5.1 eMail Marketing

Companies can gain an online presence simply through email marketing campaigns, which are generally run for three reasons, to:

1. Foster a better relationship with customers, leading to increased trust and sales.
2. Promote their own products and/or
3. Sell advertising or other people's products.

Advantages of Email Marketing

Email is a more individual and effective marketing method than selling through an impersonal website, but also has the greater potential of damaging reputation and sales. Two matters are usually stressed.

1. Research shows that customers don't normally buy on receiving the first email, but somewhere between receiving the third and tenth. Like normal shoppers, they like to think and shop around. Companies have to be persistent, but also subtle: bombarding readers with exactly the same pitch day after day will only alienate them. Happily, email management programs exist to automate the entire process — automatically responding to the replies, sending off the next carefully-crafted sales letter, keeping records and so forth.

2. Customers also dislike spam. They expect their permission to be sought before material is sent to their overcrowded mail boxes. Companies therefore give them the opportunity to subscribe to their newsletter — what is called opting in. 'Just enter your name and email to receive our free newsletter' is the usual thing, though larger companies may present subscribers with an extensive form to complete: 'Please take a few moments to enter your details so that we can send you the appropriate information.' Some companies cheat a little by making subscription automatic unless the viewer ticks asking not to subscribe: the resulting lists are called opt-out. Other companies are much more conscientious, sending a follow up email to check that the recipients do indeed wish to receive the newsletter, what is called 'double opt-in'. The 'opt-in', 'opt-out' and 'double opt-in' terms are important when obtaining lists from third parties. Newsletters also include their own mechanism for opting out: 'Simply click here to be removed from our circulation list.' A predefined email is sent, which the bulk mailing program automatically intercepts, amending the subscriber list accordingly.

Increasing Circulation

An attractively written and truly informative newsletter will enjoy a circulation that steadily increases in line with website traffic. Companies in a hurry employ four ways exist of rapidly increasing exposure. They:

1. Rent opt-in lists of email addresses in a category appropriate to their business.
2. Buy email lists.
3. Buy a similar or complementary newsletter that the owner wishes to dispose of.
4. Purchase software that trawls the Internet for site in appropriate categories and harvests the emails.

List Brokers versus List Managers

Before renting an email list, companies need to know whether they're dealing with a list broker or list manager. List managers work for the list suppliers, and their lists are cheaper. List brokers work on a commission basis, and try to get the best rate going for the email list really wanted by the client. Being more targeted, the lists are naturally more expensive, but usually receive better responses. In dealing with a list manager, companies will ask:

1. What sort of list is it — opt-in, double opt-in or opt-out?
2. What websites/URLs has the list been taken from?
3. What demographic characteristics and interests can they select by?
4. What's the stated price? (This is the rate card price, usually quoted by the thousand. A better rate can sometimes be negotiated.)
5. Does the stated price include the 'transmission' fee, or is there an additional charge for actually sending out the emails?
6. What's the minimum purchase?
7. How much has been 'tested' followed by 'continuation'? Tested lists are used by respectable companies. If a list is tested but not continued, then the results weren't acceptable: companies are advised to go elsewhere if the list manager won't provide this information.
8. What's the maximum number of mailings/month applying to the list?

List brokers act as third parties, maintaining contacts and sources of lists that enable them to find clients the best addresses at the best price. That means they expect companies to be very clear in their requirements (including budget and type of customer sought), and in turn provide them with the reasons for their recommendations (i.e. answers to the questions above).

An obvious question. If the lists are opt-in, how are they available for rent anyway? Subscribers give their emails for a newsletter, and the agreement includes the promise that the addresses will not be disclosed to third parties. True, but websites often ask their readers if they'd be interested in receiving information on further products and services, and it's the addresses of these interested readers that are made available, often via the email service that manages the newsletter for the website. Readers have given their permission to be placed on other lists, but of course expect to receive appropriate advertising.

List Managers: Buying Lists

Rather more risky is purchasing lists. They tend to be cheaper, but may contain a lot of out-of-date material. Opt-out messages and complaints are more frequent, and may be a false economy when ROI is considered.

Calculating the Return on Investment (ROI)

An email marketing campaign is an expensive undertaking, and companies do their sums carefully. Renting and emailing will probably cost 15 to 40 cents per address. Some 1% to 10% may be interested enough to click through. Of these visitors, some 0.5% to 5% may purchase. How much is each sale costing you in email advertising?

Suppose a company were very successful in all respects. Each email cost only 15 cents; 10% clicked through, and 5% purchased. Then the cost of each sale would be $0.15/(10% x 5%) or $30.

If, however, the company had to pay 40 cents per address, and got only a click-through rate of 1% and a sales conversion rate of 0.5%, then the cost of each sale would climb to 0.40/(1% x 0.5%) or a staggering $8,000.

In fact, eretailers pay something around $80 per sale on average, which makes sense if the object is to secure a loyal customer rather than achieve the one sale. Successful companies work hard at providing a newsletter and fostering good customer relations.

Can companies tell beforehand the results of an email marketing campaign? Not usually. The usual advice is:

1. Go carefully. Do a trial 2,500 to 5000 shots before committing yourself to a large campaign.
2. Model yourself on the market leaders. Examine what works for the most successful companies in your sector, and adapt their copy to your purposes.
3. Experiment. Keep modifying both list and copy, monitoring response carefully. You'll eventually find what works and what doesn't.
4. Add some special offer to increase click through rates.
5. Offer competitions or co-promotions to acquire email addresses cheaply.
6. Employ professionals. A good copywriter may cost $1000, but could double the click-through rate.

