Submit 2 paragraphs of reflection on what you have learned from each case studyThe goal of this assignment is to give you an opportunity to reflect on how the learnings in the case study apply to either the course lecture and/or a situation described in the case study.
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H A RVA R D
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Mapping the Frontiers
of E-mail Marketing
BY NICK WREDEN
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Mapping the Frontiers
of E-mail Marketing
THE INTERNET’S KILLER APPLICATION—
e-mail marketing—is a double-edged
sword. As a marketer, or even as a mere
consumer, you should understand how
it cuts. On the one hand, it’s a quick and
innovative way to reach prospects and
customers at a time when many spend
more time on the Internet than in front
of their TVs. E-mail marketing is
becoming an important part of many
corporate marketing programs, complementing Web sites and providing an
effective tool to tailor messages to specific interests. On the other hand,
e-mail marketing is also tainted by the
unsavory reputation of “spam”—the
unsolicited e-mail blindly shotgunned
out to the estimated 100 million regular
users of e-mail, hawking everything
from sex to get-rich-quick schemes.
Leading companies use e-mail
to develop their brands
Despite the potential risk, leading companies such as The Gap, HewlettPackard, Preview Travel, The Sharper
Image, Tower Records, Symantec, and
others are using e-mail marketing to
develop brands, drive traffic to their
Web sites and stores, and cross-sell
products and services. A major motivation has been the wealth of marketing
information available from e-mail
campaigns. Companies can track a consumer response from initial e-mail
contact to ultimate sale, including the
information requested and time spent
with the marketing material. Offers can
be tailored for each individual, with
responses tracked among various control groups. E-mail marketing can
achieve a level of precision at volumes
that have only been dreamed about
before. For example, InfoBeat, a Denver-based Internet company that provides advertiser-supported consumer
subscription services such as free per-
sonalized news, sends out five million
customized e-mails a day to two million
subscribers. Advertisers can target specific groups by age, gender, state, zip
code, income, Web browsers, and by the
type of service they subscribed to.
Does e-mail marketing
lead to sales?
E-mail marketing is unlike any other
form of marketing, and the pioneers are
constantly experimenting to find out
what works in this new environment.
The response rates—the percentage of
people who reply expressing an interest
in buying—have generally been good,
although the jury is still out as to
whether there’s been a corresponding
increase in sales. In fact, e-mail marketing may be best as a customer relationship management tool.
“E-mail marketing enables companies
to push a brand out instead of trying to
pull prospects in,” says Karen Askey,
senior vice president of consumer
marketing at Preview Travel, a San
Francisco–based provider of online
travel services that e-mails six million
messages monthly. “Often, these
e-mails rekindle relationships and boost
traffic to our site. We’re believers in the
power of e-mail marketing to increase
brand awareness while also improving
customer retention and loyalty.”
that specifically asks recipients
whether they want to receive additional
messages. In some cases, this box is
prechecked, but it’s safer to request an
active checkoff. Tell the recipient how
frequent future e-mails will be—daily,
monthly, or occasionally. Do not place
an existing customer—even one you
regularly send postal mail to—on your
opt-in list without permission. It’s even
inadvisable to send offers or other
information in e-mails that confirm
existing orders.
Make sure that even the people on your
opt-in list want to continue to receive
your e-mails. On each message,
include an “unsubscribe” option that
allows the recipient to decline future
messages. Once a recipient asks to be
removed from
your list, be certain to follow
through on the
request. There’s
no surer way to
lose a customer
than to keep
sending e-mail
to someone who
has requested a
halt to the messages. And beware of
e-mail fatigue. While the first message
gets read, subsequent ones, sent too
frequently, will be relegated to the
trash bin, especially if the content is
repetitive.
“E-mail marketing
enables companies
to push a brand out
instead of trying to
pull prospects in.”
How can you take advantage of the
power of e-mail marketing without
having your efforts branded as spam?
These seven principles can kick-start
any e-mail campaign while avoiding
the pitfalls:
Building an opt-in list of recipients not
only ensures good will but also provides protection against the legislative
groundswell that’s moving toward
regulation of UCE—unsolicited commercial e-mail. It also protects you
against complaints about UCE to Internet service providers (ISPs), that will
then often discontinue the offending
account. Hackers have even shut down
corporate and other servers they suspect of generating spam.
1 The customer is in control. Be sure
that customers want to receive—and
keep receiving—your e-mail messages.
