September 30, 2008, 12:00 AM

Money in the E-Mail

(Page 2 of 2)

It all looks so clear when you look at this chart. Why did Fashion Outlet not realize that they were losing money by mailing too often? Because this chart was not available to them. It is a chart that could only be developed after the year was over and the mistakes had been made.

During the year, Fashion Outlet managed 180 individual campaigns, each different, with products to feature, prices to determine and deadlines to meet. The pressure was on to get the e-mails created and out the door. No one was in a position to take the long view and see where all this was going.

To run a successful e-mail marketing program, you have to look at your long-term success in retaining subscribers rather than your short-term success in making this quarter’s sales goals. E-mail marketing is developing a dialogue between you and your subscribers. Find out what they think about your company and products. Find out what they want to read about, and how frequently they want to hear from you. If you do that, you can avoid falling into the trap that Fashion Outlet fell into.

There are several ways to do this. One is to give everyone who wants to unsubscribe the opportunity to select less-frequent e-mails instead of no e-mails. Or you can ask them if they want e-mails on only certain products-such as shoes, accessories, sport clothing, etc. One retailer who offered a less frequent e-mail opportunity found that it saved more than 25% of those who might have been lost-and those saved went on to buy more products.

Leavers are keepers

Another retailer examined the lifetime value of the unsubscribers versus the lifetime value of those who remained. Amazingly, the subscribers it was losing were more valuable than the ones they were keeping! This type of analysis forces e-mail marketers to work creatively to find ways to retain their subscribers-instead of just sending more e-mails to those who have not yet departed.

Finally, as an e-mail marketer, you should make sure that you are always testing. Before changing the frequency for everyone, change it for 20% of your file. See what happens to the deliverability rate and the number of unsubscribes. If Fashion Outlet had done this, it might have saved itself a lot of grief. The other part of testing is having a monthly review where you get your staff together to answer the question: “What changes in our e-mail program should we make based on what we have learned from the tests last month?” Many e-mail marketers do run tests, but without the subsequent review sessions.

E-mail marketing is hard work. Few people have the time and foresight to look ahead, to do tests, and to develop charts based on a year’s data. But those who are successful at e-mail marketing will be those who have the drive and persistence to do just that.

Arthur Middleton Hughes is senior strategist at e-Dialog, an e-mail marketing services company. He is founder of the Database Marketing Institute. Hughes can be reached at ahughes@e-dialog.com.

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