Optimal OPT-IN
Adventure travel agency Away.com’s customers didn’t want to escape marketing e-mail – they wanted more
ONE OF THE MORE REVOLUTIONARY ASPECTS of online marketing is permission marketing, where companies ask customers for permission to market to them, as well as – hopefully – their preferences in how and how often they want to be marketed to. Of these, a company’s decision about how frequently they send opt-in e-mails is particularly critical: Overstuff a customer’s mailbox and they’ll ask to opt-out.
Seth Godin, former vice president of direct marketing at Yahoo! and author of “Permission Marketing,” cites CDNow’s experience as a lesson to learn from. “They started off doing it well, collecting a significant number of people who wanted to hear from them,” says Godin, who was with Yahoo! until January 2000. “At one point, one-third of sales were from permission-based e-mail.” But Godin says CDNow “ran into some financial trouble and started to leach at the asset. They sent an e-mail every three days, then every day. As a result people were ceasing to open the e-mails. They wasted the asset.”
Experts agree that the ideal way for a company to decide frequency is simple: Ask. “It’s all about testing,” says Godin. “If I’m on the kidney transplant list you can contact me every hour. What does the person want? Test it by asking them.”
Sue North, customer success vice president at permission marketing vendor Xchange Inc., says, “Can you give customers the option of saying, `Yes I want this every day?’ Companies are starting to do that testing, asking and collecting. My advice is, set aside a control, test against it, measure and ask.”
North adds it’s all about the preferences of the individual customer: One may want an e-mail a day, another only one per month. But most permission marketers are limited by resources and technology and are not in a position to segment and fulfill so finely, so they commonly offer a weekly or monthly mailing.
Online adventure travel agency Away.com let its customers choose how often they’d like to receive marketing e-mail. Between its two e-newsletters, Away.com claims to be one of the largest players in permission marketing online, sending out 20 million opt-in e-mails per month, centered around its flagship, Your Daily Escape.
THE GREAT ESCAPE Last year Away.com launched Your Daily Escape as an e-mail postcard featuring a high-quality digital travel photograph with a description of what it calls an “extraordinary trip” – kayaking in the Sea of Cortez, trekking in the Himalayas, taking a wine tour in Portugal. While the company originally offered subscribers the choice of receiving the e-card one, three or five days a week, Eric Brodnax, senior vice president of marketing, says the initial hypothesis was that people would want it less frequently.
As rare as it was for the company to give subscribers this choice, Away.com then had the even rarer experience of discovering subscribers wanted the e-card nearly every day. “Ninety percent chose the five-day-a-week product,” says Brodnax. As a result, Away.com stopped giving Your Daily Escape subscribers a choice and, in fact, has increased the e-card’s frequency to six days a week. More than 700,000 people subscribe.
The popularity of Your Daily Escape can be attributed in part to its desirable content. The attractive travel photograph and appealing description of an exotic trip is indeed a brief escape from routine for subscribers, an opportunity to see and dream about visiting some exotic destination or activity. Away.com’s most common demographic segment is outdoor sports enthusiasts aged 35 to 49, college-educated, e-commerce experienced, with an average annual household income of $60,000. The popularity of Your Daily Escape with this audience is also due to the discipline of the Away.com marketing staff in outfitting the e-card with the very softest sell.
“I view it as a branding vehicle – a vehicle to drive people back to the site – but we have not used it as a way to sell large quantities of product,” Brodnax says. “My approach is you get people to the site where they can browse, read articles, be inspired with the passion of travel. Then when they’re ready to travel, I want them to remember Away.com.” He adds the soft-sell approach is appropriate considering both the high frequency that subscribers receive the mailing and the low frequency that people actually buy extraordinary trips. “We sell low-frequency, high-dollar amount product,” Brodnax adds. “With our postcard, you may say, `It looks beautiful to kayak in Mexico. Maybe I can do that in a few months.’ But if I say to you, `Buy a trip today,’ you’re probably not thinking about doing that today, and you may get turned off.” The company reserves its sales offers for its weekly Away.com newsletter, which promotes select tours as well as travel gear and is sent to a separate opt-in list of 750,000 people.
A private company in business since the spring of 1999 and financed by Gannett and New World Ventures among others, Away.com is just starting to see repeat customers. “You don’t see people purchasing these trips more than once a year,” he notes. Still the company just brought on board a director of customer relationship management, Scott Finer, who’ll be charged with data mining, user profiling and refining its contact strategy.
Though Your Daily Escape may the most popular contact vehicle, it’s less clear how successful it is in converting subscribers to customers. Brodnax would not disclose conversion rates, only saying the e-mail is opened by 20% to 25% of subscribers every day. “We see a strong clickthrough rate, but an even stronger branding effect,” he says. “Not everyone clicks from the postcard to the site, but we see a large surge in untrackable traffic at the same time the postcard is arriving. It appears to have a strong follow-in effect.”
Brodnax says the next stage of measurement will be to see what percentage of subscribers are opening the e-card one day a week versus three or five times a week, which he’ll do using Xchange’s Xstatic software. “We’ll be able to see 20% opened it every day, or 100% opened it one day a week,” he said.
In the meantime, Brodnax says a particularly helpful measurement tool is customer feedback. “The biggest thing we hear about, often complimenting us, is how easy it is to change subscriptions, to change frequency or mix of what they’re getting. It convinces us that permission is absolutely the way to go.”
At press time, the Responsible Electronic Communication Alliance (RECA) had released its proposed best practices and enforcement guidelines for e-mail. Calling unwanted e-mail “a dark cloud over this industry,” Chris Wolf, president of the newly formed trade group, says the proposals include the four elements of the Federal Trade Commission guidelines: notice, choice, access and control. RECA expects to finalize the standards early next year.
In practice, the RECA notice principle would mean a marketer must tell e-mail recipients what information is being collected, how it is to be used, and who else may receive it. It also proposes that users have access upon request to their personal information and that they can change it. RECA would require its members to use a “single opt-in” procedure under which a consumer who wants to be added to an e-mail list checks a box on a Web page agreeing to do so. Then the marketer sends a “confirmed opt-in” e-mail indicating the name has been added. The only exception to this process is a pre-existing business relationship, according to the guidelines. A “seal of approval” will be issued when members join the group and agree to comply. Members are discussing having a third-party such as Ernst & Young in charge of enforcement. Complaints that can’t be resolved would be subject to an appeals process. What compels compliance? Geoff Smith, director of client programs for ClickAction Inc., noted that since most e-mail delivery companies are part of RECA, companies that don’t comply may have a difficult time finding a vendor.
