If a company does an e-mail campaign right, it can not only build customer relationships, but also reap additional profits. E-mail involves only a fraction of the cost of a â€œd-mailâ€, or direct mail campaign. For example, Microsoft spent approximately $70 million a year on paper driven campaigns. Now, it sends out 20 million pieces of e-mail every month at a significant savings over the cost of paper based campaigns. Also, compared to other forms of online marketing, e-mail is a hand down. Click through rates for ad banners have dropped to less than 1%, whereas click through rates for well crafted e-mail are running around 80%.
Here are some important guidelines followed by pioneering e-mail marketers:
1. Give the customer a reason to respond: Companies should offer surfers powerful incentives for reading e-mail pitches and online ads, like e-mail trivia games, scavenger hunts, and instant win sweepstakes.
2. Personalize the content of your e-mails: IBMâ€™s iSource is distributed directly to customersâ€™ office e-mail each week, delivering only â€œthe news they chooseâ€ in terms of announcements and weekly updates. Customers who agree to receive the newsletter select from topics listed on an interest profile.
3. Offer something the customer could not get via direct mail: Because e-mail campaigns can be carried out quickly, they can offer time sensitive information. Travelocity sends frequent e-mails pitching last minute cheap airfares. Club Med uses e-mail to pitch unsold, discounted vacation packages to prospects in its database.
4. Make it easy for customers to â€œunsubscribeâ€: It is important that online customers have a positive exit experience. The top 10% of Web users who communicate much ore often online typically share their views by e-mails with 11 friends when satisfied, but contact 17 friends when they are dissatisfied.
Online merchants face many challenges in expanding the publicâ€™s use of e-commerce. Customers will have to feel the information they supply is confidential and not to be sold to others. Customers will need to trust that online transactions are secure. Companies must encourage communication by inviting prospects and customers to send in questions, suggestions, and even complaints via e-mail. Some sites include a call me button â€“ the customer clicks on it and his or her phone rings with a customer representatives ready to answer a question. Customer service representatives can in principle respond quickly to these messages. Smart online marketers will answer quickly, by sending out newsletters, special product or promotion offers based on purchase histories, reminders of service requirements or warranty renewals or announcement of special events.
Direct marketing must be integrated with other communications and channel activities. Citi group, AT&T, IBM, Ford, and American Airlines have used integrated direct marketing to build profitable relationships with customers over the years. Retailers such as Nordstrom, Nieman Marcus, Saks Fifth Avenue and Bloomingdaleâ€™s regularly send catalogs to supplement in-store sale. Direct marketing companies such as LL Bean, Eddie Bauer, Franklin Mint and The sharper Image made Fortunes in the direct marketing mail order and phone order business then opened retail stores after establishing strong brand names as direct marketers. They cross promote their stores, catalogs and Websites, for example, by putting their Web addresses on their shopping bags.