December 31, 2002, 12:00 AM

E-Mail Marketing Grows Up

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One of the ways eBags, which has a list of more than 1.2 million customer-provided e-mail addresses, is attempting to get past e-mail filters is by developing new call-to-action phrases for subject lines. Phrases such as “Savings You’ll Love” and “Good News You Can Use” are replacing such stalwarts as “Order Now” and “Receive Free Shipping.” Those phrases contain words that activate e-mail filters. The company is also avoiding the use of exclamation points and dollars signs, two more trigger points for e-mail filters.

In addition, ISPs are imposing smaller mail boxes on customers to avoid adding storage capacity and those limits are increasing e-mail bounce-back rates.

Bounce-back rates hit 12.6% during the second quarter of 2002, the highest level since DoubleClick began tracking the data in 2001. While the rate declined to 11.2% the following quarter, industry experts don’t expect continued relief.

But even the most enticing subject line in a permission-based e-mail means little to consumers if it comes from a source they do not respect. Analysts recommend that retailers earn respect by controlling the frequency of their mailings. “The subject pertains to the relevance of the offer, but people aren’t going to open e-mail that comes from a source that blasts them with messages, no matter how relevant the offer,” says John Rizzi, president and CEO of e-Dialog, a Lexington, Mass.-based e-mail marketing firm. “You want to send relevant messages at a frequency at which the customer wants to hear from you.”

Determining that frequency is simple, he says: Just ask and then ask again down the road in case preferences change. “We ask customers for their preferences all the time,” Rizzi says. “The hard part is segmenting your list to manage the splits in frequency requested by the individual. It requires a real commitment.”

Another way in which retailers’ e-mail marketing is becoming more sophisticated is in driving customers to make offline purchases. Retailers are discovering that customers don’t necessarily prefer to buy online in response to an e-mail promotion. In fact, that is the major use to which some retailers put e-mail marketing. “The main purpose of our e-mail marketing is to drive more people into the stores,” says Steve Lambert, manager of e-commerce for The Men’s Wearhouse Inc. “We offer a limited selection on the web site and we really want people to go to the stores to see everything we carry.”

Tracking conversions

The Men’s Wearhouse just began e-mail marketing and has not tracked effectiveness yet. But housewares retailer Crate & Barrel experienced a 50% jump in sales last summer during the week it sent an e-mail promoting a multi-week furniture sale at retail outlets, according to DoubleClick, which coordinated the e-mail campaign. DoubleClick argues for the effectiveness of e-mail by noting that sales were not as robust the weeks before and after the e-mail effort, when the company used offline media to promote the event.

Crate & Barrel was able to track the lift through a bar coded coupon embedded in the e-mail, which could be printed for use at the store. E-mails were sent only to customers in ZIP codes near Crate & Barrel stores. The messages also included a link to a page within the retailer’s web site that previewed the merchandise on sale.

“E-mail coupons are good marketing devices, but their effectiveness really depends on the ease of access to a store,” Gartner’s Sarner says. “But accurately tracking the conversion rate is tough.”

E-mail and catalogs

Without a coupon or like tracking device, retailers must capture the name of a customer making an offline purchase to verify that the customer received an e-mail. Cross referencing the name of a customer who pays by credit card and check to the e-mail marketing list is a non-intrusive solution, analysts say. Cash customers can be asked whether they are responding to a specific promotion at the time of purchase, but they don’t always give an accurate response or sales agents may forget to ask.

In an interesting twist on using e-mail to promote shopping in another channel, eBags launched a catalog in November and tested e-mail marketing as a way to drive catalog sales. One portion of its target audience received only the catalog while another received both the catalog and an e-mail promoting the catalog. A third control group received only a general eBags promotional e-mail. While he won’t reveal details, Cobb says: “The e-mail-plus-catalog strategy does very well.”

In this case, eBags was able to measure the effectiveness of the two channels working together. But that is not always the case. “We use e-mail in conjunction with direct mail and catalogs, so it’s hard to correctly track which marketing channel prompted the sale,” says Geerlings & Wade’s Libby. “A lot of times, it’s a combination of messages and the mood of the customer when a message is received that determine the sales channel.”

As an example of how fuzzy the lines can become, Geerlings & Wade uses e-mail to promote an upcoming catalog but then also to promote wines that have been added to its offerings after the catalog was printed.

Just as retailers are becoming more channel agnostic about whether customers buy online or offline, they are also becoming more open to using a combination of online and offline marketing. “E-mail is part of the marketing mix, not the ultimate customer communications experience,” says Cobb. After years of spinning their wheels with e-mail marketing, Internet retailers are getting that message.

Peter Lucas is a Chicago-based freelance business journalist.

Click here for the 2003 Guide to
E-Mail Marketing Products and Services

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