Challenges to e-mail delivery now focus on the sender and not the message. Retailers have to adopt new strategies to ensure a sparkling reputation.
By Don Davis
Consumers are increasingly disgusted with unwanted e-mail. They and the Internet service providers that funnel e-mail to them are continually adopting new tactics to keep out unwanted mail. That means retailers must keep on top of both ISP policy and consumer sentiment as they seek to deliver their marketing messages via e-mail this holiday season.
Consumer e-mail fatigue is evident in Forrester Research data that show 77% of online consumers felt they were getting too many e-mail offers and promotions in a survey late last year, compared with 44% in 2000. Nearly 27% of online consumers said they responded to the increase in e-mail last holiday season by reporting the sender as a spammer and 24% unsubscribed, according to a study by e-mail service provider Return Path Inc.
Overwhelmed by the growing volume of e-mail, most of it spam, ISPs are relying less on scanning the content of each message to determine if it is legitimate and more on assessing the reputation of the sender. “It used to be that content was key,” says Linda Muniz, senior vice president of Belcaro Group Inc., which operates ShopAtHome.com, a site that offers discounts at more than 2,000 stores. “They would really look at your content: are you using the word free too much, or mortgage or credit card? Now they’re looking at reputation.”
In fact, 83% of deliverability problems today stem from poor sender reputation, according to Return Path. That means retailers must focus more on preserving their good name in the eyes of the ISPs—and of their customers.
Just getting a consumer’s permission to send e-mail does not guarantee it will make it to the inbox: studies show 16% to 20% of permission-based e-mail is blocked as spam or shunted to a junk or bulk mail folder. “Marketers are wasting over $100 million a year on messages they send but that don’t reach the inbox,” says analyst David Daniels of JupiterResearch.
The strategies that worked a few years ago will not ensure e-mail delivery today. Here are 10 tips from retailers and e-mail experts that can help improve delivery rates in today’s environment:
Take complaints seriously
One sure way for a marketer to get a bad reputation in the eyes of ISPs is to have lots of recipients hitting the spam button. “If as little as 1% of your customers complain, the inability to communicate with your entire customer base may be the end result,” Microsoft Corp. wrote in a recent paper advising marketers on how to improve deliverability to Microsoft Hotmail accounts.
The first step is to know when recipients mark e-mails as spam, which is not reported to the sender the way an undeliverable address is. Most of the major ISPs, such as AOL, Yahoo and MSN Hotmail, now offer free “feedback loops” that marketers can sign up for to receive notification when their e-mail is marked as spam.
The next step is to quickly remove those recipients from an e-mail list—before they receive another e-mail and hit the spam button again. Marketers can reduce their complaint rates by as much as 40% by acting quickly, says George Bilbrey, vice president and general manager of the Delivery Assurance Solutions group at Return Path.
Apparel and outdoor gear retailer Sierra Trading Post Inc. minimizes spam complaints by making clear to recipients how they can unsubscribe, then deleting the e-mail address of someone who does unsubscribe within 24 hours, says Marc Angelo, online marketing manager.
But he says the main way to keep customers from complaining is by sending the kinds of e-mail they want. Sierra groups customers based on what they have bought and then sends e-mail with targeted offers. For instance, a customer who bought a ski helmet last year might get an offer for winter sports gear.
“The biggest tool is staying relevant and presenting our message to customers in a way that they feel makes sense to them,” Angelo says.
Pay attention to non-responders
ISPs also pay attention to low open and click-through rates from a particular sender, because that fits the profile of spammers who blast out messages to large numbers of e-mail addresses, hoping at least a few will respond.
Such low rates can damage a sender’s reputation, which makes it important to keep an e-mail address list up to date. As many as 30% of the addresses in a typical e-mail list may go bad in a year as consumers switch e-mail addresses for various reasons, according to FreshAddress Inc., a company that provides e-mail updating services.
Consumers who do not respond may not be interested any longer, and are likely to start hitting the spam button, further damaging the sender’s reputation. This happened to a large specialty retailer that found itself exceeding some ISPs’ complaint limits and having its e-mail blocked for days at a time, says Kirill Popov, senior manager of deliverability at e-mail service provider Responsys Inc., who declines to name the retailer.
