SPONSORED SUPPLEMENT: E-mail marketing

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Not only are consumers quick to frown on retailers that violate the bond of trust by sending unwanted messages, but ISPs are deploying tougher spam filters. By following a few simple rules, retailers can produce relevant campaigns that break through the clutter.

Rarely does a week go by that an online shopper does not find at least a dozen marketing messages in her e-mail inbox. Whether it`s a message promoting the latest sale, the newest arrival or a special offer for select customers, online shoppers are being inundated with e-mail marketing messages.

While some of the messages consumers receive are wanted, and even desirable, an increasing number are not. And the messages that consumers don`t want not only go straight to the trash, but many of them are deleted unopened. When this happens, it damages the retailer`s brand integrity with customers, who view unwanted mailings as a sign the retailer knows nothing about them and doesn`t care to learn.

Living up to expectations

"Every time a consumer decides to open an e-mail marketing message, it`s because they have decided it has some type of value," says Mike Adams, president and CEO of e-mail software developer Arial Software. "If that expectation is not met, marketers begin to train consumers that their mailings are of little or no value and the consumer learns to ignore their mailings and even think less of their brand."

As a result, retailers relying on e-mail marketing find themselves facing the same challenge that has arisen with other direct marketing media: how to keep messages relevant in order to turn sales, while respecting consumers` desires and rights to privacy.

It`s a delicate balancing act to be sure, but one that retail marketers can master by rethinking their e-mail marketing strategy and following a few basic rules that can help them keep e-mail campaigns fresh, desirable, and non-intrusive.

"It`s important for retailers to know their customer and use that knowledge when creating e-mail marketing campaigns," says Matt Seeley, president of CheetahMail, an e-mail marketing unit of Experian Ltd. "Transactional data and site movement tell retailers the story of who their customers are and what they want from them. This kind of information is what dictates content and frequency and leads to successful campaigns."

Gaining an understanding of customers goes beyond tracking what they buy, what they browse when shopping and how often they visit a retailer`s site. While that is useful data, it is little more than a snapshot of the customer`s personality, according to Seeley. "How a customer buys is almost as important as what they buy," he adds.

Cross-channel behavior

Successful retailers understand the behavior of the customer across all sales channels, as well as how they enter their site and they draw on that knowledge when crafting their e-mail campaigns.

"Knowing your audience as an e-mail marketer comes from paying attention to how customers shop and what they respond to," explains Luc Vezina, director of product and strategy management for Got Corp. Inc., an e-mail marketing company. "The goal is to collect information about the customer that helps create offers better tailored to their preferences. The information may be gathered over years, but it`s a linear progression in which small gains add up."

The first step to understanding customer preferences is to get the customer`s permission to send marketing messages. As basic as this concept sounds, it is not necessarily followed. For instance, some retailers ask for the customer’s preferences at registration but don’t act on them in the messages they send. Or worse, they apply the customer’s permission across multiple lists so messages never requested are sent.

The trust factor begins with the opt-in process. It is at that time that customer expectations are high about receiving mailings that are beneficial, as they anticipate doing business with the retailer. E-mail experts recommend that retail marketers take a proactive approach during the opt-in process to strengthen the bond of trust by giving customers the opportunity to tell them the types of mailings they want to receive.

The use of transactional e-mail for marketing messages poses a related but different set of challenges. While permitted under CAN-SPAM, retailers need to take care not to violate either the legal requirements on subject line and content placement or the customer’s trust and expectations relative to such communications. Sometimes that’s easier said than done.

"The first step in capitalizing on this opportunity is to carefully match your marketing message to the transaction at hand," explains R. David Lewis, vice president of market development for e-mail solutions provider StrongMail Systems Inc. "Relevancy is crucial when communicating with customers in a transactional mode since they have a higher expectation of being known. What retailers should be looking to do is extend the highly personalized web site experience into the transactional notices that flow from it, not create the equivalent of statement inserts for e-mail."

Quick surveys

The information can be gathered through a quick survey consisting of a few questions and boxes to check in response. Short, pointed surveys are best as they can be completed quickly and are viewed as non-intrusive. A good place to conduct a survey is at checkout, when shoppers can be asked if an e-mail message influenced their purchase decision.

For retail marketers who choose not to survey their customers about e-mail marketing preferences it is recommended they stick to sending the types of messages promised.