Include a highly visible “opt-in” box
Be wary about renting e-mail lists, even
those that promise opt-in selectivity.
After all, the list members opted in
for something other than an e-mail
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3
E-Mail Marketing, continued
message from you. Ask whether it’s an
opt-in or compiled list, and ask to see
the original opt-in mailing. Remember
that response rates are generally lower
with rented lists than with in-house
lists. And be wary of renting more
than one e-mail list at a time. While
list brokers
“mergeand-purge”
duplicate
names on
postal lists,
that capability is still
unknown in
cyberspace,
creating the
unpleasant spectre of sending multiple
e-mails to one prospect.
While “Free!” may
work in direct mail,
it’s associated with
sleazy come-ons
on the Internet.
Also be sure to have a Web-accessible
privacy policy that lets consumers know
how you will use the information.
While direct mail lists are regularly
bought and sold, consumers are very
sensitive about having personal information exchanged without permission.
2 Forget almost everything you
learned about direct mail. Many of us
are familiar with the timeless precepts
of direct marketing: “Free!” is powerful and attention-getting. Long copy
works better than shorter copy. Contact
information belongs near the end. Use
lots of bold and italic type.
Incorporate these time-tested direct
marketing techniques at your own
risk—the same rules do not apply to email marketing. While “Free!” may
work in direct mail, it’s associated with
sleazy come-ons on the Internet. Recipients either immediately delete messages with “free” or set their e-mail filters to block those messages. Reading
on a computer screen is hard, so long email messages won’t work; the shorter,
the better. The e-mail equivalent of
contact information—embedded URLs
for click-throughs to your site—
belongs near the top of the message in
the first screenload. And what looks
bold or italic on your computer may be
unintelligible to someone with a differ-
ent e-mail program.
While you can control the look of a
direct mail piece down to the last
comma, e-mail marketing leaves you at
the mercy of the varying software
capabilities of your recipients. For
example, America Online uses proportional-spaced fonts, while other common e-mail programs use fixed-width
fonts. As a result, “wordwrap”—the
placement of successive lines of text—
can differ from program to program. To
minimize compatibility issues, the
experts advise that each line should
have no more than 64 characters with a
hard return at the end of each line. Similarly, limiting the subject line to 24
letters will prevent the line from being
cut off or, worse, not being displayed
by many e-mail programs.
“Paying attention to the many formatting details can pay off,” says Ray
Kaupp, vice president of marketing at
Digital Impact, an e-mail marketing
firm based in San Mateo, Calif. “Reformatting increased the response for one
message by 35% after it was transmitted again.”
According to Kaupp, responsiveness
increases by two or three times if the
recipient’s e-mail program is HTMLenabled. HTML allows a graphically
rich e-mail to be sent to a recipient,
complete with the colors and visual
elements common to Web pages.
For example, National Geographic
received a 32% click-through rate on
links embedded in an HTML-enabled
message. Sometimes, it’s possible to
determine HTML capabilities by the
e-mail address. Users of hotmail.com
can receive HTML, for example, while
those with yahoo.com addresses
can’t. More sophisticated programs can
tell via a “flag” in the recipients’
e-mail whether they can view HTML
messages.
3 Sell products and services by giving
away information. The Internet has
grown exponentially not because it’s a
wonderful technology or even a more
convenient way to shop. It has grown
because it’s a better way to access and
share information. Build on the
strength of the Internet by providing
information that’s both useful to the
recipients and linked to your products
and services. Providing value with email newsletters or similar vehicles
will help you stand out among the 250
billion opt-in messages that Forrester
Research estimates will be sent in
2002. Useful information is also vital to
keep customers and prospects returning
to your site, especially important since
it’s estimated that the average Internet
user spends the bulk of time online visiting only five to ten sites.
Symantec, a developer of productivity
and utility software in Cupertino,
Calif., launched an e-mail marketing
The Essence of E-mail Marketing
• Your customers are in control—listen to them.
• Forget almost everything you learned about direct mail. The same rules
don’t apply.
• Sell products and services by giving away information.
• Test,test,test in a continual learning process.
• Ensure adequate resources.It takes more than you think to staff for
e-mail marketing.
• E-mail isn’t free.
• Keep an eye on the future. Don’t let new technology catch you by surprise.
