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E-Mail: The "Killer Application" of Marketing Tools

This one one of the very first newsletters from the VectorInter.Net staff, originally written for presentation at a web site developers conference in 1992. It was amended and expanded over the years, but remains one of the most "correct" editorial pieces we've ever distributed. We posted it here in an early form, so you can see that the technology has changed, dial-up modems are gone and everyone has a personal blog, but the "basics" still apply.

    A Sales or Marketing Manager's dream is the ability to follow any customer that receives the sales message, see them request more information, and then actually make a purchase. I've got good news. It's called E-mail marketing.

    Are you searching for a way to reduce your catalog/brochure printing and postage cost? Can a sales message that was very specific to your prospects needs increase your response and sales rates? E-mail marketing, done correctly, can do all of that and more. Best of all, Some new studies are finding that e-mail marketing can reverse the trend of declining "click-through" rates from banner ads and is getting a significantly higher response rates than postal direct mail or newspaper advertising. A survey done by the industry magazine Sales & Marketing Management found that sales organizations typically achieve a 8% to 15% "click-through" rate from opt-in e-mail and then convert between 1.5% to 5 percent into real sales. That's much more effective that the 1/3 % to 2 % response rate credited to traditional direct mail.

   Lets look at a few of the different types of e-mail marketing that are being used and find one that will work for you. The most successful types fall into a few common categories. 

    The first type is "Order Confirmation". These are reply messages that give purchasers a report on the status of their orders. These instant responses will reduce your initial order cancellation rate. An additional message could confirm the product ship date. If integrated into an enterprise platform, Email can also provide shipping information the customer can use to track their orders with the delivery company ( ie: DHL, Fed Ex, UPS, etc..). Every e-mail should also cross-sell another logically related product. For example, someone who buys a printer will likely respond to an offer of reduced price ink cartridges. This "click-through" rate can be from 4 percent to 10 percent or more. Add-on purchases from existing customers is the easiest sales revenue increase you'll ever find, since the cost per sale number is almost zero. That makes Sales Managers smile.

    An E-mail based "Reminder Service" will require an opt-in program, but can be a very valuable tool. The trust that you earn with customers and clients can also provide a halo of prestige to any sales message you send or sell as advertising to others. Also known as "scheduled alert messages", these emails are timed for a specific recipient and event as the name implies. One way to encourage customers to register for such services is to explain the benefits to them. No one signs up for spam, but your clients will request reminders about quarterly tax filings, equipment service or warranty announcements and reminders about a dental appointment, if given the opportunity. One of the most effective "reminder" programs we've seen is used in the trade show / convention industry. Companies that exhibit at these large events face a constant stream of information about the scheduling and logistics need to set-up the trade show booths and exhibits, before the show is open to the public. Our sister company, uses this tool to communicate with both the customer and venue to reduce last minute "issues".

    A "Customer Relationship E-mail" is the next common type of Email based marketing. This is the most basic form of opt-in or permission based e-mail marketing. Customers and prospects agree to receive scheduled messages about new products or services. The "club membership" business model can be best typified by the Jaguar Formula 1 racing team. In order to see the latest photos, interviews and other unique content on the web site, subscriber's sign up for a FREE membership, that includes the "opt-in newsletter" feature. Before each race weekend, every fan of the team receives two emails with links back to the website, as well as offers of discounted merchandise. These personalized messages includes the members name and contains information that is relevant and timely, therefor creating value in the mind of the subscriber. 

    The last common type of email marketing tool is the "Newsletter". This can be the most productive email campaign you will ever do, if it is developed and maintained correctly. These programs require a greater level of effort, planning and advance work though. A newsletter can be sent daily, weekly, monthly or quarterly. Each newsletter must provide interesting, informative and helpful content, and should never cross the line into "self-serving". A good mix would be about 75% "editorial" content, another 10% could be "housekeeping" information and the last bit is your sales message. Violate the subscriber's trust by getting too much advertising content and the "un-subscribe" requests will decimate your mailing list.   You may want to take a moment and read "Online newsletters can work for any size business." in the VectorInter.Netnewsletter archives for a more detailed discussion of the effort required to effectively build this email tool. 