"If a customer signs up for a quarterly newsletter, that`s what they expect to see," says Stefan Pollard, director of consulting services for EmailLabs, an e-mail marketing subsidiary of J.L. Halsey Corp. "If retailers do not deliver what is promised, consumers will let them know their displeasure by not opening the messages and unsubscribing."

Nor should retail marketers ask for unnecessary information, such as postal address and phone numbers. "That`s information irrelevant to e-mail marketing and does not indicate that the retailer is paying attention to the types of mailings the customer wants to receive," continues Pollard. "Get what they`re interested in and the format they want to see that information presented in."

Once retailers know the types of marketing communications in which their customers are interested, the next step is to craft short, concise messages. By getting to the point, especially in the subject line, marketers can cut through the clutter and create a purposeful call to action that leads to customer interaction.

Be direct

"There is a link between the purpose of the message, its length, and the content," says Mike Hilts, president and general manager of YesMail, an infoUSA company. "The purpose of marketing e-mails that have a lot of fluff can be confusing. The objective of the campaign has to be clearly set and executed in the mailing. If a mailing is intended to support the publication of a new print catalog, that`s what it should do."

Once retail marketers understand how to create pointed relevant messages, they can then begin to focus on creating personalized messages. This means more than using such benign techniques as incorporating the recipient`s name into the greeting. Personalized messages are crafted on a thorough understanding of customer behavior patterns, purchases and preferences.

Sources for these data include Internet cookies that attach to a shopper`s personal computer when visiting a specific site and track movement across the site, entry and exit points to the site, and when during the session the customer abandoned the shopping cart.

"Sending a coupon to a customer who abandoned the shopping cart won`t necessarily get them to complete the sale if the item they were looking at needs to be touched and viewed in person," says Pollard. "Marketers need to look at what might trigger customer behavior before sending an e-mail message."

Marketers should also consider the types of products purchased when sending e-mail intended to create a cross-sell or upsell opportunity. In this case, timing is important because merely pushing a marketing message after the sale can fail if it comes too soon or too late. Missing the mark reduces the relevancy of the message and feeds the perception that the retailer knows little about its customers.

"Shoppers who buy a printer and toner cartridges are sure to need replacement cartridges down the road, but it may not be for a few months," says Pollard. "The retailer knows how long a cartridge will last and how many were initially purchased and can time the follow-up message accordingly so it is relevant and thoughtfully proactive."

The segmentation challenge

Segmentation of mailing lists along customer interests is another way retailers can personalize e-mail campaigns. This can be tricky for highly specialized retailers, because their customers all have the same interest, which is what the retailer caters to, as opposed to larger retailers carrying a broader array of goods.

"If a retailer`s catalog is highly targeted in the first place, it becomes more difficult to personalize messages and offers because their catalog is so specific to a particular interest," explains Arial Software`s Adams. "Besides, most specialty retailers don`t have the resources to gather data that granular. In this case, the best way to get personal is to ask the customer during a consensual contact what they want in their e-mail messages."

This can be done via a quick survey during a shopping session or that is delivered through an e-mail. "Customers will take the time to make their opinions heard, even if there is no reward," adds Adams. "If a small sample replies, it still provides insights marketers might not otherwise get."

Using list segmentation to create personalized messages can also be done on a broader basis, such as by season or type of event. While such campaigns are less complex to construct, they are still highly effectively as long as the marketer avoids doing an e-mail blast to the majority of the list.

"There are lot of complexities to creating personalized marketing messages and sometimes it`s better to move away from those complexities and personalize messages based on broader lifecycle behavior," says YesMail`s Hilts.

Another personalization option is adjusting e-mail campaigns in real time. This involves sending a small test sample, tracking what customers respond to in the message and moving those elements up or down accordingly or replacing them altogether. Once the right formula is hit on for specific customer segments, the campaigns can be rolled out.

Battlefield marketing

"The challenge is that retailers are conducting battlefield marketing, which means they need the tools to analyze the data in real time so they can make the right recommendations and create purposeful mailings," says Hilts. "If a message lacks purpose, it lacks relevance."

While YesMail is planning to add an artificial intelligence component to its predictive models, it is at least a year way from doing so, as artificial intelligence is only now seeping into e-mail marketing.

Hilts sees artificial intelligence as a way to help marketers better manage the rules placed around e-mail marketing campaigns of which there can be hundreds. "The rules around personalization can make execution pretty complex and that is leading some marketers to personalize on a simpler level around events or seasons," he adds.

Creating the right message to be read by the customer at the right time is only part of the battle. Retailers must still get them past increasingly stringent spam filters used by Internet service providers.