This document is authorized for use only by Yingqiao Huang ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or
800-988-0886 for additional
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4
E-mail Marketing, continued
campaign built around the requirements of small businesses. Its e-mail
newsletters, distributed by NetMarquee
in Needham, Mass., from lists culled
from product registrations and trial
downloads, have included tips on how
to increase meeting productivity or
how to sell more effectively. According
to Jeanne Brophy, marketing manager
at Symantec, response rates generally
average 10–11%, demonstrating that email marketing can be a great way to
build kinship and increase brand
awareness. Just as important, messages
can be tailored and sent to subsets of
Symantec’s database. “We’re seeing all
the right numbers and we can tell it’s
driving revenue,” says Brophy.
Don’t confine e-mail marketing to
newsletters. In addition to the twicemonthly e-mail newsletters it sends out,
Preview Travel also offers “Fare Alert
E-mail,” which informs subscribers
when their chosen flight itineraries
reach the prices they’d be willing to pay.
4 Test, test, test in a continual learning process. While there are no road
maps to success with e-mail marketing,
the ability to personalize and to market
to database subsets presents an unparalleled opportunity to learn—without
alerting the competition—what works
and what doesn’t. Preview Travel
started off with standard e-mail
newsletters, but has begun to customize
them based on demographic data and
other criteria. For example, San Francisco residents learned about an airline
special from San Francisco to Vail,
while other recipients received different offers. To help provide a baseline to
measure effectiveness, Preview Travel
also sent information about the other
offers to a control group of San Francisco residents. The best advice: start
small, test, and be willing to learn. As
Symantec’s Brophy points out: “It’s a
brand-new medium. You are allowed to
make mistakes.”
5 Ensure adequate resources. Deploy
adequate technical and content development resources. E-mail marketing
programs can strain a technical infrastructure, and many IT departments
may not have the necessary commitment and skills. List management—
keeping up with adds, deletes, and new
information—is a significant task. As a
result, many companies outsource their
e-mail marketing. Content needs to be
fresh and relevant, so don’t promise
weekly e-mails if you can only develop
material twice a month. And be sure
that you have the capacity to quickly
handle the responses, either via e-mail
or the phone.
6 E-mail isn’t free. At first glance,
e-mail seems like a free marketing
vehicle. Just press “send”—no printing, no postage, no stuffing. But either
building or renting e-mail lists requires
an investment. One major e-mail marketing provider charges an average of
$10,000 for a set-up fee and from $0.05
to $0.15 for each e-mail sent. And
remember that e-mail isn’t a sales
closer. “Look at e-mail marketing as an
important step in the dance to get the
credit card out of the pocket,” says
Sarah Stambler, president of TechProse
in New York City and author of a report
entitled “Beyond Spam: E-Mail Marketing that Works.” “It has a lot of
strengths as a tool to maintain share of
mind and upsell existing customers.”
Examples of click-through rates: 5%
for Omaha Steaks, 2–6% for Eddie
Bauer, and 8.5% for a small networking
company. By contrast, advertising banners on Web pages generally average
about 1%.
7 Keep an eye on the future. Even if
you don’t have plans for an e-mail marketing program now, start building the
foundation. Collect e-mail addresses as
diligently as telephone numbers, while
asking people how they prefer to be
contacted. One idea: include lines for email addresses in warranty cards. And
be prepared for what is just over the
horizon. As technology advances and
improves, you’ll start to see video and
audio e-mails that will deliver the
impact of radio or TV without a lot of
the cost. E-mail marketing will also be
extended to mobile devices such as
pagers and PDAs (personal digital
assistants) like PalmPilots.
— NICK WREDEN ❏
Further Reading:
“Beyond Spam: E-Mail Marketing that Works”
by Sarah Stambler (Marketing With Technology News
and TechProse). The report costs $179 for
either the print edition or the electronic edition,
and $229 for both editions.To order by phone,
call 212-222-1713,by fax 212-678-6357,or visit
the Marketing With Technology News Web site at
www.mwt.com/spam.html ,or by e-mail
to [email protected]
Web Sites:
The Federal Trade Commission provides an excellent
resource on what can and cannot be done on the
Internet.Its publication “Marketing on the
Internet:The Rules of the Road” is available at
www.ftc.gov/bcp/conline/pubs/buspubs/ruleroad.htm
However, don’t ignore the potential of
e-mail marketing for revenue generation. Preview Travel, for example, sells
space on its e-mail newsletters to
advertisers anxious to reach a targeted
audience.
The emerging standard for measuring
the return on investment for e-mail
marketing is “RFM—recency, frequency, and monetary value.” RFM
looks at the date of the last visit to your
site, the number of visits, and the revenue generated.
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