    Selecting an email marketing tool that is right for you will take thought and planning. If you will apply some creativity to your specific situation and are willing to adapt what has worked elsewhere, then you will find a plan that will be successful for you. Each email type has unique equipment or software requirements and differing levels of staff time and effort needed to make them a success. Some companies can do the work with existing personnel; others outsource the entire job. One choice is not better than the other, but it is not surprising that a Forrester's E-mail Marketing report finds that sales organizations that outsource the delivery and list management of their e-mail campaigns have higher response rates, conversion ratios and sales percentages than those that keep the job in-house. VectorInter.Net does not do e-mail delivery and list rental / management service work, so we can objectively refer you to several companies that do.

    Now would be a good time to look at the kinds of statistics that must be tracked and studied, to maximize the effectiveness of your sales campaign.  A few of the questions we must ask and answer are: 

    What is your "click-through" rate? If you're going to track campaigns effectively, you will need to build and assign unique URLs (individual web pages) to each promotion and count the number of visitors. Often you'll have several of these links within every email, each must have it's own unique tracking device.

    What is your "sales conversion rate?" You must follow not only which of your "click-throughs" made a purchase, but also "when" in the campaign timeline did each individual make their purchase. There is value in knowing that all of your sales will occur within 3 days of the mailing date. What if your customers respond slowly over a 6-8 day period? Knowing these historical pattterns will help you better plan inventories, staffing and cash flow projections. If the purpose of your email campaign is to generate sales leads, then why create too many? You will waste the prospect's enthusiasm, if your staff is not prepared to follow up and close the sale promptly. 

    What is the "Pass-along" rate? Knowing which of your original recipients forwarded your message to others is important when trying to determine your overall response percentage. Capturing the Email address of any new responders, and adding them to the mailing list may be appropriate, but was the original address the incorrect contact inside a prospect company? A high "pass-along" rate also may mean that the editorial content you are providing is right on target. Give your writers a bonus. You must learn to identify members of your mailing list that "frequently forward" your newsletter. These "active subscribers can be a gold mine of new prospects, whether they themselves purchase or not. 

    What type of "personalization" is possible? A mention in your message about the customer's last purchase, a special occasion or birthday will go a long way toward turning "customers" into valuable allies. Personalization creates higher response rates to your future promotions. We highly recommend "personalization" to our clients that need to build trusting relationships with thier customers. Any tax preparer or accountant, financial planners, all doctors, dentists and chiropractors, or any small business that relies on "local neighborhood" customers must learn to successfully implement a personalization program. 

    I've saved the "housekeeping" work and the unpleasant clerical chores for the end of this discussion of E-mail marketing, but it is also critical that we know:

    How many requests to "Unsubscribe" did you receive? You'll find it necessary to keep track of your unsubscribe request" after each email flood is sent. Don't take it personally, but every time you send an email, someone will "opt-out" of your list. Doing this chore allows you to constantly refine the messages sent to your satisfied customers and prospects. It also serves as a reminder of why we are constantly looking for new prospects.  These customers may be re-captured in other ways. Read "How to Promote your Web Site Offline" in the VectorInter.Net newsletter archives .  

    How many "Invalid" e-mail addresses did you receive? Deleting invalid e-mail addresses from your mailing list is going to be a constant chore too...... another part of the life cycle of an email campaign. People move and change jobs. Companies announce layoffs in your industry or in your neighborhood. If you monitor your "new subscriber" rolls closely, you may find that you have the opportunity to welcome back previously deleted subscribers... coming from a new email address. Don't waste mail server time, network bandwidth, and staff resources by constantly emailling addresses that you should know are ineffective, invalid or "orphans" 

    E-Mail really is the "Killer Application" of Marketing. With a little effort even the smallest business can use automation tools and software to better communicate with customers and prospects. By the way, Did you ever wonder who "invented" the @ symbol in every email? What is that symbols "real name"? Read about it in the VectorInter.Net archives. If you haven't already incorporated an organized strategic e-mail campaign into your marketing plans, now is the time to start. Contact the VectorInter.Net office nearest you or send an introductory email to us at Info@VectorInter.Net.   We will redirect it to the staff office most able to help you. 

We have more to read about "How web hosting works" and tips on "Do It Yourself Search Engine Optimization" Visit the VectorInter.Net newsletter archives.