E-mail use is growing and becoming more profitable.
The average amount of revenue generated from an online customer grew from $168 in 2001 to $208 in 2002, while the cost to acquire a customer online fell $8 to $30 during the same period, according to a new study by the Association for Interactive Marketing (AIM) and Return Path Inc.
Some 64% of respondents reported that e-mail primarily generates revenue by driving transactions. Forty percent said e-mail revenue comes from ads, sponsorships and banners.
The percentage of e-mail databases with between 50,000 and 500,000 records increased from 14% in 2001 to 24% in 2002. But, only 61% of marketers had e-mail addresses for 50% or less of their customer databases.
Marketers are fairly conservative when it comes to how often they send e-mail. Nearly 60% contact their customers no more than monthly. A number of them are also enabling their customers to indicate how often they would like to be contacted.
Most marketers (76%) use e-mail for promotions, product announcements and e-newsletters. Only a small portion (17%) use e-mail for billing, statements and invoices.
While opt-in policies are still the standard for commercial marketers, more respondents appear to be adopting opt-out policies: 57% of respondents use opt-in or double-opt-in methods to acquire customer permission to contact them by e-mail. That’s down from 71% in 2001.
Some 64% of businesses are handling e-mail in-house. The cost to send an e-mail has stabilized between $0.03 and $0.05 per e-mail.
Marketers seemed to contradict themselves on the value of online customers and their respective e-mail addresses. While the average cost to acquire an e-mail address is about $30, and online customers generated over $200 in revenue, only 50% of marketers were willing to pay more than $1 to get the new address of someone who changed their e-mail address.
Marketers still apportion little of their marketing budgets on managing and maintaining e-mail lists. Sixty-seven percent spend less than $25,000 annually on e-mail database maintenance.
The study, which surveyed 110 marketers from various sectors who perform e-mail campaigns, was released at the net.marketing conference. It is the second annual study.
AIM-sponsored Net.marketing runs through tomorrow at the New York Hilton.
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