DMers find that both e-mail and paper mail play a role in the media mix
STILL WAITING for e-mail to replace paper mail? Don’t hold your breath.
Some DMers have found that neither medium works for everyone, and that a number of customers and prospects actually prefer “snail mail.”
Take eZiba.com, a North Adams, MA marketer of handcrafted items. Last fall, the firm tested e-mail addresses from sources such as MyPoints.com, NetCreations and YesMail.com.
“They did terribly,” says Cindy Marshall, eZiba’s vice president of marketing.
In comparison, a 500,000-piece catalog mailing last November, divided evenly among 50 test lists, was so successful that Marshall mailed an additional 250,000 pieces a month later.
Both types of files have their advantages. EZiba has had success with e-mail lists from traditional direct marketing companies like J. Jill, Ross-Simons and Martha Stewart. But that universe is limited because few traditional files include e-mail selects, which eZiba wants for customer retention efforts, Marshall says. Of 100 data cards reviewed for a recent corporate gift program mailing, only two offered e-mail addresses.
But regular mailing lists have other advantages.
For example, the most useful selects for eZiba include the amount spent and product categories, both of which are available on traditional lists. E-mail names often tend to be those of people who received information without making purchases or responding to sweepstakes or special offers.
Another problem with e-mail lists is the inability to merge-purge lists. With each list administered by a separate entity, Marshall has no way of knowing if she is double-soliciting prospects, she says.
EZiba will continue to test e-mail as a prospecting tool in 2001, but its use will be scaled back. In 2000, e-mail outnumbered the company’s direct mail nearly four to one. This year, direct mail will account for 44% of E-ziba’s budget, with the shift coming as the company increases from three catalog mailings to ten.
“The economics of acquiring a customer are such that while a print mailing can be more expensive because of the catalog, your cost per order will drop if you can target effectively,” Marshall says. Anyway, she adds, a cost of $250 per thousand for an e-mail list can bring the costs close to those of an offline campaign.
“The only ones that are really successful are the ones I can get for less than $100 per thousand,” Marshall says.
In addition, print allows Eziba to control what the potential customer sees, rather than having them rush willy-nilly through the Web site, Marshall argues. And catalogs serve as a tangible branding merchandise, while e-mail messages are more ephemeral.
“I know that there is a future there,” she says. “My gut is that the e-mail market has about three to five years to go before it can be targeted.”
B-to-B Of course, eZiba sells hard goods. For a direct marketer that serves as an online matchmaking service, e-mail may be more suitable because of its click-through capabilities.
Yet2.com brings together firms whose research departments produce items they can’t use with companies whose own research departments might see value in them. The target audience consists of bench engineers.
“Engineers don’t have time to sift through paper mail,” says Leise Roberts, director of marketing. “If you want someone’s attention, they are reachable through e-mail.”
Yet2.com’s fall 2000 prospecting campaign involved both paper mail and e-mail, both highly customized.
But the customization proved to be the undoing of the paper mail campaign.
The quarter-million name mail test featured a personalized plastic card with a code that would allow recipients to log directly on to a Web page addressing their specific needs. (E-Dialog, the Lexington, MA-based firm coordinating Yet2.com’s e-mail efforts, often produces such sites for clients).
But the paper mail house put a second code on the card, in order to match it with the appropriate envelope. As a result recipients did not know which codes to enter.
As of early January, Roberts had received 400 responses-and 3,000 “no longer at this address” returns. “We had no problem getting those,” she notes grimly.
By contrast, a 60,000-name e-mail campaign that was sent out on Nov. 29, containing what Roberts described as a “virtual plastic card,” generated a 1.5% return, and was still pulling responses as of early January.
Roberts has tested varying messages in the mail pieces by sending recipients directly to what she calls a “controlled area,” similar to the clickthrough mechanism in the e-mail. But even the personalized sites couldn’t save Yet2 mail campaign, which pulled less than a 1% response.
While Roberts would like to improve the e-mail campaign’s clickthrough rate, she is satisfied with the back-end results: Between 20% to 30% of the engineers that log on to the site do register.
In the fourth quarter of 2000, print direct response ads accounted for half of Yet2’s advertising budget. Paper mail took another 30%, with e-mail making up the rest. Going forward, Roberts sees e-mail accounting for 50% to 60%, direct response print ads for 40%, and the few crumbs left going to paper mail.
Baby Boomers Some companies strike a balance by segmenting their customers and prospects by channel.
Gold Violin Inc., which sells products for senior citizens, has two types of customers: Baby boomers who want to purchase gifts for their parents, and senior citizens buying items for themselves.
“Pure play in any direction does not make sense,” says Marc Cote, director of marketing. Baby boomers are easier to reach, and more responsive, through e-mail than their older counterparts. Furthermore, senior citizens are reassured by the catalog that Gold Violin is a reputable company. “It is tangible and lends a degree of credibility,” says Cote.
Gold Violin also offers a different mix of products sells through each channel. Senior citizens tend to purchase canes or magnifiers for themselves. These are highly personal products that a baby boomer might feel hesitant about purchasing, even for a close family member.
The e-mail offers go to individuals who have signed up either through corporate intranets or on the company’s Web site. These individuals tend to skew to the younger side of Gold Violin’s customer lists, and communication with them emphasizes gift items such as photo albums or CDs or cassettes such as the Greatest Radio of the 20th Century series.
Gold Violin uses e-mail primarily to build on existing relationships with customers, as opposed to trawling for new ones. In addition to promoting exclusive items, e-mail messages alert customers to television features of potential interest, such as segments on the Today show.
“I don’t want our customers to hear from us only when we are trying to sell them something,” says Cote. “We are trying to build a lifetime relationship with them. We are looking after their best interests with news and related items.”
E-mail allows Gold Violin to carry on a relationship with customers who have opted in to receive these messages: The company does not yet have a cost-effective way to send messages frequently to customers for whom it only has a paper address.
Gold Violin did test e-mail prospecting, but Cote classifies the process as an “abysmal failure.” The company rented opt-in names of baby boomer women with annual household incomes in excess of $50,000. The one qualifier that Gold Violin did not select – and Cote admits this was a mistake – was whether they had made purchases online.
By contrast, e-mail campaigns to people that had give Gold Violin their address (roughly 20% of the company’s 25,000 customers) routinely net 15% click-through rates to the Web site. Of those, 33% end up making purchases.
While the company will test a few e-mail prospecting lists, Cote expects that catalog mailings, advertising, and corporate intranets will continue to make up the majority of its prospecting activities. In 2001, e-mail lists may account for at most 5% of Gold Violin’s prospecting budget.
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