Buying Newsletters

Maintaining a regular newsletter is time-consuming, and many companies cannot now devote the necessary resources. Brokers exist to handle the sale and purchase of unwanted newsletters. Acquisitions need to be broadly similar in nature and readership to the present newsletter, and the acquirer has to explain to the clientèle that the newsletter now has a new owner, 'providing even more inside information and help', etc.

Software-Compiled Lists

The riskiest approach is for a company to compile its own lists with software that trawls sections of the Internet. Very extensive targeted lists can be acquired in this way, but none of the email addresses come from individuals or companies who have specifically opted in to a newsletter, and response rates may be poor. The approach is technically spamming, moreover, and so is frowned upon by the email marketing community. The approach works, but may damage reputations and bring threats of legal action. A more acceptable way is to collect email addresses through a 'squeezebox', offering some freebie for which recipients must enter their name and email address. Bulk mailing services generally provide a squeezebox service.

Running the Campaign

Email campaigns are a sequential operation:

1. Targets, budgets and approaches decided.
2. Lists identified or prepared.
3. Email written.
4. Trial runs conducted.
5. Final crafting by copywriter and designer (email is often in HTML format).
6. Test email sent to list owner, list manager, list broker (if any) and to the company itself.
7. Email edited, doubly checking:
a. subject line, which is all that many potential customers will see
b. all links, particularly link to the website page: mistakes here will render the whole exercise pointless.
c. company's own website and ordering facilities: it has to look and function perfectly to get sales.
8. Email approved and signed off.
9. Email blast: emails sent — Tuesdays through Thursdays usually give the best results.
10. Results tracked: list management companies provide reports: DIY shots are monitored by the client.
11. Campaign assessed, learned from, and a new campaign prepared.

Legal Matters

In April 2004, countries of the European Union implemented Article 13 of the Directive on privacy and electronic communications, which stipulates:

1. Email marketing messages can only be sent to natural persons (consumers) if they have given their prior consent (opt-in).
2. Email marketing messages can only be sent if there is
a. an existing customer relationship and
b. the customer has not initially refused commercial contact.
3. If a. and b. both apply, then the seller of a product or a service has the right to market to the customer its own similar products or services.
4. If emails are initially sent without prior consent, they must include a free and an easy-to-use opt-out mechanism.
5. Email must not disguise or conceal the sender's identity.
6. Email must include a valid address for recipient to cancel further emails.

Company law differences across the EU make 'natural persons', 'similar products or services' and 'existing customer relationship' open to differing interpretation. To avoid fees for legal interpretation or (worse) prosecution, many companies adopt full opt-in for B2B emails, an approach independent surveys have shown to be the only fully acceptable business practice. Opt-in permission lets companies identify customer requirements through check-boxes on the sign-up form, and so target those needs more effectively.

As of July 2005, Michigan and Utah have email laws that restrict what minors can view. Emails cannot contain information on goods or services illegal to under 18s (alcohol, tobacco, adult content), and cannot have links to websites that contain such material.

Resources

Purchasing Lists

1. Find More Buyers. 40-year old company with extensive lists.
2. Lists Now. UK and US consumer and business lists, plus opt-in lists.
3. Marketing File. UK, Irish, Dutch and European lists.

Renting Lists

Some of the many companies renting lists, which are usually more up-to-date and better targeted than sold lists.

1. Lake Group. Provide list management and list brokerage in the business arena.
2. List Broker. UK company with 1.6 billion names for rental. Updated daily.
3. List Broker Australia. 2500 Australian and international lists.

List Brokers

1. Charlwood. Independent broker providing most types of service, including response tracking.
2. Infinite Media. Will source from the 40,000 available US lists, and provide data processing and analysis.
3. PostmasterDirect. List management, brokerage and deployment
4. Prospects Influential. Canadian company specializing in B2B, consumer and email lists.
5. Topica. Builds list through opt-in emails, co-registration and newsletters.

Mail List Generating Programs

1. Fast Email Extractor. Includes selection from business directory listings, etc.
2. Taratula. Extracts from websites, user groups and search engines.

List Sources

List brokers draw their information from many sources, the more important being:

1. Standard Rate and Data Service. Advertising sources and rates in N. America.
2. DM News. Online newspaper for direct marketers.

Squeeze Pages

1. 10MinuteSqueezePages. Supplied with hosting.
2. PremiumSqueezePageTemplates. Large package, with associated graphics.

Bulk Emailing Services

1. 24/7 Media. Interactive products and services for marketers and advertisers.
2. AWeber. Well-known supplier of scalable email services.
3. Get Response. Good range of features and templates.

Bulk Emailing Software

1. Simplecast. Offers good range of services, including surveys and online forms.
2. Marketing Solutions. Both software and services.
3. PostMaster. One of a suite of email programs.

Legal Aspects

1. Information Commissioner's Office. ICO. UK laws.
2. The CAN-SPAM Act: A Compliance Guide for Business. FTC. USA. September 2009.
3. A Helpful Guide to Australian Spam Laws. GTP. Outline of Australian law.

Questions

1. Explain the advantages of email marketing.
2. How do you legally obtain email addresses?
3. How do list managers differ from list brokers?
4. Describe the step-wise approach of an email marketing campaign.
5. How would you stay within the law pertaining to email marketing?

Sources and Further Reading

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