Analysis showed that recipients most likely to report e-mail as spam were those who had stopped responding to offers, Popov says. The retailer then sent an e-mail to customers who had not shown any activity in six months, noting they had not responded and offering them an incentive to shop at the retailer’s site. Those who did not respond received a stronger offer three weeks later. The retailer purged anyone who did not respond to the second offer.
The effort knocked seven-tenths of a percentage point off the retailer’s complaint rate, enough to put the retailer back into the good graces of the ISPs, Popov says. While he would not provide further details, a decline, for instance, from a 1% complaint rate (10 per 1,000) to 0.3% (3 per 1,000) could mean the difference between a sender’s e-mail being blocked and going through.
While click-throughs are easy to track, open rates are not. That’s because the open report is triggered by a small image file in the e-mail, and many types of e-mail software in use today do not open images as a default, only rendering images if consumers change the setting. Thus, a consumer can open an e-mail without the sender knowing it, unless the recipient clicks to make the images appear.
For that reason it makes sense to look at other data before deciding to strike someone from an e-mail list for not opening e-mail. Pet supplies retailer Petco Animal Supplies Inc. checks to see if a customer has made a purchase or visited the site—registered users would be identified by cookies—before concluding the individual has lost interest, says John Lazarchic, vice president of e-commerce.
Eventually, he says, Petco will cut back unresponsive customers from two or three e-mails a month to one a month and eventually one a quarter, but does not purge them from its list.
Watch your volume
Complaints also go up when consumers receive more mail than they expect from a retailer. ShopAtHome.com saw that this fall when it tested sending out more than its usual three e-mails per week maximum—complaints went up 12%, Muniz says.
Consumers have gotten more savvy about e-mail, she says. “They know how to hit the spam button and unsubscribe, and if we overmail they will do that,” she says.
The ISPs also monitor the volume of e-mail coming from a particular sender and the number of connections each mailer is making to the ISP at any one time. Each ISP has its own limits, which can change—and which the ISPs rarely publicize because they don’t want spammers to know the rules. ShopAtHome.com, for instance, found its e-mail blocked by MSN earlier this year; after reducing the number of simultaneous connections to MSN from 200 to 50 the mail flow resumed, Muniz says.
She says her company now sets its e-mail servers to send out e-mail blasts in spurts to MSN—sending 1,000 then taking a break for a minute and sending out another thousand. “If we have not set it up properly they’ll go out of the e-mail servers as fast as they can,” she says. “That’s when we get in trouble with MSN.”
Don’t surprise the ISPs
Besides tracking a sender’s reputation, ISPs also track volume, and are most likely to allow in e-mail that’s in line with previous volumes. “Sending from the same IP address with consistent volumes and frequencies month after month is ideal,” Microsoft advises.
ISPs are getting more aggressive in monitoring e-mail from new IP addresses, says Bilbrey of Return Path, because they know spammers often hopscotch from one IP address to another to keep their mail coming through. That means legitimate mailers have to be careful when they move an e-mail server or switch e-mail service providers, because that will change their IP address and result in closer scrutiny from the ISPs.
A retailer planning to change its IP address should “warm up” the new address by sending smaller volumes of mail, Bilbrey says, then gradually move more mail to the new IP address as that address becomes known by the ISPs.
The warm-up process also comes into play when retailers outsource their e-mail delivery to a third party. Increasingly, mailers are demanding their own IP address that is not shared with any other mailers whose practices could damage the reputation of that address, says Russell McDonald, CEO of iPost, an e-mail service provider.
But, because “a new IP address is guilty until proven innocent,” delivery rates may go down initially from the new address, McDonald says. To avoid that, iPost sends small volumes of e-mail initially from the new address and shifts the bulk of the mail to the new IP address over three to six months.
Determine the right number of IP addresses
Some marketers send all e-mail from a single IP address, others from several. There are advantages to each approach.
Petco has used for years the same IP address for all its newsletter and marketing e-mails, Lazarchic says. That way a consumer need add only one address to an address book to receive all e-mails from the retailer, he says.
Another advantage of using a single IP address is that consumers are less likely to report an e-mail as spam when they recognize the “from” address. In a study last December by Ipsos for the Email Sender and Provider Coalition, 73% of consumers said they base the decision on whether to hit the spam button in part on who sent the e-mail.
