Delivery and open rates are abysmal, with poor response and redemption rates somewhat worse than direct mail and heading towards mass marketing. We keep justifying email’s high status due to it’s low cost which ensures an apparently high ROI. e,g. If the email cost is say $100, then obtaining $200 in sales is deemed a success. Yet the business concerned was more likely hoping for a $1,000 in sales.

The truth is that email’s role is not there to close sales. Let’s be honest. 99% of emails sent these days are for practical or information-sharing purposes. Not for really for sales. Results from a direct sales perspective suck.

How much do we invest in our best customers?

Constantly bombarding your customers or prospects with cheap, cheerful emails all the time, pushing products and not education, only cheapens the relationship.

FIRST, it must produce a sale.

DUH, right? Every promotion is designed to make sales. But when you’re talking about promotions for your customer list be it a cellphone number or email, they do more:

The number of promotions you send to your customers — and, equally important, the quality of the copy in those promotions — increases the number of times each customer will order from you this year.

So how many times should you contact existing customers?

Great question!

Well, back in the bad old days before the Web, nearly all of our contacts were through the mail. My theory was, “Out of sight, out of mind” — so I made sure my customers had something from me in their mailboxes every blessed week.

First, we mailed to them only on the first of each month. When we added a mailing on the 15th, response and average sale notched higher and cancellations dropped.

When we added a third mailing — more improvement in ROI and longevity. Finally, we went to a weekly mailing schedule and, once again, all our numbers improved.

Put simply, by quadrupling the number of times each customer heard from us, we more than quadrupled our orders and revenues — AND, miraculously, our cancellation rates declined.

Why? I’ll get to that next. First, I should mention that we had a high average sale and good margins, so we could afford to spend a fortune on printing and postage in those days. Back then it was expensive to, up to $1 per recipient by the time we accounted for the catalogue, stamps and effort. And even today, if you’re selling high value items to selected, high value customers, $1 per recipient can still be a real bargain.

Direct mail still works well. In fact in many markets it’s the best option. But today with e-mail that costs a few cents and texts not much more, there’s simply no excuse not to talk to your customers every week. Done well, the payback can be incredible with one text campaign giving the business a 1,650% ROI (read here), although a ‘modest’ 200-500% ROI is more typical of text campaigns.

The SECOND objective of every contact you have with your existing customers:

• It must make them feel closer to you…
• intensify their loyalty to you…
• and make them eager to hear from you again.

We call it “bonding”. Many of you that already belong to a club or subscription product/service have a strong loyalty to that brand, fashion shop, food establishment or a winery. This is what marketing is all about. Showing love back to the customer by keeping them informed with information or offers they care about…..

Yep, a seemingly handwritten note to highlight an area or offer as shown in red on the sales letter or brochure, left. No changes of copy, just something that’s overprinted to reinforce what has already been said.

It may look cheesy, and most Mac designers will scream, saying it’s amateurish and tacky. But like it or not, for most consumer products or services, this ‘old school’ direct marketing trick still works! In fact it can often double, even triple response rates!

This happens regardless of the media you use, be it printed mailings, sales letters, email or website copy, These ‘doodles’ have been proven to do a great job.

For those of you that are sceptical, try it out on your next email or direct mail campaign. Send out half using your standard ‘professionally designed’ version and the other 50% with the doodles added in. Yes, it may mean adding in colour, which costs more if printed, but if it achieves 50-200% higher responses, it’s money well spent. Even a 20% sample with doodles may be enough to prove it’s value in your own marketing.

However, my real question with using personalised email, yet alone personalised offers within emails, is DO THEY WORK? Is there an ROI? Are they more effective than other forms of offers, being generic coupons in our letterbox flyers.

I expect AIM Proximity, the people that do this fancy work for Progressive have invested heavily in the technology and data mining aspects. They may even win industry awards. But again, does it produce the results the client wants? 

My gut feeling is that the return on investment for this is likely modest, if any at all. It’s not that personalised, relevant offers don’t work. In most industries they do, but I’m not convinced that they would work in things we buy at the supermarket. It’s all just too much trouble for little reward. You have to print the offer out for a start and I, like many, don’t own a printer.

Now, in other industries this could work a treat. I look for big discount specials appearing in my email box for big ticket items like airfares and holidays, but groceries and then expecting people to print it out on their own printer, assuming they even have one?? I don’t think so. However, full marks for trying. All credit, as Fitzpatrick would say.

So, is it really the offer, or the media channel chosen?

