject lines. And, make sure you also include a “click here to view” option in the event your email does not display properly.
Pay attention to subject lines. Too many marketers spend all their time and attention crafting the email itself and fill in a subject line at the last moment. Subject lines are critical to driving open rates.
Find ways to make email an interactive experience for your members. Ask them to post a review, enter a contest, or take a poll.
Consider using both buttons and text links for your calls-to-action. Use warm colors for your buttons such as orange or red.
Organize your content so that it is easy to scan. Your recipients will not read every carefully crafted word. Don’t use long paragraphs. Do use headlines, subheads, and bullets.
Give readers enough to care, but have them link to your site for the full story.
Question: If you could change one thing companies don't get about email, what would it be?
Using the tools available to segment for relevance.
Question: Are there any other thoughts you would like to leave with us?
The exercise I am proposing here takes work, but it will stand you in good stead and allow you to understand how important email is to your company. Calculate the value of an email address. For example, the DMA estimates that an email address is worth $44 and Shop.org estimates that an email address is worth $121.
To do this exercise you would need to establish a full P&L for email and look at either the lifetime value or at least a 3-year value of an email address. Once you have taken the time to do this, you can also evaluate various sources of email addresses such as those who signed up on your site, co-registration names, appended names, etc.
Thank you Reggie for a great interview. I suspect you will stimulate new thinking for the email marketers out there. You may contact Reggie by phone at (203) 838-8138 or or email her.