August 16, 2001, 12:00 AM

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

To stay effective, e-mail campaigns must become e-mail “conversations” through segmentation and message sequencing.


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.

“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.”


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