E-mail adds extra string to your bow
Two recent studies expose the pitfalls of e-mail marketing. The first claims that nearly half of all retailers fail to comply with the most basic legal requirements, and cites retail chain Office as the biggest offender when it comes to good practice.
To be fair, no-one comes out of the study smelling of roses, with the best performer -Topshop – only scoring 86.5 against an index of 100, judged across 20 criteria. Many claim this is because the majority of e-mail marketing campaigns are handled in house by brand owners.
And, according to the latest national client e-mail marketing survey – conducted for DMA (UK) – e-mail marketing has yet to reach its full potential as part of an integrated campaign. Tell us something we didn’t know… Of course, e-mail hasn’t fulfilled its potential – far too many companies still use it in isolation, simply because it has been sold as a cheap alternative to direct mail. Just because you have all those opt-in e-mail addresses doesn’t mean you have to use them.
Funnily enough, consumers are already getting rather miffed about being bombarded with e-mails – highlighted by the fact that response rates are down on last year.
So, what’s a company to do? If you believe the findings of the DMA report, e-mail works best when linked with direct mail – afact which is likely to send Royal Mail into ecstasy – followed by e-mail and telemarketing. Also, e-mail marketing budgets are set to rise further.
But one note of caution. Years ago, direct mail was seen as the panacea for cold prospecting. It made a lot of people a lot money and was one of the things that turned direct marketing into a multibillion pound industry.
Strangely enough, this practice has also created public loathing, especially now that the environment is top of the agenda. Do you really want to repeat this scenario by over-using e-mail?
Charlie McKelvey, editor, Precision Marketing, St Giles House, 50
Poland Street, London W1F 7AX. t 020 7970 6243,
Get up close and personal
Response rates to marketing e-mails are up to ten times higher when they are personalised. But marketers should ensure that they are acting within the law. By Martin Croft
The latest estimates from specialist research agency The Radicati Group are that global e-mail traffic totalled 196 billion messages a day in 2007. By 2011, Radicati says, this will increase to 374 billion messages. In 2007, 63% of the world’s e-mail traffic was consumer e-mail messages, and Radicati expects this to remain constant over the next four years. Corporate messages accounted for 37% of traffic in the same year, while spam made up 75%. Radicati predicts this figure will increase over the next four years to 82% in 2011.
How wrong Microsoft founder Bill Gates was in 2004 when he told the World Economic Forum/ “Two years from now, spam will be solved.”
Significantly, that same year Dr Robert Horton, then acting chair of the Australian Communications Authority and chairman of the International Telecommunications Union, told the ITU: “We are facing a global epidemic which can only be combated through a global and concerted action. The protection and preservation of the Net, as we know it, is at stake.”
Well, they were wrong. While undeniably a nuisance, spam has so far failed to kill off the Net, and e-mail continues to deliver as a marketing medium. Chris Combemale, chief operating officer of e-mail automation software provider Emailvision and chair of the Direct Marketing Association UK’s e-mail marketing council, suggests this is because: “The consumer genuinely understands the difference between legitimate e-mail marketers and their fraudulent counterparts.”
Spam is a problem, but that does not mean consumers want a blanket ban on marketing e-mails, says Andrew Robinson, managing director of e-mail marketing software provider Lyris UK. “We need to give consumers credit for understanding what happens to the personal data they provide, both online and offline. Most consumers are more than aware that their details are stored and used for marketing purposes. When the information is used intelligently and responsibly to provide them with material that is (correctly) personalised, timely and relevant, consumers do not object to their details being available.”
Spam is obviously not to be taken lightly, Combemale observes. “The consumer is well aware of fraudulent risks, such as phishing and credit card theft. The industry must continue to invest in security to maintain consumer confidence in e-mail on online purchases.”
Of course, it helps that across the European Union, e-mail is an opt-in medium – it can only be used to send marketing messages to potential new consumers if they have already consented to being e-mailed. Combemale argues: “The consumer continues to be comfortable sharing data with e-commerce companies as long as they see a benefit in doing so.”
As consumers become more sophisticated online, Combemale believes they will become more comfortable with the idea of “arriving on landing pages to be welcomed personally and with reference to prior purchases. The same holds true for personalised offers in e-mails that are related to prior purchases or information the consumer has shared. ‘You told us you were interested in red shoes, here are our latest red shoe offers’. The consumer sees the use of data in a targeted and relevant manner as a genuine benefit.”
But using e-mails to communicate to potential new consumers is only half the story, or rather a third. According to the DMA UK’s E-mail Client Survey, published in January 2008, only 37% of marketing e-mails sent in the UK are for acquisition purposes – the rest are to retain customers.
