90% of e-mail marketers use it for customer retention, says Forrester

Online marketers rave about e-mail’s cost-effectiveness as a marketing tool, with larger companies typically sending an average 3 million e-mails per month, according to new research from Cambridge, MA-based Forrester Research Inc. But with consumer e-mail overload, high CPM costs and trouble with rented lists, e-mail has emerged as a better customer retention than acquisition tool, the research says.

Some 90% of marketers’ e-mail are sent to existing customers, with e-mail now accounting for about 10% of online marketing budgets. But though marketers expect to increase the number of e-mails they send in the future, they’ll need to recast e-mail campaigns as segment-specific, sequenced e-mail conversations to retain their effectiveness, says Forrester analyst Shar VanBoskirk.

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“Many marketers have made e-mail the foundation of their digital marketing strategy,” says VanBoskirk. But with consumers bombarded with more and more messages, marketers' enthusiasm for blast-it-out e-mail risks customer backlash, she says.

A customer-specific focus built on segmentation as to message content and frequency will make marketing e-mail stand out from the clutter, she adds. Though some e-marketers don’t have the capacity to support such customization in-house, delivery can be outsourced to vendors with the necessary technology platforms, while marketers work on probing customer data for customer segmentation, message development and “persona development"—using consumer data to create profiles that represent different user motivations.

And though marketers will seek to handle that in-house, moving from an e-mail campaign to an e-mail conversation approach — which Forrester defines as an ongoing series of e-mails tailored to customers' motivations and sequenced to guide them through the purchase process -- will also likely require outside help from specialists, particularly initially.

“Marketers want to move e-mail management in-house because they perceive it as involving basic message delivery – sending a single message to undifferentiated customers,” says Van Boskirk. "But as marketers execute more complex e-mail conversations, they will outsource to get the support they need.”