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Becoming certified with an ISP as an e-mail marketer, a process also known as white listing, is the starting point to ensure delivery. Still, mail can get bounced by filters that ferret out suspect words in the subject line or the body of the message. Some filters, such as Bayesian filters, are even capable of detecting whether the content matches up with the subject line.

What separates Bayesian filters from other spam filters is that they learn over time to identify new types of spam the more they analyze incoming e-mail, according to Got Corp.`s Vezina.

Filters that learn

"Bayesian filters are capable of learning to stay ahead of spammers," Vezina says. "These filters will calculate the density of the content and cross match specific words against other e-mails."

That makes it tougher for marketers that do not keep up with the latest spam-screening techniques to create campaigns that can get past such filters. "A marketer`s relationship with an ISP is just as important as creating mail with content that is not considered spam because they will base their filtering in part on the retailer`s reputation," Vezina says.

Becoming certified can reduce the scrutiny under which ISPs place a retailer`s e-mail campaigns, as well as provide tips for helping to prevent their mailings from being bounced by Bayesian filters. "It`s also best to talk to the ISP about delivery rates, do`s and don`ts, and what level of accreditation with them makes sense," adds Vezina.

Nevertheless, getting past a spam filter is in large part a guessing game as ISPs do not reveal the specifics behind their filtering process. "Unless a marketer has dedicated resources to understanding e-mail marketing campaigns there is no easy way to understand the filtering process," says CheetahMail`s Seeley. "The most effective method is to track delivery rates and trace any problems back to what made a message undeliverable."

The simplest method is for retail marketers to set up mailboxes through the ISPs that deliver their mail and send test messages to themselves. If a message is not received or goes into the spam filter, the retailer knows the message needs to be tweaked. Such tests can also show retailers how their mailing will look upon receipt by customers.

That is key since many consumers still use dial-up and other low bandwidth connections to the Internet that can hinder receipt of graphically intense messages, according to Seeley. "Monitoring inboxes for receipt and errors around delivery is important," he adds. "Conforming to spam filters requires a lot of vigilance and testing."

Getting back-up

In the event a message proves undeliverable when a campaign actually launches, retail marketers ought to have a backup e-mail address available, especially if their message is time sensitive.

"If a message isn’t delivered, retailers must be able to default to another e-mail address or delivery channel," affirms StrongMail’s Lewis. "The more time-sensitive a message, the more limited the opportunities to get the message re-sent in time if it goes undelivered."

Lewis recommends regular testing of e-mail templates and content to keep pace with changes in the filtering process. "Your reporting must take into account deliverability as well as which messages pull response," he adds.

The risk of a message being swept up by a spam filter is why more retail marketers are integrating analytics into their e-mail campaigns. "Reporting around transactional e-mail is crucial, because it helps put rules in place that say what type of message to serve up under specific conditions," adds Lewis. "Different marketing messages will be associated with different types of transactional e-mail and even customer segments. These rules will change over time and retailers must be able to make adjustments as needed. Again, whether it’s a purchase or registration confirmation or some other form of notice, the marketing message must fit the transaction or purpose of the mailing."

The key metrics that matter are open and conversion rates as they directly impact sales and tell marketers whether their strategies are working. "There is a tendency to get overly complicated in measuring the effectiveness of e-mail," says Adams.

The objective view

In many cases the best check for the effectiveness of a campaign is for retailers to step back and view their messages on a personal level. "Marketers need to ask themselves, `Would I respond to this message` and on what level?" continues Adams. "Marketers come up with a lot of great offers, but if the copy talks down to customers or fails to get to the point, then the message gets lost and the campaign won`t fly."

When interpreting metrics, retailers ought to keep the specific metric in mind. In some cases a marketing campaign pitching a high-end item might have a low open rate, but the campaign can still hit its sales targets. "Marketers need to keep in mind the end goal of the campaign at all times," cautions Adams.

Indeed, some retail marketers send e-mails to drive traffic through other channels, based on the type of product being pitched and the recipient`s preference for making a purchase. "Some consumers use the Internet purely to shop and then buy in-store, but that does not mean they are not receptive to e-mail," says CheetahMail`s Seeley. "If an e-mail campaign is sent Monday and residual in-store sales go up throughout the week, it`s a good chance the rise is directly attributable to the mailing."

