Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
Every day Liz and Tom Sublewski find one or more email marketing messages in their respective e-mail boxes at home or work. More often than not, they delete the messages before opening them, and of those they open, they delete the majority after reading the first sentence.
The couple receives 20 messages a week between them and even more during peak shopping seasons. They regularly buy merchandise online and expect to receive many permission-based and non-permission-based email marketing messages. But they are selective about what they read. “We receive a lot of spam and once I recognize it, I hit the delete button without viewing it,” says Liz Sublewski.
U.S. marketers will send 209 billion emails in 2004, up from a projected 16.8 billion this year, according to Cambridge, Mass.-based Forrester Research Inc. Creating campaigns that overcome the apathy of consumers like the Sublewskis is a major challenge facing Internet retailers.
“There is only going to be more clutter,” declares Cathleen Santous, a senior market analyst for eMarketer, a New York-based e-commerce research firm. “It won’t be enough just to get a click-through, more emphasis is going to have to be put on achieving the goals of the campaign and that means getting recipients to buy.”
To help Internet retailers increase buy ratios from email marketing campaigns, software vendors and application service providers are delivering applications that generate more detailed buying data and meld text, images and audio.
These new tools are expected to give Internet retailers the ability to customize each message in a campaign, make the messages more enticing and provide proactive customer service by automatically sending messages that update customers on the status of their order or of a future auction or sale.
The new generation of programs can also compile customer buying profiles and personal preferences, track the percentage of messages that translate into sales and recommend frequency rates for individual names on a mailing list based on click-through patterns.
Additionally, email marketing programs can detect the technological capability of individual recipients. This capability is key, since some consumers do not have email programs that enable their computers to translate the rich media capabilities of email marketing applications into a readable format. Nor do all hardware platforms that can run email applications, such as personal digital assistants and web-enabled cell phones, have the ability to reproduce graphics and audio.
“Email marketers have to be experts in personalization and technology today,” insists William Park, chairman and CEO of Digital Impact Inc., a San Mateo, Calif.-based ASP for email marketing services. “The primary obstacle for the marketer is creating the best message to be viewed in the right media format.”
The increasing sophistication of email marketing applications has brought Internet retailers to understand that delivering the message in a format that can be viewed by the customer is a key building block for healthy click-through and purchase ratios.
Born to run a program
Programs that detect whether consumers can receive graphically rich HTML email documents send a message back to a server on which the graphics for the email are kept. Graphics for HTML email messages are kept separately on a server because unlike text, they cannot be embedded in an email message. When an HTML-based email message containing graphics is opened by an email program that can read HTML, coding within the message notifies the server to instantly download the graphics to that email. If the recipient’s email program cannot read HTML-based messages, no message to download graphics is sent to the server and the message appears as plain text. “Graphics have to reside outside the email message, but text does not because it resides within the email message,” says Kate Leahy, director of marketing for New York-based Bigfoot Interactive, an email marketing ASP and agency.
Once Internet retailers know the format in which to send each customer a message they can focus on personalizing content. “The technology is out there to get at different levels of information about the customer so you can create more targeted campaigns,” says Steve Rudman, vice president of relationship marketing for Pasadena, Calif.-based Ticketmaster.com. “The more customization, the more relevant your campaign.”
Ticketmaster, which attracted 3.5 million visitors during July, works with Lexington, Mass.-based e-Dialog Inc. to create targeted email campaigns. In 1999, Ticketmaster created a three-part campaign aimed at retaining customers and selling products associated with rocker Bruce Springsteen. The campaign targeted customers who purchased tickets to Springsteen’s 15 shows at the New Jersey Meadowlands. About 14,000 people bought tickets online. Ticketmaster frequently runs promotional tie-ins with performers to whose shows it sells tickets.
Phase one of the campaign sent a thank you note to each customer. Phase two, sent a few days before each show, was a message promoting links to sites where ticket holders could purchase Springsteen CDs, as well as links for directions to the arena from their home address and a seating chart. The final phase of the campaign sent a message to ticket holders within three days after the show they attended and provided the list of songs played during that show (Springsteen changes his set list for each show). The message included links to buy the CD for each song on the list and a promotion for a tour T-shirt available only to concertgoers who bought tickets online.
The campaign, which was customized to Ticketmaster’s specifications but did not require customized software, proved highly successful. Of the 49% of customers who clicked through the final message, 20% made a purchase. In comparison, email marketers average a 10% click-through rate on in-house lists and a 2.5% conversion-to-buy rate, according to Forrester Research. Ticketmaster declines to reveal the cost of the campaign or the return on investment.