June 30, 2006, 12:00 AM

E-Mail Marketing

Relevancy has been a buzzword for e-mail ­marketers for the past few years, with many considering it the key issue for mailers. Indeed, 80% of e-mail marketers that utilize segmentation tactics achieve between 1% and 3% higher conversion rates, according to JupiterResearch.

The goal of relevance is to find “what triggers me as a consumer,” says Matt Seeley, CEO of e-mail services provider Cheetahmail. But online retailers still struggle with implementing the concept, putting themselves at risk of losing sales to retailers that have mastered the art.

“There’s competition in the inbox,” Seeley says. “If we don’t get more relevant, we are going to see our ­customers go away.”

Understanding the potency

Retailers are beginning to understand the potency of an e-mail campaign, but most are still taking the “load and blast approach” in which they send out several times a month e-mails carrying the same message to every name on their lists, says Loren McDonald, vice president of marketing at EmailLabs. And many believe that if four e-mail blasts per month are good, eight blasts are better, he says.

But the downside of that method is that many customers will eventually tune out the messages. “Over the long haul, you’re potentially losing money,” McDonald says. “Your costs to re-acquire those lost customers can start to outweigh the short-term revenue you generated.”

Relevance can take many forms but the goal is the same-to give consumers unique value, whether it be in the form of increased utility, exclusive content or entertainment, says Shar VanBoskirk, senior analyst at Forrester Research. She notes that while consumers are fighting against ad overload, they still value permission e-mail, and that marketers must create relevant e-mails to retain that permission.

Relevance can start with something as basic as customizing e-mail messages at the subject line level. If subject lines ring true, contain branding whenever ­possible, are personalized when appropriate and ­articulate the value proposition of the e-mail in a concise way, recipients are more likely to open the message and click through to the web site, experts say.

Compelling subject line

That’s where segmentation of data and audience come in. “It all starts with a compelling subject line and success is relevant to the segment you are trying to reach,” says Don Zeidler, director of direct marketing for seed company the W. Atlee Burpee Co. “That’s the goal-getting the right message to the right person at the right time.”

Retailers can segment the customer base using demographics and geographic locations or they can use customer behavior and information gleaned from their web sites, stores or catalog operations.

While online merchants used to rely primarily on customer relationship management data in designing e-mail campaigns, retailers now are turning to web analytics and web log data for triggered and response messaging and real-time messaging, says Mike Hilts, president and general manager, Yesmail Inc. Often e-mail ­messages are triggered by a purchase or a failure to complete a purchase, he says.

“Companies are tapping into those types of web data services more aggressively than they did a year or a year and a half ago,” Hilts says. “Companies found out where all the good data are so they’re starting to bring those into their e-mail programs.”

Previously, only about 5% of Yesmail’s clients-those on the “cutting edge”-used data drawn from web analytics for e-mail marketing, he adds.

Using the analytics and reporting capabilities of many e-mail applications, retailers can develop campaigns and strategies to re-engage consumers.

Saving the carts

For example, Petco.com used e-mail to save abandoned shopping carts, VanBoskirk notes. She reports that the pet retailer sends out a “coincidental” e-mail message three days after a user abandons a shopping cart. The message includes not only the abandoned product but also two other high-margin items.

Retailers also are using information generated by e-mail, McDonald says. “A lot of our clients are ­starting to drill down and use a lot of the data and reporting that is so easily generated from e-mail,” McDonald says. “That’s one of the huge benefits of e-mail. You can understand down to the individual level their activity, their opening and clicking, what they’re clicking on, where they’re going on the web site, how long they’ve been subscribing, all of those kinds of things.”

An example is CheetahMail client The Wedding Channel, which takes a lifecycle approach to segmenting e-mail campaigns that helps reach customers with the right offer at the right time. “Once they get the wedding date, they understand where the bride is in the process, and, as a result, they understand what the relevant ­products are to show her in an e-mail,” Seeley says.

Using the lifecycle approach, WeddingChannel.com has experienced average total open rates of 33% and average total click rates of 8%, both exceeding industry averages. At the same time, the average unsubscribe rate decreased by more than 27% compared to before the company adopted that approach.

By analyzing customer data, retailers also can determine which customers on their mailing lists are still active, McDonald says. Often, retailers don’t even realize that customers have lost interest in their sites because the customer doesn’t formally opt out or unsubscribe. “The retailers have their e-mail addresses, they have their permission, but the customers have said ‘adios,’” he says.

A long-term process

Establishing relevance also can be a long-term process. Retailers may need multiple messages to demonstrate they understand the customer’s needs and preferences, Seeley says. “Don’t feel as if you’ve just got one shot,” he says, noting that as the retailer accumulates more data on a customer, it can send out additional segmented ­messages. “Don’t be afraid to do it over time.”

For example, a retailer might send a message acknowledging a first time buyer or a buyer’s birthday, he says.

For multi-channel retailers, segmented e-mail campaigns can be developed to drive traffic to a store or integrated with a catalog mailing, making those channels more effective, he adds.

With boosting open and click-through rates as a major goal in an era when consumers’ inboxes are flooded with e-mail, relevancy will remain a top priority for e-mail marketers.

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