But a third of major online retailers send e-mail from two or more addresses, according to a survey of 95 e-retailers by the Email Experience Council, part of the Direct Marketing Association. In some cases, the addresses were tied to sub-brands, for instance Lillian Vernon and Lilly’s Kids e-mails coming from different addresses.
Another reason for using more than one IP address is to make sure that transactional e-mail, such as order and shipping confirmations, are not blocked because the reputation of an IP address has been damaged by marketing e-mail, says Barry Abel, vice president of field operations at e-mail software vendor Message Systems.
“Transactional e-mail is of extremely high value, and there is a high risk to a company’s reputation and opportunity for repeat business if those mails are not going through,” he says.
Dividing e-mail among several IP addresses, also reduces the volume on each, reducing the likelihood any will be blocked by ISPs, he says.
Be careful when collecting e-mail addresses
Marketers are sometimes so anxious to add to their e-mail list that they offer incentives so appealing that consumers will sign up even if they don’t really want to receive e-mails from that retailer. Those individuals are likely to eventually hit the spam button, damaging the mailer’s reputation.
“In general you want to avoid sweepstakes where the prize will attract freebie-seekers who don’t really want your newsletter but are signing up for a shot at the prize,” wrote Chad White, director of retail insights and editor-at-large of the Email Experience Council in a recent report. White notes that only 9% of online retailers studied this year offered incentives to consumers who sign up for e-mail versus 27% last year.
The same principle applies when a retailer collects e-mail addresses in a store, offering a gift as a lure to sign up. If the gift is given on the spot, the consumer might give a phony e-mail address—which will then cause the sender’s e-mail to bounce and hurt the retailer’s e-mail reputation.
A better way to get a valid e-mail address is to offer to e-mail the consumer a coupon, says Austin Bliss, president of FreshAddress.
“Some retailers have done promotions saying, ‘Give me your e-mail address and I’ll give you a free tube of lipstick,’” Bliss says. “That’s not nearly as good as saying, ‘I’ll send you a coupon for a tube via e-mail,’ because then they’ll be more careful about the e-mail address they give because they want to receive that offer.”
Warn customers before changing ‘from’ addresses
E-mail is almost certain to go through if a consumer has added a company’s e-mail address to her address book, and ISPs typically enable images on such whitelisted e-mail as well. That’s why it’s important for retailers changing the address from which they send e-mail to notify customers and ask them to update their address books.
Blair Corp., which sells apparel and home furnishings online and through catalogs, recently sent three e-mails to customers advising them of the impending change and asking them to update their address lists so that they can “keep receiving our e-mail specials.” When the change was made, Blair highlighted it at the top of the first e-mail and again included an update reminder.
Blair changed its e-mail address because its old address, blair@blair.messages2.com, had been provided by a previous e-mail service provider. When it switched to Yesmail the company needed a new address and chose one, blair@e.blair.com, that is a sub-domain of Blair.com. That way it will be able to continue to use the same e-mail address if it changes e-mail service providers in the future, says Darren Schott, senior director of e-commerce.
This kind of advance warning of a changing e-mail address is a new and welcome development, says White of the Email Experience Council. “That’s something a year ago we didn’t see at all,” he says. He notes that cookware retailer Williams-Sonoma also recently sent out e-mails to customers with a note about a new e-mail address and a request that it be added to the customer’s contact list.
“Whitelisting is extremely powerful because it means those permissioned e-mails are going to automatically go to your inbox and have images turned on in most cases,” he says. Many ISPs and e-mail software clients automatically turn off images unless the sender is in the recipient’s address book.
This kind of communication is easy and essentially free, White says. “You just need to communicate with your subscribers,” he says. “It doesn’t involve going to the ISPs or anything complicated.”
White says more online retailers are using the welcome e-mails they send to consumers who sign up for more information to encourage whitelisting. In a recent survey of 122 online retailers, 62% asked that their e-mail addresses be added to the recipient’s address book versus 49% last year.
Take advantage of the e-mail consumers do open
The e-mail consumers open most often from retailers are the messages that confirm orders or shipments. A good way to get marketing messages through is to include them—in a limited way—in those transactional e-mails.