Tracking sales made through offline channels, but generated by e-mail campaigns is tricky, but it can be done by attaching tracking codes to coupons or tracking in-store sales of a specific item promoted in a campaign. "E-mail is just one component of a retailer`s overall marketing strategy and as they begin to understand this concept, retailers are closing the loop," says Hilts.

As this loop closes, retailers are becoming more intimately knowledgeable about their customers and are using that information to create links within their e-mail messages that transport their customers to dynamic landing pages customized to their shopping preferences. In many cases, these pages can be variations of those already browsed by the customer, but tweaked in their design to have better appeal, according to EmailLabs` Pollard.

The holistic view

"Every e-mail service provider is getting more integrated with analytics to better understand their customer," says Pollard. "Linking consumers to the home page through an e-mail is no longer effective."

As retailers take a more holistic view of their customer base through analytics, they gain more clues as to why certain segments of their marketing list may or may not have responded to an offer.

"If the subscriber rate to the mailing list is going up and open rates and sales are down, retailers may need to begin looking at the groups within the list that are responding and adjusting the variables within the campaign for those not responding, one variable at a time," says Got Corp.`s Vezina.

Sometimes the solution is as simple as remembering the type of product being marketed and the core audience for it. "Basics play a role," adds Vezina. "Consumers understand that e-mail marketing is mutually beneficial, so marketers must never forget their audience."

With the volume of mail rising, retail marketers must carefully monitor the frequency of their marketing messages, as even e-mail that consumers consider consensual can be brushed off just by looking at the name of the sender.

Not surprisingly, sending mailings with too great a frequency can numb consumers` emotional attachment to the retailer, even if they are loyal to the brand. "If contact is too frequent, consumers will stop looking at even the subject," says Pollard. "Frequency is tied to the relevancy of the message and customer preferences for mailing."

Timed follow-ups

Send mail too infrequently and retailers risk lowering their profile with the customer to the point where customers can be lured away by a competitor`s mailing that hit at the right time. "Follow-up needs to be timed and fit into the overall strategy around deepening the customer relationship and as it relates to observed customer behavior," says Hilts.

Simple messages such as a "Welcome to the site," a thank you for a purchase, or a birthday greeting are simple ways for retailers to use e-mail to keep their brand in front of the customer without wearing out their welcome. Another variation of these strategies is to send a message inquiring about the satisfaction of the purchase a few weeks afterward.

"It’s totally appropriate and consistent with a holistic view of the customer for retailers to be looking for ways to convey their marketing message in service communications,” says StrongMail’s Lewis. "Retailers just need to be mindful that customer expectations are for transactional e-mail to be first and foremost about the transaction and for marketing content to be relevant and kept in proper balance. If they do so, the customer’s response will likely be positive and so will the impact on their bottom line.”

In other words, marketers are best served when they make the transactional purpose of the mailing front and center, both in terms of subject line and content placement. That also happens to be the legal requirement under CAN-SPAM. Additionally, marketers should avoid mixing in cross-sale messages that are irrelevant, too overt or too plentiful. While providing an opt-out to transactional e-mail isn’t required, it is a good practice to give customers a way to change how you communicate with them.

"Once consumers do business with a retailer, they expect that retailer to know what they want and not deliver inappropriate messages around transactional notices," Lewis says. "The effective marketing use of transactional e-mail should boost your bottom line results. If that doesn’t happen—and especially if customers opt for other, more costly forms of communication—it’s time to take a hard look at whether your marketing messages are satisfying customer expectations.”

Consistency and frequency

Consistency can also help retail marketers overcome consumer concerns about frequency of mail. When consumers know that a receipt will be sent after each purchase or that they will receive notice of sales at the beginning of each month, they are more accepting of the messages, even if they don`t open them. "Consistency in the subject line is how retail marketers get their customers to know and trust them," says Vezina.

If nothing else, retailers ought to keep in mind that non-intrusive mailings sent at regular intervals remind consumers of why they began doing business with them in the first place.

"If mailings are kept simple and genuine and avoid unnecessary hype, then they are usually seen as a positive by the customers," says Arial Software`s Adams. "That`s what makes e-mail such a fantastic bargain for marketers."

By following these basic rules surrounding relevancy, frequency, tactics to avoid spam filters and what analytics to track, retail marketers can create effective e-mail campaigns, even if they don`t have big league marketing budgets.

"The aim of all e-mail marketers is to make their campaigns relevant and actionable by applying online and offline sales data to the campaign," says Seeley. "You don`t have to throw darts to come up with an effective campaign."