e-mail marketing: Lessons from early adopters

Erin Kinikin

Despite good vendor functionality and solid e-mail results, e-mail marketing

is just starting to become a key part of customer relationship initiatives. In a

recent survey of more than 300 marketing professionals by eDialog (an outsourced

e-mail vendor), 48 per cent of companies considered e-mail marketing a

"mainstream marketing vehicle," while 44 percent are testing and the

other 8 per cent have either tested and rejected or have not done significant

e-mail marketing. Participants came from a number of industries, with the

majority from high tech, retail and financial services (as well as consulting

and advertising/marketing). While the survey audience was pulled from

subscribers to eDialog’s newsletter on e-marketing and so was somewhat

self-selecting, Giga is also seeing a growing interest in e-mail marketing.

However, successful e-marketing is much more than just a technology

implementation, with leading-edge companies citing cultural, technical and

process changes needed to make the technology effective.

Giga has recently talked to a number of e-mail marketing early adopters to

gain firsthand feedback on technology selections and lessons learned. Customers

of E.piphany, Unica, eDialog, MarketFirst, and Teradata contributed to this list

of e-mail marketing considerations and emerging best practices. Below is a list

of challenges these early adopters face:

Organization: Many companies are establishing marketing councils to

discuss e-mail contact limits, prioritize different campaigns, resolve

scheduling conflicts, etc. Key e-mail policies include which departments and

campaigns get access to e-mail lists, which types of communication fall under

which opt-in/opt-out, content guidelines, etc. Common definitions and policies

can make all the difference – one poorly judged e-mail can affect the entire

organization.

Timing/Frequency: Timing is even more important with e-mails than with

traditional communications. New customers may actually appreciate or respond to

more frequent contact while the glow of purchase is fresh. Companies have found

significant differences in response rates based on the amount of time that had

passed from a previous interaction – vary the timing of the e-mail, and watch

for optimal offer spacing and catalyst events (such as new purchases) that can

prompt more meaningful dialogs.

Data collection processes: Be prepared to define and enforce new business

processes for collecting and processing data. One company had been sending

registration business reply cards (BRC) to product managers for each product.

The company collects and manages all customer data collection centrally and has

established guidelines so all groups collect a common set of core data.

New skill sets: While most companies have relatively few analysts

actually creating and launching campaigns (despite vendor ease-of-use claims),

many are allowing more marketing users to run customer analysis and identify

target groups. Make sure analysts understand the data and have the tools to

monitor specific customer groups and other interests areas. Be prepared for some

culture clashes between data knowledgeable (classic database marketing) users

and more creative types used to offloading most of the work to an agency or

outsourcer – both camps may have difficulty adapting to the faster pace and

more frequent interaction of e-mail marketing. Sixty-nine percent of respondents

to eDialog’s survey indicated that e-mail marketing was a "roller-coaster

ride" (while 29 percent said it made them "heroes" and 2 percent

said it made their job a "living hell") – be prepared for setbacks

and adoption issues.

Dialogs: The most innovative e-mail marketing establishes an ongoing

dialog with frequent customers with strong ongoing interests, such as pet

owners, digital camera owners, hair loss tonic users, donors, disease victims or

frequent travelers or shoppers. Leaders are investing in step-by-step

interactions that reward registrants, educate and encourage new purchasers,

automate purchase reminders, allow subscribers to share information with others,

announce sales, etc. However, dialog marketing is still the exception –

several companies used focus groups to identify high value interactions and test

dialog processes.

Geographic or partner coordination: Many multi-national companies are

beginning to work through the electronic equivalent of regional marketing,

giving local marketers input into list selection, campaign structure and

creative content while centralizing administration. Similar approaches are also

underway for partners and field sales. Approval processes and the right amount

of local flexibility are key.

E-mail list quality: eDialog survey respondents identified poor list

quality as the top inhibitor to good e-mail marketing. Companies must establish

practices to solicit e-mail IDs and protect and maintain list integrity. (The

next most vital challenge was getting e-mail addresses for current customers.)

Companies relying on purchased lists must investigate specialized opt-in

interest lists and track response and conversion rates. Results can vary

dramatically by list.

Closed-loop feedback mechanisms: Tracking results is another challenge

– several companies indicated that closed-loop capabilities didn’t come

"out of the box" with the e-mail marketing solution and instead

required an intensive development effort to pull together Web, -mail and

transaction information and assess results. Most companies measure click-

throughs, opens and unsubscribes, but want to track direct and indirect revenue

influenced by the campaign, as well as less quantifiable benefits like brand

recognition. Several companies track thousands of combinations of test cells to

assess the impact of different creatives, audience segments, frequency, etc. and

incorporate results into subsequent campaigns – don’t underestimate the

value or the cost of good response analysis.

Right expertise: Several companies mentioned the skill of their marketing

consultant as key to the implementation. (And another compared e-mail marketing

to "driving a Ferrari without knowing how to drive.") Most of the

high-end e-mail outsourcers (eDialog, Digital Impact, ClickAction, etc.) offer

e-mail marketing services, and many of the marketing software providers

(MarketFirst, Unica) have marketing or analytics experts on staff (or consulting

partners) that provide guidance to get efforts off to the right start. If

outsourcing, make sure e-mail campaign results are accessible (in sufficient

detail) on the outsourcer site and also can be imported for further in-house

analysis.

Recommendations

E-mail marketing is becoming a critical part of establishing and enhancing

customer relationships. However, pitfalls abound, requiring caution (and ongoing

testing). Start with one department or customer group and use pilots to increase

organizational readiness and assess customer results. Watch for new processes

and skill requirements and consider focus groups or other vehicles to discover

customer interests and trigger points that could foster deeper dialogs.

Listen to the customer – several companies mentioned that "customers

will tell us" when they overstep the line or provide less-than-valuable

communications. Make sure e-mail replies are handled and tracked (and negative

feedback associated with specific actions and campaigns), work with customer

service and other customer-facing functions to collect additional feedback and

refine processes as needed.