“Your delete rates are almost nonexistent and your open rates are through the roof, so why not take a portion of it and include marketing?” says Tricia Robinson-Pridemore, vice president of market and product strategy at e-mail service provider StrongMail Systems Inc. 75% of consumers open and read transactional e-mails frequently or very often versus 45% viewing other commercial e-mails they have requested.
As long as no more than a third of the e-mail contains promotional material it still qualifies as transactional e-mail under the U.S. Can-Spam act of 2003 that governs commercial e-mail, Robinson-Pridemore says. Unlike promotional e-mail, transactional e-mail need not be identified as advertising or include an unsubscribe link.
Petco is planning to add marketing messages to its order confirmation e-mails early next year as it moves to a service provider that can add HTML code, including images, to those transactional e-mails, which now are plain text. “It’s a great opportunity to reach out one more time or promote other products,” Lazarchic says. “In text it’s hard to get across; by moving to HTML it becomes a better marketing channel.”
Consider certification services
Companies like Return Path and Habeas Inc. work with marketers to ensure reputable e-mailing practices and grant them certification that some ISPs rely on in assessing a mailer’s reputation. A new certification service, CertifiedEMail from Goodmail Systems Inc., went live late last year and now is recognized by seven of the top 10 U.S. ISPs, the company says.
Petco went live with CertifiedEMail in September, in part encouraged by a test last fall in which click-through rates went up 38% on the e-mails that carry a blue CertifiedEMail ribbon icon across the top.
Lazarchic hopes the icon will convey that Petco’s e-mails are safe, whereas “e-mails from another pet supply retailer without that icon may or may not be.” He plans to use Petco’s newsletter to educate customers about the significance of the blue ribbon icon.
To be approved for Goodmail, a marketer’s complaint rate must stay below 22 complaints per 1,000 messages. Mailers are charged a quarter cent per message sent, says David Atlas, senior vice president of sales and marketing at Goodmail.
Some skeptics wonder if a mailer that has such a low complaint rate needs a certification service. Atlas points out that not only are Goodmail-certified e-mails guaranteed delivery, images are enabled and they also are not subjected to ISPs’ spam filters. That means marketers are free to use words like “free” and “discount” that might raise warning flags otherwise.
Authenticate yourself
In the last few years ISPs have nearly all adopted technologies that let companies authenticate their e-mail servers, so that the ISPs know that messages are not coming from spammers spoofing legitimate domains. While none of these technologies is expensive to deploy, retailers must keep track of which of the four competing authentication systems is used by each mailbox service.
“It costs very little,” says Muniz of ShopAtHome.com. “The hardest part is staying on top of which rules each ISP is using.”
AOL uses the authentication technology Sender Policy Framework, or SPF, and Sender-ID, while Yahoo employs Domain Keys and Cox uses DKIM. The Email Sender and Provider Coalition provides a chart showing the authentication systems used by 19 larger ISPs, and J.L. Halsey Corp., owner of such marketing specialists as Lyris Technologies and EmailLabs, is working on a more extensive list of second-tier ISPs, the company says.
Lyris’ second-quarter ISP Deliverability Report Card for the first time looked at ISP use of SPF and found it was one of the top 10 items used to decide whether to deliver an e-mail. Lyris plans to look at use of other authentication technologies in future reports.
E-mail servers can be set up to use the appropriate verification method for the ISP receiving the e-mail. Each e-mail server’s IP address is registered with the ISPs, and the authentication technologies prove that an e-mail is coming from a registered IP address, and not from a spammer masquerading as that IP address.
“We tell the ISPs you can accept any e-mail from ShopAtHome through this IP address,” Muniz says. “From anywhere else, it’s not us.”
But because any non-registered server is suspect, faulty configuration of a new e-mail server “is really catastrophic for deliverability,” says Bliss of FreshAddress.
“If you go to the trouble of saying these are the e-mail servers I bless, but then forget when you add a new e-mail server, that new mail server looks just as bad as a phisher because it’s explicitly unauthorized,” Bliss says.
Compliance with ISP authentication technologies thus rounds out the list of 10 tips for improving e-mail delivery rates today. Given the ongoing explosion of spam, both in volume and sophistication, e-mail marketers can count on encountering new barriers to the consumer’s inbox in 2008.
don@verticalwebmedia.com
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