In-box clever to fast-track engagement

With consumers becoming ever more receptive to email marketing, brands need to invest time and money getting the most out of this valuable sales channel.

Sending an email with the right content to the right person at exactly the right time and using the right frequency might sound like a giant balancing act, but those brands prepared to invest the time and resources in getting it correct stand to reap rewards.

Yet the consensus among email solutions providers is that marketers are still struggling to grasp the basics of a successful email marketing campaign. John Baker, co-chief executive of marketing agency Iris Digital, explains: “People think email marketing is straightforward, but most companies only use 10% of what they can actually do with email.”

Stuart Russell, senior email consultant at consultancy Stream:20, adds that many marketers remain confused at how to capitalise on email’s marketing value despite the channel having proved itself to be a cost-effective tool for campaigns during the recent recession.

With its low implementation costs, email is the cheapest marketing channel available, and with a typical roll-out time of six days (compared with six weeks for direct mail) it can be used to react to news events that occur in real time.

“Email still has a sense of mystery around it,” says Russell. “We are all used to receiving email, but how you build it from the ground up is still unknown to a lot of people. Many still focus on the creative, but a key building block of a successful email campaign is delivering value based around a robust data structure.”

Russell says the only way to get the most out of email marketing is to segment customer databases according to profile, online behaviour and preferences. This allows marketers to send tailored emails to individual users, which means the discipline is not only cost-effective but has real impact on consumers.

British Red Cross digital fundraising manager Sarah Webb says that combining the speed of email messages with careful targeting is vital for her organisation’s strategy. “When disasters such as the Haiti earthquake occur, it is vital we start fundraising online as soon as possible. We are now able to execute email appeals within a few hours and have consequently been able to generate record levels of income via email.”

Email also allows marketers like Webb to measure the results of her activity quickly. Indeed, email’s measurability makes it one of the methods that helps organisations evaluate accurately how much money they make for each pound spent.

Ian Hitt, managing director of service provider Epsilon, claims the days of brands sending a generic email to 100,000 randomly acquired addresses and hoping for the best are coming to an end. He thinks marketers are coming to understand that even though segmenting and targeting by such elements as attitude and behaviour is more time-consuming, it delivers a greater return on investment.

“Behaviourally triggered email marketing depends on the recipient’s circumstances,” says Hitt. “One of our clients is doing a lot of work with new and expectant mothers. In different emails, the content is relevant to where that recipient is at in their life.”

The World Society for the Prevention of Cruelty to Animals (WSPA) is one organisation that uses its supporters’ behavioural data and preferences to customise its communications. WSPA international digital manager Daniela Martino claims: “We have quite a high response rate, in terms of supporters who open our emails and are converted to a call to action.

“We personalise the subject line and content, which increases the open, click-through and ultimately conversion rate.” The WSPA even analyses what day of the week is best for sending an email.

With customer data playing such an important role in developing successful email marketing activity, it seems the channel can also be used as a customer retention tool to enhance engagement with brands and ultimately attract more consumer spend. Brands can use information acquired at the first point of contact, such as at email newsletter sign-up, and build on it through the customer’s interaction with a website, both in browsing and actual transactions.

Car rental company Hertz uses email to connect with its frequent customers, who account for 25% of the company’s revenues in Europe. Last year, it spent $700,000 (£432,000) to execute email marketing and it brought in revenue of $30m (£18.5m) – an ROI of 42:1.

Hertz Europe CRM director David Oliver says: “When we were going through some of the toughest parts of last year, email marketing was one of the few sectors where the budget was kept. We measure it so carefully that for every dollar we spend, we can see what we are getting back. Few things we do deliver a better ROI.”

Joanna Kelly, senior ecommerce manager at lingerie brand Agent Provocateur, adds: “Our customers are incredibly loyal to the brand and we reward them by sending the most relevant, targeted and engaging communications possible. Email is a critical communications vehicle for this.”

However, Epsilon’s Hitt says there is also a place for email as an acquisition driver for new customers, even though this is more challenging. “You have to ensure that you have permission from the recipient for sending the emails, and response rates are lower. But if you get the subject line right and make the offer relevant, then you increase the chance of having it read and acted on.”

The rise of social networking sites such as Facebook, Twitter and MySpace has had some industry doomsayers anticipating the death of email. They ask when people can communicate all the time in places they choose, is there really a place for marketing in the inbox?

According to Guy Hanson, business development director of service provider Database Group Interactive (DGI), this trend will not see the end of emailing, but he does acknowledge that brands need to find “smarter” uses for email. “The channel is certainly growing in terms of volume – 30% growth this year is being forecasted,” he says. “A lot of this is expected to come from social media integration.”

Iris Digital’s Baker says there is a need to establish how email can complement social network activity and even be a prompt for it. “It is possible to have a new way of delivering an enewsletter into social media feeds and still drive people to click back to the website,” he suggests. “You would have to think about the kind of content you would use that way. For example, you could advertise promotions but you would not be reaching a segmented or targeted audience.”

