This white paper describes the benefits and challenges of using e-mail marketing as part of a sales and marketing program for “considered purchases,” such as found in the sales cycles for business and industrial products.
E-mail has become a business tool that is almost as important as the telephone because it overcomes many of the communications problems of other media. It’s frequently faster to communicate with someone via e-mail than with voicemail and fax.
Email Provides Flexibility
Business marketers have found that e-mail has the flexibility to deliver a wide variety of messages, and it has the impact of a personal message. Of course, e-mail marketing cannot totally replace other forms of marketing and selling, but it can augment traditional sales and marketing techniques by increasing the frequency of exposure, delivering a high-impact message, and reducing sales and marketing costs.
E-mail marketing is proving its power to support both online and offline sales and marketing campaigns. Forrester Research recently interviewed companies about their results in using e-mail marketing techniques and found that the companies interviewed will triple their e-mail marketing budgets by 2004. It was somewhat surprising that these companies will spend half of their online marketing budget on e-mail marketing, but Forrester found that e-mail marketing is both effective and efficient. Their study reported that sending e-mail to in-house lists cost about $5 per thousand messages sent and that clickthrough rates average 10 percent. This means that e-mail marketing is much more efficient than practically all other forms of online or offline marketing.
While e-mail marketing has proven its value, it does present several challenges to marketers regarding implementation, such as:
- Who should receive e-mail?
- What content should e-mails contain?
- How often should e-mail be sent?
- How should an e-mail hosting company be selected?
- What follow-up is effective for sales?
Regardless of how targeted, relevant, and informative you think your message is, unless the recipient specifically agreed to receive the information you send, you risk alienating a significant portion of your audience.
You’ve probably noticed that the unwanted e-mail you receive doesn’t come from large, recognizable companies who want to maintain their reputation. But large, well-known companies do send a great deal of e-mail promoting their products and services. So how do they obtain lists of interested prospects without becoming spammers? The answer is to send e-mail only to an in-house list of people who have asked for or at least agreed to receive e-mail newsletters and promotions from a company.
One of the easiest ways to implement a permission marketing e-mail program is to allow Web visitors to subscribe to a company’s newsletter. At the same time, visitors can be asked if they are interested in receiving promotions (sometimes called “solo mailings”) from the same company. In addition, a variety of offline techniques can be used to obtain approval to send e-mail newsletters and promotional campaign messages. Salespeople frequently obtain e-mail addresses from their prospects and customers. Other offline sources of e-mail addresses are trade shows, product registration cards, call centers, and other “touch points” where a company’s employees come in contact with prospects and customers.
One thing to keep in mind about permission marketing is that each individual’s permission only covers the type of e-mail explicitly mentioned when asking for permission. For example, if you change the format of your e-mail newsletter to resemble a solo ad or special offer, expect a large portion of people to unsubscribe from your list.
Frequency of Contact
Most marketing and sales executives know it’s important to contact prospects and customers frequently to create “top of mind” awareness. What’s not always clear is exactly why this is true and how to accomplish it.
In general, exposure to a message is cumulative, and each exposure to a message helps a person move above a “threshold of acceptance” where they will take action. However, impressions have a certain “decay rate,” which means that if not reinforced with additional exposures, awareness will fade away over time.
This means that it’s not just the number of exposures it’s the number of times a person is exposed to a message during a certain time period.
Marketing research indicates that prospects need more exposures before they cross the threshold, while customers who presumable are directly exposed to the product’s benefits seem to require less frequent sales and marketing messages for them to remain loyal over time.
This means that it’s important to keep in frequent contact with both prospects and customers. The challenge, of course, is doing it inexpensively. In addition, it’s important to know when to increase the level of contact from primarily e-mail to a more intensive contact, such as a call from a salesperson. Fortunately, e-mail marketing techniques can meet both challenges at the same time.
As potential customers look for ways to meet specific needs, they move from initial awareness of their need through several stages of information gathering, and, hopefully, to product evaluation and selection. Traditional business marketing has called for mailing brochures and catalogs, sending direct mail pieces, and other expensive and time-consuming techniques to hopefully make the prospect receptive to a call from a salesperson. With sales cycles taking from 6 to 24 months, it can be expensive to have salespeople maintain frequent contact while waiting for prospects to become ready for sales calls.
A more efficient approach is to combine an e-mail newsletter and an e-mail promotional campaign with less frequent sales calls. Today, e-mail marketing can deliver a company’s marketing message more quickly and less expensively than many other customer contact methods. In addition, e-mail can accurately track when prospects are ready to hear from a salesperson.
Planning an E-mail Marketing Program
While e-mail marketing can be used to support offline marketing activities (such as calling your 800 number), its best use is to bring people to your Web site by including links to specific pages on the site. This can be done with a short synopsis of an article or a product description next to a link that takes readers directly to a Web page. Clicking the link in an e-mail, called a “clickthrough,” can update each reader’s profile to indicate interest in the article or product.
No other marketing medium compares with e-mail for immediate response to a promotion and the ability to track results.
While the cost of actually distributing e-mail messages is very low compared to other marketing activities, it’s still important to test e-mail marketing campaigns and track results so you can measure and refine e-mail marketing activities. Even recipients of requested e-mail will only accept a limited number of messages from a company before becoming frustrated so it is critical to track results to quickly learn what works and what doesn’t.
Most activities related to e-mail and Web marketing can be tracked, and it’s this feedback that makes it possible to determine what works and what doesn’t.
