In the early (let's call them pioneering) days of e-mail marketing, generating reasonable response rates and a decent return on investment was pretty easy. Sadly, the enhanced ROI was more a function of the low costs associated with blasting out thousands (nay, millions) of messages to unsuspecting consumers than of smart marketing.
This still is the central challenge of e-mail as a channel; throughout its history, organizations have tended to treat the medium as cheap paper. Those same organizations also tend to apply "mass" reach and frequency models to a direct, addressable and targeted channel. This explains the overuse, overreach and overload of completely irrelevant e-mails that clog up my inbox.
The risks to us as marketers are obvious, and a fate even worse than being called a spammer is being ignored. In a recent analysis of one of my company's client's e-mail file, we found that more than 90 percent of the client's e-mail recipients had not opened or clicked even one of its e-mails in the last year. The client had worn out its list with a poorly targeted and, therefore, low-relevance messaging strategy.
So let's say that the list was 500,000 strong and the value to that company of a valid e-mail address is $25 -- that's an $11 million marketing mistake.
The key to not burning your list is to match your content and offers to the needs, wants and desires of your subscribers -- thus making your messages more relevant, interesting and engaging. To do so, the most important area of focus must be capturing and integrating data that will help make communications more relevant. Only then is it possible to prioritize what content to send subscribers and when.
In addition, according to a Nov. 19, 2007, JupiterResearch report, The Banality of Churn: E-mail Reactivation Tactics for Acquisition Success, 17 percent of the U.S. online population creates a new e-mail address every six months. Think about that programmed obsolescence for your list every three years unless you can keep your subscribers interested enough that they tell you their new addresses.
There is a better way
So, having said all that and in spite of it all, I remain, personally, a great fan of e-mail marketing - or maybe I'm more a fan of the potential of the medium rather than the realities to date. If the fundamental job of a marketer is to identify, engage and activate potential customers, is there a more appropriate, data-rich channel?
I like what e-mail enables us to do in terms of segmentation, targeting and relevance, and stunning creative executions. Marketers and agencies, too, increasingly are waking up to the possibilities of using data to deliver the right message to the right people at the right time.
The keys here are to apply the age-old direct marketing tactics of segmentation, targeting and personalization. Simply expressed:
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Segmentation -- Identification of different groups or segments within a target market in order to develop different value propositions for each group.
- Targeting -- Delivering relevant messages to the identified segments in a way that best matches your value proposition to the specific needs of the segment.
- Personalization -- Tailoring certain elements of the communication to individuals within the segments.
Clearly, the ideal state is truly personalized messages delivered to individuals within your target groups based on their needs, but that still is a bridge too far today. These three elements, played out coherently together, provide relevance, and -- as we have seen -- relevance is the father of engagement.
E-mail as a complementary channel
Our own research has shown how e-mail complements other communications channels. Using Young & Rubicam's BrandAsset Valuator 2008, we have been able to show lifts in response of more than 25 percent when using e-mail in support of direct mail.
