April 2, 2004, 12:00 AM

The battle between good e-mail and bad e-mail

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ISPs offer multiple ways for marketers to deal with bounce-back and complaint issues. In addition to following CAN-Spam guidelines on e-mail formatting, e-mail marketers should check such basics as correctly spelled addresses as well as technical guidelines like not sending e-mail from open proxy servers, which are servers configured to allow outsiders to send e-mail through them. AOL publishes its guidelines at http://postmaster.info.-aol.com, where it also provides a phone number for its Postmaster Help Desk. Yahoo provides assistance at http://help.yahoo.com.

To maintain the best relations with customers and ISPs as well as abide by CAN-Spam, Performance Inc., a retailer that sells bicycles and accessories through three web sites, a catalog and 50 stores, has started personalizing the 500,000 e-mail marketing messages it sends each month. “In a weird sort of way, I’m glad CAN-Spam came along because it pushed us to do this sooner,” says Andrew Ruggeri, director of Internet operations.

In the past, he says, Performance blasted out e-mail messages to customers without personalizing messages or analyzing responses. “We bombarded our list with an endless stream of offers each week and we didn’t have any back-stream analysis to see the open rate or sales conversion rate,” he says.

Now, with help from e-mail services provider EmailLabs, a unit of CRM software company Uptilt Inc., Performance analyzes which customers respond to particular offers. And by adding other customer data, such as geographic location, it sends targeted messages with a greater chance of generating a response, Ruggeri says. “Now we can learn that a southern California customer likes mountain bikes, and that we should e-mail marketing messages about mountain bikes to that customer in winter,” he says.

Performance also routinely asks customers how often they prefer to receive marketing e-mail. “Overwhelmingly, customers said they wanted e-mail once a week,” Ruggeri says.

Better response

Performance, which started its targeted e-mail campaigns in late January, a few weeks after CAN-Spam went into effect, has already realized increased open rates in some e-mail campaigns, particularly those with coupons attached to customized offers based on interests customers revealed in prior campaigns, Ruggeri says. Open rates reached 50% of e-mails with coupons, compared to 25% without them, he says. He expects these rates to improve even more as he personalizes e-mail with first-name greetings.

Setting up the custom marketing system with EmailLabs took about two weeks to coordinate customer data, Ruggeri says. Performance spent a few hours to pull data including first and last names and postal addresses out of its customer database, then sent that data along with its customer e-mail list in an FTP batch file to EmailLabs, which coordinated the customer e-mail addresses and personal data with e-mail click-through data.

Ruggeri, a marketing specialist and two IT staffers spent about four hours in telephone training with EmailLabs, learning how to analyze reports on customer responses. The system includes an administration web page for analyzing reports, conducting customer surveys and setting up custom e-mail campaigns.

As their understanding becomes more sophisticated, Ruggeri expects to begin setting up automated e-mails triggered by particular customer events, figuring it may take about six months for his staff to fully learn the system through trial and error. Eventually, he expects customized e-mails to help build relationships between customers and managers of stores whenever e-mail recipients live near a bike shop. “We’ll get more sophisticated as we see the return on e-mail marketing campaigns and can judge the ROI based on increases in sales in different channels,” he says.

As the spam issue coincides with a push for more targeted and personalized marketing, e-mail service providers, including Bigfoot Interactive and ExactTarget, are promoting what they characterize as one-to-one marketing. In a recent survey of consumers, Bigfoot found 40% said retailers could do a better job of targeting them with e-mail marketing messages that cater to their individual needs.

Bigfoot is developing a system for a large retailer, which the company won’t name, to compile more than 500 attributes about individual customers-including personal data like name, address and age combined in multiple ways with shopping history related to dozens of products. It will then run multiple combinations of that data with all of the retailer’s product SKUs, prices and other details that could go into designing marketing messages tailored to a single customer’s interests. “Each marketing piece could be reconfigured to market to the same person in a million different ways,” says Michael Della Penna, chief marketing officer. Bigfoot takes from a week to a month to set up a retailer’s e-mail database with customer attributes to support personalized marketing. Bigfoot charges $1,000 to $2,000 a month, plus a fraction of a cent per sent e-mail.

Predictions

ExactTarget is working with retailers to develop customized e-mails that seek to connect a customer’s expressed interests with personal service from local store managers. It is building a database of customers’ interests, demographics and geographic locations by analyzing customer responses to e-mail messages, running pop-up surveys on web sites and asking store customers at the point of sale for information. “Now we can build a relationship with a customer and predict what they’ll be interested in,” says Chris Babbott, co-founder and senior vice president of marketing. And to build on the relationship, ExactTarget will work with retailers to send a personalized e-mail message from the manager of a store near a customer’s home.

Some analysts, however, suggest that true one-to-one marketing, where individual consumers get unique messages, is still outside of even these latest applications. “These systems will offer more personalized marketing and support event marketing, with promotions triggered by particular events, but they’re still segmenting messages to groups of consumers,” says Elana Anderson, analyst with Forrester Research.

Other technology systems designed to coordinate e-mail marketing best practices, meanwhile, have become easier and cheaper to deploy, says Keith Powell, senior manager in the retail practice at consultants BearingPoint Inc. “Even from two years ago, it’s much easier today to use tools that help e-mail marketers get things right,” he says. For example, he says, the latest marketing software applications from companies like Art Technology Group Inc., Blue Martini Software Inc. and Broadvision Inc. integrate e-mail opt-in buttons on web sites with marketing databases, making it easier for marketers to maintain permission-based e-mail address lists.

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