Steve Lomax, EMEA managing director of the CheetahMail email marketing tool devised by Experian, points out that many emails are now equipped with buttons to allow the user to post it on Facebook or Twitter. “Recent disaster appeals have demonstrated that people want to share links with their friends and family quickly. This also means you need to have great content to get people to post.”

But such content must be considered in context with the nature of the social networking site, says Jean-Claude Mighty, ecommerce communications manager for Aurora Fashions, parent company of fashion brands Karen Millen, Oasis and Warehouse.

“We have enabled customers to post updates from our emails on Facebook, Twitter and MySpace. This helps them become brand advocates,” he says. “Twitter is about short updates so you have to think about what kind of message you send out or you could fall into the trap of delivering the same message all the time. Facebook creates a community where content such as information on events can be held. But then you can use Twitter to give people updates on what’s happening during the event.”

Not only should email marketing complement social networking activity, it can also be an effective side dish to television, print and direct mail campaigns. Marc Munier, commercial director of email marketing solution provider Pure 360, says: “In the business-to-business sector, people are using email marketing in conjunction with telemarketing. Statistics from the Direct Marketing Association say this increases the effectiveness of telemarketing by 75%.”

Email marketing is growing at the expense of other marketing channels, according to Richard Gibson, chair of the DMA Email Marketing Council’s Benchmarking Hub. He quotes the DMA’s National Client Email Marketing Report, which claims that 53% of marketers say the increase in their use of email is at the expense of direct mail and 35% say it is at the expense of print and press advertising.

Hertz’s Oliver says: “We have switched a lot of our communication to online because it is so cost-effective. We now do very little in the way of hard copy in the post except for our extremely high-value customers.”

New technology will continue to form the basis of emerging email marketing trends. Aurora Fashions has been working with email software developer Exact Target to introduce mobile technology. Exact Target general manager Peter McCormick says: “With retailer Oasis, we wanted to look at how we could use the in-store experience to capture customer behaviour, like putting a ‘short code’ on a garment tag that customers can text to for a special offer, in return for permission to carry on a conversation with the customer.”

McCormick also highlights US DIY retail chain Home Depot, which is using the concept of “live content” as an early adopter of the next big email trend. If 100,000 emails are sent detailing a perishable offer, the content can change if the email hasn’t been opened by the time the offer runs out. Another US trend McCormick notes is the use of “outbound voice” messages, which feature a spoken message from a brand ambassador.

Mobile applications are also seen as a natural evolution for a brand’s email and digital strategy. Hertz’s Oliver says the company intends to invest more in this area to create increasingly bespoke mobile applications.

But marketers shouldn’t get carried away with the excitement of new trends and remember there are countless technical factors that must be addressed. Margaret Farmakis, senior director of email technology specialist Return Path, claims a key component of email marketing is “deliverability” – ensuring the email actually makes it to the inbox. This is linked to the security and reputation of the sender’s address, as judged by the internet service provider’s (ISP) spam filters, which are becoming increasingly tough.

“ISPs use a measure of ‘sender reputation’ to determine whether a sender is a spammer or not,” says Farmakis. “There is no point spending money on the creative if the message doesn’t get to the inbox in the first place.”

DGI’s Hanson adds that avoiding being labelled as spam is as simple as providing an unsubscribe link in an email so recipients aren’t forced to block a sender. He says that customers are more savvy about spam these days, and are prepared to treat it brutally or report it to their ISP. Marketers must be careful to keep their complaint rates down so they are not blocked in future by Yahoo! or Hotmail.

Such heightened security measures should actually benefit marketers. By acting with integrity, marketers can make consumers more comfortable with email marketing, which can lead to further permission for brands to get in touch. And thanks to the recession and the resulting special offers by email, people recognise that this type of campaign can benefit them.

Kath Pay, DMA Email Marketing Council representative and managing director of email marketing solution provider Ezemail, sums up: “The market is more receptive to email marketing than ever before. Consumers are increasingly understanding they can get great deals by email, and the whole market value increases because of this.”

FACT FOCUS
What is email marketing?

A marketing channel that allows a brand to engage with a customer or subscriber list. It is used largely as a retention tool but also to introduce new customers to a brand, with the aim of increasing brand strength, loyalty and ultimately sales.

How is it carried out?
It can involve updates through a regular newsletter, or distribution of an offer, voucher or discount, linking back to a website or to drive store traffic. It can also be used as a customer-service tool.

Marketers can use a customer database to send email updates, segmenting customer profiles to tailor message content. Email can be used to deliver a standalone campaign or to complement a television, print or direct mail campaign.

FIGURE FOCUS
Email marketing in numbers

  • 13 billion marketing emails were sent in 2009.
  • £1.1bn is spent on email marketing, according to the most recent DMA Economic Impact study 2008.
  • 50% of consumers globally say they have made a purchase as a direct result of an email.
  • Email, search and online display is predicted to make up 18% of total media spend in 2012.
  • Email made up 23% of digital marketing budgets in 2008.
  • UK online sales are predicted to reach £80bn this year, up from £40bn in 2007.
  • 51% of consumers would be interested in receiving emails about companies they know.

