A DM E-volution: Business and consumer acceptance of e-mail as a marketing tool skyrockets

Surprised at how rapidly e-mail marketing has grown? Think of it this way, offers Deb Goldstein, president of IDG Communications List Services, Framingham, MA: “An Internet year is like a dog year – one year equals seven. Three years and you’re an expert.”

With that kind of a time warp, it’s no wonder consumers and marketers have turned to e-mail as a cost-effective and convenient way to cut through Web clutter.

In fact, feels Peter Evans, vice president of marketing, Media Synergy Inc., Toronto, e-mail is becoming perhaps the most powerful Web portal.

“It’s reaching people who no longer surf the Web because they’re too busy,” Evans says, noting many people now find out about new sites in e-newsletters rather than prowling around with search engines. In the Web’s infancy, he adds, people were just looking to the Web for something new. Now they’re looking for ways to use the Web more effectively.

Last year, 1998, was considered “the year of e-commerce,” as companies invested in the backend of their Web operations, enabling their sites to take orders, says Palo Alto, CA-based ClickAction Inc.’s Jim Williams, vice president and general manager of e-mail services. Then companies realized they still needed to drive traffic and figure out a way to capture and keep customers. This made 1999 “the year of relationship marketing.”

Consumers are becoming more and more accepting of e-mail as a contact medium from businesses to help build those relationships, thanks in large part to the use of e-mail by reputable companies like L.L. Bean, Williams says.

Evans feels a major benefit of e-mail is that it’s a highly trackable medium – one can track who responded, when they responded and what they purchased. Even passalongs from friends can be tracked.

The cost factor is also to be considered, especially when compared to traditional DM methods, adds Evans, noting online computer retailer Zones.com has realized an ROI of over 300% with its e-mail efforts.

But while businesses do have to look at “sales, sales, sales” when considering e-mail response rates, Williams notes that to be effective, e-mail marketing must build customer relationships and encouraging repeat site traffic.

“You want people to visit your site – even if they’re not buying – to increase awareness,” he says.

As marketers are learning how to use e-mail, so too are consumers, says IDG’s Goldstein.

“When you’re involved in creating a medium, you need to teach people how to respond,” she says. “Building trust is important.”

That trust has grown more quickly in the business-to-business arena, a natural development, feels Goldstein, given that business people – unlike most consumers – sit in front of their computers all day long.

IDG was a pioneer in putting negative-option-approved lists on the market three years ago. The number of lists available is growing swiftly: The company had 10 e-mail lists available for rent at the start of this fiscal year, and now has over 23.

But for some companies, the number of available – and reliable – files isn’t increasing fast enough.

Doubleday Interactive, which markets niche professional titles under the Doubleday Select brand, is making e-mail an integral part of its DM strategy. But until the industry devises an effective way to do a comprehensive merge/purge on rented e-mail files, Mina C. Lux, vice president of DSI Interactive Marketing, says the safest and most cost-effective way for the company to prospect via e-mail is to sponsor e-newsletters for a particular segment.

“Lists are so expensive and we don’t want to do duplicate mailings” to the same customers, she says. The Internet, she adds, is “getting very noisy” and she doesn’t want to add to the cacophony.

Doubleday Select’s titles are aimed at very specific audiences, such as clergy members and nurses. This makes e-mail all the more challenging, as it takes finesse to make communications effective for a particular audience. For example, explains Williams, a gardening audience might respond favorably to a e-newsletter on planting and growing tips, while apparel customers may want to hear about new lines. Companies with time-sensitive holiday gift offers, meanwhile, would do well to offer discounts via e-mail.

Whatever the tact, the goal is to deliver value.

“We want to surprise customers in good ways,” says Evans, adding that repurposing content is one way to go about this. One of his clients, a U.S. publisher, will start a daily e-newsletter offering recipes later this year.

“Keep it short and sweet with the value up front,” offers Williams. “People don’t have the patience to sift through voluminous e-mails.”

“There is a netiquette different from the traditional direct mail model,” agrees Evans. For example, in subject lines, the word “free” can be a turn-off, because people may automatically assume it’s some sort of scam.

Compact and lean copy in subject lines is crucial, says Goldstein. The value for the consumer must be apparent in the heading, adds Barbara O’Hare, a spokesperson for Boulder, CO-based MessageMedia Inc. Those who use all capital letters, multiple exclamation points and come-on text like “You could be a winner!” will be losers online.

Timing is also another key variable, notes Goldstein. She feels the middle of day is a better time to send a campaign. People often have numerous e-mails to go through in the morning, she reasons, and probably do so quickly. Later in the day, you’re more likely to get their attention.

But whatever the time of day, marketers have to be judicious and not overuse e-mail as a contact medium. If you hit your customers’ e-mailbox three or four times a week, says Evans, they’re not going to be happy.

Overall, the e-mail landscape looks fertile, says O’Hare. “Corporations are learning how to do e-messaging responsibly – that they can’t spam the world.”

It seems like only yesterday that DIRECT was publishing stories about consumers – and businesses – not being quite ready to use e-mail as a marketing tool.

The reasons were many. There were no lists available. Consumers were wary of their e-mail boxes becoming full of what would soon become known as “spam.” And marketers weren’t quite sure how this new medium fit into their targeting arsenal.

The existence of this very supplement is proof positive that times have changed. E-mail marketing is here and rapidly becoming an important component in many companies’ marketing mix.

This issue of e-mail dispatch, sponsored by ClickAction, looks at three very different companies testing e-communications with their customer bases.

Take Boise Cascade Office Products Corp., for example. The business-to-business marketer is seeing impressive 20% to 25% click-through rates on its e-mail trials. On the consumer side, high-end men’s clothier Jos. A. Bank is testing offers such as $50 discounts on purchases of suits and free delivery for online purchases. And Franklin-Covey is targeting both B-to-B and consumer audiences with its e-mails about motivational training sessions and products.

Take a chance and open the e-mailbox. You could have sales.