June 2, 2005, 12:00 AM

Life After Spam

E-mail is more complex than it was, but remains effective

Things looked pretty gloomy for e-mail marketing when lawmakers, regulators and Internet service providers took steps several years ago to ban the most abusive practices of spam marketers. Online merchants worried that the anti-spam measures would limit the effectiveness of their e-mail marketing campaigns. Indeed, many retailers found their messages diverted into junk mail boxes simply because they used graphics or coding that triggered a red flag.

Over the same time period, the volume of e-mail messages exploded. EMarketer Inc. estimates e-mail volume in the U.S. will hit 2.1 trillion this year, up from 1.2 trillion in 2001. That increases the chances that customers weary of e-mail inboxes gorged with messages will send the retailer’s e-mail message straight to the trash bin.

More sophistication

But a funny thing happened on the way to e-mail marketing’s funeral: E-mail marketing refused to die. And today, with retailers adopting more sophisticated approaches to e-mail marketing-and possessing a better understanding of how they should use e-mail-e-mail has become a valuable weapon in marketers’ arsenal.

“If you’re in the e-commerce business, you have two things to really drive your sales-search, which is the ability to get somebody to come to your web site for the first time, and e-mail, which gets them to repeat,” says Arthur Sweetser, vice president of professional services and marketing for e-mail marketing company e-Dialog.

Getting to this point in understanding how to use e-mail wasn’t easy. In fact, it required a change of mindset by marketers-one that required sending what the customer wanted and not what the retailer wanted. Today at American Eagle Outfitters, for instance, e-mail messages are tailored to appeal to different customer groups, says David L. Brumback, director of operations at AE Direct. “It’s not about what I want to talk about so much as it is about what the customer wants to hear,” he says. “That requires understanding the data I have about that customer to make what I say more relevant.”

The industry still faces plenty of obstacles, but e-mail still can be an effective marketing tool, even in the post-CAN-Spam world. A recent Jupiter Research survey found that 10% of 2,229 online consumers reported they opened a promotional e-mail and made a purchase online immediately. Additionally, 17% said they opened a promotional e-mail and later made an online purchase as a result.

Everybody’s concerned

But the resistance hasn’t evaporated. The Jupiter Research survey also found that 73% of consumers have deleted promotional e-mails without opening them and 42% unsubscribed to e-mail newsletters in the past 12 months.

In today’s e-mail environment, to run a successful e-mail marketing campaign, online merchants need to build relationships and trust with their customers, experts say. “Everybody is concerned about e-mail-whether or not it’s going to survive because of spam, because of filters, because of all that,” says Reid Carr, president of Red Door Interactive. “But it comes down to basic principles, which is a matter of getting your target to trust you.”

To build trust, merchants need to gather as much information as possible about customers so they can personalize messages. “It’s all about relevancy and how we develop relevancy,” Sweetser says.

That’s the approach that American Eagle takes as its e-mail strategy has become more sophisticated, Brumback says. “When we started doing this five years ago, the vast majority buying online were male,” Brumback says. “Today, the vast majority is female. All of that information that comes with direct marketing changes how you talk to people.”

In fact, appealing specifically to what the customer wants is a key to e-mail marketing success, marketers say. “E-mail is about learning, it’s not a single event,” says David Baker, vice president of e-mail marketing and analytic solutions for agency.com. “The value of e-mail is learning the response patterns of your customers.”

Following the path

Tracking the path of e-mail messages can give Internet retailers deep insight into their customers, Baker says. That information can include which ISP the consumer uses, which links the consumer selected, and which products the customer bought, he says.

One of the best ways to gain access to that customer information is through an opt-in form, in which a consumer signs up to receive information from the merchant. Some e-mail marketers recommend double-opt-ins, a process in which a consumer registers at a retailer’s site and then responds to an e-mail from the retailer asking the customer to verify the opt-in.

“Numbers go up and down in terms of whether people open your e-mail, whether they’re going to act on anything that you send to them, so one factor in all of this is making sure they really want to receive your e-mail,” Carr says. “Companies that do double opt-ins have higher open rates, higher click-through rates and higher deliverability.”

What’s more, if retailers only offer opt-out marketing, they’ll run into problems with spam filters and other anti-spam measures, says Ziv Yaar, director of strategies for Molecular.com. “It’s an opt-in world these days,” he says.

Yaar says the best time for a merchant to get opt-in permission is at the time the customer makes a purchase. “At that point, they’ve made an investment in the product and they’re really a retention customer,” he says.

Another way to forge ties with consumers is through e-mail newsletters, Carr says. “We communicate to our clients to be generous with information rather than sending their prospects a weekly ad for their services,” he says. “They’ve got to think about their targets and what they’re concerned about, then tailor newsletters and e-mails that are going to enrich their lives.”

It’s about brevity

To make it more likely that consumers will open an e-mail, retailers should display their name, rather than their address, in the From field of the e-mail message, says Mike Adams, president and CEO, Arial Software, an e-mail software company. “The number-one way a customer is going to trust you from day one is looking at the From name in the e-mail,” he says. “They recognize that, yes, they ordered something from you, you’re a trusted company.”

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