I suspect that if they sent this same offer out as a highly personalised full colour direct mail piece, conversion rates would be 5-10x higher, although the cost (and special skills needed) are challenging, again posing the question of the viability of personalised offers for low value grocery items. I guess it’s all about percentages. Still, I’m looking for my next Onecard direct mail piece with anticipation. The last one was nothing like the fancy email version and only gave a generic offer. The personalisation was very, very basic, similar to things seen in the mail for the last 10 years, likely to keep the cost down.

Now, if they were really smart, they would send all this to my mobile phone, complete with a redeemable voucher. Do it in such a way that it would actually replace my clunky plastic Onecard. My mobile phone is my loyalty card, and much smarter. It’s already the rage in Japan, so I guess it’s only a question of time, since AIM appear to be developing this area.

If anyone from AIM wants to comment, or let us know what’s happening, please tell.

We already know that email isn’t perfect and is constantly battling with spam filters.   Delivery is a big problem and for a while, I really thought this technical issue was the main reason that email open rates were so low, typically 10-30%. Yet email experts tell us that the subject line is critical too and fine tuning this did provide some modest improvements pushing up rates as high as 35-40%.  Then  I noticed a couple of my clients individual campaigns achieved over  65% open rates, which for email marketing is almost unheard of. Obviously my old mail was getting through, but people were simply deleting them, since the focus was, quite naturally, on a new product offering or service. So, which campaign ‘subjects’ got opened at these 65% rates?

Well, it wasn’t those messages about new products, services, business opportunity or even [surprisingly] how to save money. Clear winners were those where the subject line and content was more on helping others, charitable works or personal interest stories. (These were often added as an afterthought). Yes, it seems even your customers may want to know if one of your staff is getting married, having children, celebrating an achievement or more often, know more about your charitable efforts or a local children’s fundraiser that you (and they) could help out.

It’s not just about selling – It’s about how messages make us feel

My own theory is that this type of message creates a tiny bond between the recipient and your company, or rather, your people. The lesson here is that your email communications should focus more around topics people can actually relate to, are relevant and perhaps makes them feel better as a person. Invoke an emotional response, which is something top marketers and psychologists have told us for decades. Its been proven that buying decisions are nearly always made from the emotional, not logical side of the brain. Feelings, it is said, is the language of the soul. Invoking feelings means you become less of a big corporate, and more a human being. It obviously builds trust and a closer relationship, which if nurtured will help build your business in the long term.

It perhaps reminds us that we are in fact human, not just another sales opportunity for someone….

Maybe it’s also the fact that we’re being bombarded with clinical, impersonal sales messages every day, and these little personal interest stories suddenly stand out. A tiny light in the darkness called marketing. It reminds us that we are in fact human beings, not just another sales opportunity or prospect for someone.

Where is Emails Sweet Spot?

I think even using the term email marketing puts us on the wrong foot today. Maybe email should be less about ‘marketing’ or selling, and all about educating, communicating and relationship building at a more personal level. It’s certainly what our readers seem to want.

Copywriters who write for all media channels have long noted that email alone is not good at pure lead generation. In fact it’s a bad choice. Too many like to use it this way purely because it is perceived to be cheap and easy to do. But even if you’re able to find or build an email list (which isn’t a cheap process),  sending out a product-focused email blast, like you’d put an ad in a magazine, to those you have no prior relationship with produces very poor results and likely to antagonize people. In fact they’ll probably blacklist or filter out your companies email address so that future emails are never seen, even if they do have some real benefit.

However for existing clients we already know and have permission to communicate with, email appears much more efficient and cost-effective than other media – Ideal for nurturing that relationship and keeping your clients loyal. Considering that finding a new client is 5x more costly than retaining (or regaining) one, this puts email in a very powerful and critical position in any company’s business strategy. And keeping a more human face on our email messages ensures that they’ll be opened, read and treasured.

Read also: Sometimes simple works  and Seth on Web 2.0

1. Give prospects something to look forward to. A personalized e-mail sent before your drop creates anticipation by alerting your target audience to a direct mail offer on the way. Your prospects know to look for your piece and are more likely to recognize it when it arrives.

2. Provide another look, another chance and another response channel. With limited time offers, an e-mail sent after your drop can provide a brief reminder about your direct mail offer and the deadline, as well as give prospects a fast, easy way to respond.

42 percent of direct mail recipients prefer to respond online.

3. Put personalized power into response rates. A recent Direct Marketing Association (DMA) study revealed that 42 percent of direct mail recipients prefer to respond online. Instead of a one-size-fits-all mail piece and business reply card, use customized direct mail to invite prospects to visit a personal URL, or PURL, such as www.johndoe.greatvendor.com. PURLs provide a personalized introduction to your company and a unique marketing message for each prospect.