When using an in-house list, be sure to track mailings to customers separately from mailings to non-customers who subscribe to your newsletter. For e-mail newsletters we’ve seen the clickthrough rate for customers can be twice that of non-customers.
Until recently, e-mail messages were delivered in text format only, but that is changing. HTML messages heighten the visual impact of a message by using special formatting and images in newsletters, and many subscribers are choosing to receive HTML newsletters instead of text format. This not only makes newsletters easier to read, it also increases the clickthrough rate.
Relationship Marketing via E-Mail
One benefit e-mail marketing has over Web marketing is the power to deliver each message with personality. Most Web sites are written in “brochure style.” It’s appropriate to establish the size and stability of the company because it reduces concerns about dealing with the company. However, once those initial concerns have been reduced, it’s time to put some personality into marketing and sales activities.
Successful field and telephone salespeople let their personalities demonstrate that they are real human beings. It’s important to do the same in e-mail marketing because recipients are accustomed to receiving e-mail from individuals friends, family and people with whom they work.
Traditional catalog companies learned many years ago that adding a brief personal message from the president increased response. Create the same impact in direct e-mail marketing by including a message from the newsletter editor, a top executive, or an enthusiastic product manager.
In addition to the choice of writing style, relationships with customers can be enhanced through using “personalization” software. By using profile data about each subscriber, the actual text of each message can be tailored to match the interests of each recipient.
For example, Providence College, Providence, R.I., uses both Web and e-mail personalization in marketing the school to high school students. Profile information supplied by students visiting the Web site, such as their high school and a potential major, is used to provide information on the Web and in e-mails about events near their home. The e-mail newsletter also automatically includes messages from faculty and student volunteers based on each individual’s profile information.
The relationship-building techniques used in the Providence e-mail newsletter are part of an integrated, personalized marketing effort by the school to help potential applicants learn about the people they will meet on campus. This familiarity with the people at Providence makes prospective applicants more comfortable in making a decision about applying.
E-mail marketing techniques can increase Web traffic, gain awareness, and generate revenue at a very attractive return on the investment.
Getting Started with E-mail Marketing
It’s relatively easy to begin using e-mail marketing through the use of an e-mail hosting service. One of the first steps is to select a hosting service that matches your service needs and budget (see sidebar). Then, design a subscription form for use with your Web site that collects names and e-mail addresses. The form will likely be hosted at your e-mail hosting service but will use the graphics and design of your existing site. This maintains your corporate image without having to involve your IT department to add a database or the other technical functions handled by an e-mail hosting service.
In addition to collecting subscriptions on your Web site, you should also involve your salespeople to collect e-mail addresses from existing customers and ask prospects if they can be added to the newsletter list, too.
Then, it’s a matter of developing short articles that show prospects how they can benefit from using your products and articles aimed at customers that show how to obtain greater benefits from products already purchased.
With the help of your e-mail hosting service, you’ll be able to contact prospects and customers more frequently and more efficiently. In addition, youll be able to track how well your e-mail marketing helps turn leads into qualified prospects, and how it helps your salespeople turn prospects into customers.
Case Study: Personalization Delivers Personality for Providence College
Selecting a college can be one of the most challenging tasks a high school student faces. From the time a college-bound student begins to think about higher education, brochures and catalogs fill the family mailbox.
When one college library starts looking like all the other libraries, it’s time for a little personal attention to prioritize the options. For Providence College, Providence, RI, personalized e-mail helps them tailor the message to their target audience students seeking a New England liberal arts experience.
Their personalized Web site collects profile data about a student’s interests, potential major, and other aspects of college life. Then, e-mail messages tailored to each student’s profile help build a relationship as students gather information and make a decision about applying to colleges.
“Our e-mail and Web experience lets us tell our story over time to help them with their application and selection process,” says Brian Williams, Associate Dean of Admission.
When it comes to collecting e-mail addresses, Providence combines the Web with traditional direct mail. “If a student shares an e-mail address on our Web site we send out a personalized welcome e-mail message and encourage the student to sign up for our newsletter and create a personalized profile on our Web site,” says Williams. In addition, e-mail addresses are part of the information provided by outside agencies. Providence uses traditional postal mail to send a form requesting permission to send e-mail to that account.
Since moving to personalized Web and e-mail, Providence has seen the number and quality of applicants increase dramatically. They use the Web and e-mail software in an integrated Web and e-mail environment. “We use a Web-based content management system for the creation, editing, and delivery of our Web and e-mail communications,” said Williams. “Our goal is to allow our entire campus community to participate in creating our newsletter. This lets readers see themselves as a student here and decide if they would be happy here for four years. And, the system makes creation and delivery of this personalized experience an easy, fast process for our admissions team.”
Checklist for Selecting an E-Mail Hosting Service
Each e-mail hosting service has a different set of capabilities and fees, so it’s important to know which features you need to accomplish your marketing and sales goals. In evaluating e-mail hosting services, be sure to ask if they provide the following list of features and capabilities:
- Maintain a database of subscription and interest data, not individual mailing lists
- E-mail as many review copies of newsletters to editors as necessary prior to publication
- Provide personalization based on each subscriber’s interest profile
- Track clickthroughs in real time to monitor response to articles and offers
- Provide Web and e-mail survey capability
- Provide Web product registration capability
- Enable Web-based management of the service and reports
- Automatically handle unsubscribes and bounces
- Provide for both newsletters and lead collection
- Send both individual newsletters to subscribers and an ongoing campaign of messages to leads