E-mail campaigns are poised to displace traditional direct mail
E-mail marketing campaigns could displace traditional direct marketing campaigns as a more cost-effective way to acquire and retain customers, according to new research from Gartner Inc.`s GartnerG2 research group.
Direct mail has reached its peak,” says Denise Garcia, GartnerG2 research director. “As e-mail use, familiarity and trust increases, consumers will become more comfortable with accepting advertisements through their computers.” The U.S. Postal Service forecasts that direct mail pieces will account for less than 50% of mail received by U.S. households by 2005, down from 65% in 2001. At the same time, GartnerG2 projects that ad revenues from e-mail campaigns will reach $1.26 billion this year and $1.5 billion by 2005.
E-mail marketing is more cost efficient and more easily measurable than direct marketing offline, according to GartnerG2. It takes 4 to 6 weeks to complete a direct mail campaign and responses take an average 3 to 6 weeks. By contract, e-mail campaigns take only an average 7 to 10 days and responses, an average of 3 days. The typical lifecycle of an entire e-mail campaign from creation to response is about one-tenth that of a traditional direct mail campaign, says Garcia.
E-mail marketing also costs less than direct mail: about $5 to $7 per thousand to execute versus $500 to $700 for direct mail, according to GartnerG2.
Opt-in e-mail campaigns generate a higher response rate than direct mail, adds Garcia, with a click-through rate averaging 6% to 8%. The response rate for non permission-based e-mail campaigns is about the same as for direct mail, about 1%.
To gain maximum leverage from e-mail campaigns, retailers should use advanced personalization in addressing customers and limit the number of e-mails to consumers to no more than two per day, GartnerG2 recommends.
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