Felix Velarde, managing director of Underwired, says: “E-mail is quite simply the most immediate channel for delivering customer relationship management – cheap, instantly measurable, allows infinite segmentation based on previous response and subsequent tracked behaviour, instantly resegmentable and elegant.”
One approach, which UK marketers have yet to take up in any significant way, is “event-driven” e-mails. Yet the potential is huge, according to Steve Lomax, European managing director for e-mail marketing services provider CheetahMail. He says: “It’s the big one. It’s what we call ‘remarketing’ – when an abandoned online shopping cart triggers a personalised and relevant e-mail. Response rates are up to ten times higher than normal.”
Other likely growth areas, he believes, will include significantly increased personalisation using “dynamic content” – we’ll use information we have about you to create individual, almost unique, e-mails, with different content and offers. We’ll ring the changes every time. We’re making sure we put the most up-to-date, relevant information in the e-mail.”
Justin Thomas, manager at e-mail agency EDR, agrees that the biggest driver of increased response rates is likely to be the marriage of e-mail with other data collected online and offline. “The prime benefit of using offline data is that recipients feel communications are more relevant and legitimate. For example, since most ‘spam’ tends to originate from e-mail-only data capture, displaying a recipient’s first name in the subject line can give the consumer confidence that they are dealing with a reputable company they gave permission to receive marketing from.
“We have seen a 50% increase in opening rates by using name and town in subject lines, as well as a lower percentage of unsubscribers.”
It is easy enough to monitor response rates, so marketers can see whether, for example, increasing the frequency of e-mails from one per month to one per fortnight has increased customer activity or decreased it. However, Alex Attinger, managing director of direct response ad agency Attinger Jack Interactive says: “All too often, e-mail databases are over-used, and are treated as cash cows to be flogged to death, rather than being seen as a high-value resources. It is amazing how many brands mindlessly e-mail their customers with little consideration for how many e-mails they send or with scant regard for how that e-mail will be perceived.”
But marketers must remember there is no excuse for not monitoring how recipients react to e-mails and changing tactics accordingly. E-mail, after all, is one of the most accountable of all online tools.
E-mail and the law
It is illegal for marketers to use e-mail to communicate with consumers, unless those consumers have given their prior consent. Ignorance of the law, however, is no excuse, as Phil Jones, head of the data protection practice and an assistant commissioner with the Information Commissioner’s Office (ICO), explains: “Marketers have to be aware of the law on data use when it comes to e-mail.”
Furthermore, that prior consent has to be obtained using some other communications channel than e-mail – in other words, a marketer cannot e-mail a consumer to ask if it is OK to e-mail them with marketing messages. Their e-mail address must have been collected on a form, in a face-to-face interview, online, or on the phone, and they must have consented to receive marketing messages by e-mail.
There are some exceptions: it may be possible to send an existing contact e-mail marketing messages under certain situations, and it is also acceptable to use e-mail to communicate with a consumer about matters relating to an existing account or business relationship.
Confusingly, the rules are different when it comes to business e-mail addresses. A purely business e-mail account, such as service acme.co.uk, is fair game for any marketer. As Jones observes: “Legislation allows companies protection against unsolicited phone calls and faxes [in the form of the Business Preference Service and the Fax Preference Service “do not call” registers], but not against e-mails and text messaging. It’s an anomaly.” However, where a business e-mail address includes personal information, such as Joebloggs@acme.co.uk, individuals have rights under the Data Protection Act, and can demand to be removed from e-mail databases.
Another point Jones stresses is that it is the responsibility of the company sending out a mailing to check that people have given their consent to receiving marketing e-mails. This may be a problem if the lists include e-mail addresses that have been collected before the PECR came into force, or if questions have been raised about whether e-mail addressees have actually given consent – “forward to a friend” mechanisms, for example, are a very grey area.
Grant Keller, EMEA director at e-mail marketing technology company Acceleration, says: “When e-mail marketers are collecting data, they need to be extremely clear about its purpose, and whether or not it will be shared. If the data provider is not going to be given the opportunity to opt out at all points of contact in the future, they should beware.” Tink Taylor, business development director at dotMailer and a member of the UK DMA’s E-mail Marketing Council, says: “It is essential that internal data collection and data protection policies are watertight before e-mailing anything. Therefore, it is important to regularly check that policies surrounding data collection and security are working.”
Further information and guidelines on e-mail marketing, can be found at www.ico.gov.uk.
Martin Croft is a contributing editor at Marketing Week