Sources: Direct Marketing Association; Epsilon; Forrester; and e-Consultancy

IN THE MARKET
10 suppliers you need to know

Database Group Interactive
Provides a full digital marketing service, including email transmission, integrated database solutions and campaign management.
www.databasegroupinteractive.co.uk

Stream:20
An online consultancy focusing primarily on helping clients hit online sales targets by placing its experts within a client’s marketing team on a consultancy basis. www.stream20.com

Experian
Provides data and analytical tools to clients and helps businesses manage credit risk, prevent fraud, target marketing offers and automate decision making. www.experianplc.com

Alchemy Worx
Creates strategic email campaigns to help clients build strong relationships with customers and gives insight into how customers respond to communications. www.alchemyworx.com

Emailvision
Emailvision’s flagship software product, Campaign Commander, has seen a wide take-up in the ecommerce sector with more than 4,500 users worldwide. www.emailvision.co.uk

Underwired Amaze
Produces heavyweight eCRM programmes designed for step changes in retention, brand consideration and incremental revenue.
www.ecrm.co.uk

Positive Thinking
Can recommend an entire digital strategy, track ROI and combine a client’s digital work with its overall marketing strategy.
www.positive-digital.co.uk

Digital Consortium
Offers a cost-effective email marketing tool called Squeezymail, designed to be simple for clients to use themselves with a branded template. www.digitalconsortium.co.uk

Spinnaker
Works across advertising, direct marketing, digital marketing and sales promotion. www.spinnakerdirect.co.uk

Silverpop
Offers a suite of solutions to enable companies to build relationships with customers through the creation and delivery of relevant online messaging. www.silverpop.com

TOP TRENDS
2010 predictions

Guy Hanson
Business development director, Database Group Interactive

Marketers will increasingly use segmentation and analysis of their customer bases and email traffic this year. Email marketing volume will continue to grow because of the social media phenomenon. One of the challenges will be an increased battle for eye share. The average consumer gets 40 or more marketing emails a week, so you need something special to be successful.

Matt Blumberg
CEO, Return Path

Email use will rise sharply as the essential notification mechanism for the growing universe of social media. However, this will lead to even more inbox competition. Marketers should seize this opportunity to build on the synergies between email and social media.

Mobile marketing promotions and commerce will explode like search in the early 2000s and social media in recent years. Marketers will aggressively work to develop mobile versions of their websites and emails and custom applications for interaction with their brands. They will struggle with strategic and technical issues as they race to provide their customers with the ideal mobile experience.

Will Schnabel
Vice president of international markets, Silverpop

There is an opportunity for marketers to increase engagement by including customer product reviews, making their messaging both relevant and persuasive as consumers are placing increased value on user-generated content.

With 40% of social network participants using such sites to gather product information and recommendations, marketers are using this new channel to better connect with customers. Now is also the perfect time to work SMS into a multichannel marketing mix.

Richard Gibson
Chair of the DMA Email Marketing Council’s Benchmarking Hub

Senders will spend more on email marketing and related services; this is shown by the DMA National Client Email Marketing Report, which reveals that 70% of respondents said their company’s expenditure on email marketing will increase this year.

It’s becoming increasingly important for marketers to see and understand what ISPs are using to make filtering decisions. It will become even more imperative for marketers to grasp the nettle of inbox placement data and add email deliverability monitoring to their marketing mix.

Marc Munier
Commercial director, Pure360

Marketers will look more at “re-engaging” this year. Some marketers are happy if 25% of emails are opened, but what about the 75% of messages that aren’t opened? There is an opportunity to retarget those people. People have previously been happy with that 25% figure and will keep emailing people that don’t open emails, which gives companies a poor online reputation.

Ian Hitt
Managing director, Epsilon

The big shift in the next three years, with the advent of mobile devices such as the iPhone, BlackBerry and Nexus One, will be a huge push toward sending relevant emails to people’s inboxes.

There will be a surge in location-based emails sent through mobiles. For example, if a customer is walking past a store, an email can be sent with an offer to entice them to go into the store; the system can also detect if a customer is up to a mile away from a bricks-and-mortar store and can send a voucher. H&M and Ralph Lauren are two examples of retailers that are already trialling this. This is a shift away from consumers having to spend time searching for offers.

IN PRACTICE
Top tips you need to know

  • Make communication timely, relevant and at a frequency with which recipients are comfortable.
  • Build the email around a specific call to action to give people a reason to respond.
  • If issuing a customer survey, tell recipients the reason behind it and offer an incentive to motivate them to respond.
  • Use an email service provider if unsure of processes such as building customer profiles and increasing email deliverability.
  • Use catchy, recipient-specific email subject lines to increase open rates.

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