4. Gather PURLs of wisdom. While visiting “their” PURL site, prospects can also be encouraged to complete a survey revealing their individual preferences, wants and needs or to opt-in for e-mail communications. This data allows marketers to craft the more precisely targeted offers and personalized communications that can lift your response rates in both traditional direct mail and e-mail marketing.

Then use e-mail to optimise your direct mail budget

A coordinated effort using direct mail and e-mail could help trim mailing budgets. Send an inexpensive postcard to alert clients or prospects that personalized offers and information are available and can be accessed electronically. Clients can then log in to a secure personal URL (PURL) to retrieve information or elect to receive the message by secure e-mail. Most will appreciate being given the choice too, knowing its a ‘greener’ option..

P.S. Want to lower your company billing costs? Read our article on the topic here

How times have changed. Now there’s multiple delivery issues, poor open rates, filtering and strict anti-spam legislation to contend with. Even website advertising is struggling, with rapidly reducing returns and effectiveness.

eMail - The good and the bad news

But email marketing remains attractive. No business should be without it. It just takes a lot more planning and care than it did when Debbie started out. Of course you still need a good database of readers, which again takes time and money to build.

Then there’s the problem of poor delivery and open rates rates. That is, of the emails that are sent, how many are either trashed by filters, or just plain ignored because of bad subject, offer or content.

The average email open rates email providers data is a miserly 20-40% and a much lower 13% average by e-Marketer who indicate that this open rate is steadily falling every year! Regardless, it’s all a fraction of what’s delivered by the Postie to your letterbox. We also need to factor in the costs.

Certainly if you’re send out 10,000 emails at a cost of around 5c each (for a professional html, tracked variety) vs 50c for direct mail, then email on the surface makes financial sense if you’re focusing on costs alone, not response rates, sales or ROI. (The problem most companies have is not owning a good client email list, which is another topic)

Good Subject and Copy Helps

Hiring an expert copywriter who is also familiar with all the internet spam issues can help, plus sending out all emails in text-only mode, certainly improves things delivery-wise, although is less attractive and enticing to readers.

No media works well in isolation

Open rates can also be helped by changing your software, service provider or using authenticated domains. But any hard-fought technical fix today, could break tomorrow, requiring ongoing investment.

Experts say an open rate of 80-90% is technically possible, but these solutions don’t come cheap and take an immense amount of planning. But as the cost climbs and to save money Marketers may consider reverting to established alternatives like radio, print ads or direct mail…

There’s simply no ‘Quick Fixes’ to all this within the internet community, as confirmed by a Forrester Research report.

Making eMail work better – Integration with other media

Unfortunately those within the internet community are only considering solutions from within – Unable to see the forest, for the trees. Sometimes, the solution is right in front of us, if we look ‘outside the box’…

Today no media can work well in isolation. Not print, TV, Radio or the net. As case studies have shown, email can be dramatically enhanced by other media, especially direct mail to a targeted, local audience. What’s more, this simple cross-media strategy is self-funding, giving a real return on investment.

P.S. Looking at the average 10% open rates for eCommerce storefronts, it’s easy to see why old fashioned direct mail provided such a huge boost in sales for online shop Bare Necessities featured earlier.

As mentioned in a previous article, email has changed a lot in just a few years. Once you only had to worry about getting the best subject line and content. Now there’s spam, deliverability and legal issues to content with. This diagram outlines the 8-point checklist to a good, effective email campaigns and will form the basis of articles and workshops planned for 2009.

It’s interesting that most of these points could equally apply to traditional direct mail marketing, proving that it’s not so much the media used, it’s the message and execution that’s important.

Check back for details soon…

Here’s an extract on the topic of shortcuts from the book ‘Small is the New Big’ by marketing super-guru, Seth Godin.

I did an interview yesterday with a magazine that specializes in marketing. They’ve got hundreds of thousands of readers, mostly in the direct-mail business.  “How do you build an e-mail marketing list” the reporter asked…

She didn’t like the answer.

1. I told her that the first step was to offer something in your e-mail newsletter that people actually want to read
2. The second step was to promise people exactly what you intend to give them
3. The third step was to create content that was so remarkable that people want to share it

I explained that if you take your time and keep your promises, it’ll build if it deserves to build…

She wanted to know about shortcuts.

At least three times she asked me what the shortcuts are – How do you do it if you were in  a hurry. Most important, how to do it if your message wasn’t that interesting.

It appears that American marketers still have plenty of time to do it over [again], but not nearly enough time to do it right.  If there were shortcuts, people smarter than you and me would have found them already.  There aren’t. Sorry.

Perhaps what this story tells us is that unlike all those millions of bogus ‘instant wealth’ stories that flood the internet, in 99.99% of cases, real results only come with careful planning and hard work.