Introduction
In recent years email marketing has really taken off with more businesses trying it than ever before. The reason for this is that more businesses are realizing that they can get just as much done through email as they have been through other avenues. In fact, email marketing campaigns are becoming more and more lucrative all the time. Many experts believe that in the future that most, if not all, effective marketing campaigns will take place through email.
Many businesses are choosing to try it out for one simple reason, and that is because it is cost effective. Instead of spending big bucks on advertisements in papers and spots on television or flyers to post in relevant spots, businesses can send out an email to their target audiences and let them know all about their product, service, or event.
Doesn't it make more sense to do this, which can be virtually free, when data shows that it works just as well as other marketing methods? Many businesses are leery of email advertising when they first find out but soon find that this is the way to drive their business.
Another reason that many people are trying their hand at email marketing is because they can be more focused in their marketing efforts. A lot of businesses have a hard time getting to just their target audience, making their work count. Email allows for the business to contact their target audience directly with no middle man. So, in addition to being most cost effective the business can get their intended message or information to the consumer much more directly.
Yet one more benefit to email marketing is that it is more personal. Consumers respond to what is familiar and personal and when you are marketing by email you can be much more personal than if you place an advertisement in a newspaper or have a commercial on television. You can address customers and potential customers by name and you are coming right to them to deliver the information that you want them to have.
Consumers respond to this as they feel like they are receiving individualized attention. This perceived individualized attention is what makes people want to buy, visit a location, or attend an event and that is what good marketing is all about.
"Remember the number one rule of sales: it's easier to sell to current customers than to sell to new customers. The first sale is always the hardest. You should concentrate on building a legion of repeat customers and email marketing can help you do that."
We are living in a time where more people get their news from the computer than they do from the television or the newspaper. Many other people get all of their entertainment from the computer, so why not send marketing through the means of communication that a growing portion of the population is the most comfortable with?
With more and more people getting online all the time and using it for all of their needs, it simply makes sense to start incorporating email into marketing campaigns as eventually this will be the marketing plan of choice for those that want to succeed.
With the huge impact that email marketing has made on web marketing, there is no reason to turn away from this potential money-making avenue. Still we have to understand and know how and when to use email, as well as when not to use it. This is crucial as it decides whether we'll make or break this money-making machine.
Just being as web surfers, we send out emails to our friends and companies most of the time. We will also check our mailboxes everyday for incoming emails. Email is seen here as effective ways by which you can maintain your relationship with people you know. From the marketer's point of view, email is a fantastic opportunity to establish good relationships with prospects and existing customers. As marketers, we can build this important relationship with customers by engaging in constant conversations. It is only during such conversations that we will be able to know and understand what are their buying patterns and preferences. We will be able to assess what is known in marketing language as "consumer behavior". With such data accumulated on hand, we can do a little more research and fine-tune our product or service and customer service, in order to achieve email marketing success.
Using email, we are able to inform customers and prospects about our new and latest products or services and all the offers, bonuses, freebies and discounts that we will be offering. What better way to make this announcement other than via email that is, as you know, cheap and fast. With the help of technological innovation, you can place your offers, bonuses, freebies and discounts in your email message and link them to your sales note is that your message has to be compelling, providing a valid reason and strong motivation for the prospect to click on the link.
Where speed is concerned, we know that there is no other medium that is able to make transmissions any faster than email. Email is via electronic technology and this is another reason why online marketers revel in this innovation. It works speedily, and is easily the best communication medium for the purpose of providing and maintaining customer relationships.
Complaints can be easily tracked and resolved almost instantly when incoming mails are checked regularly. Special requests from customers or prospects can also be easily acceded to by a simple click. Additional information about the product or service can also be relayed instantly via email. These efforts can be best rewarded only through email marketing.
We may think that the interest of the prospect may not be constant sometimes in any circumstance. Email dispels this perception. Email is one place where the marketer can sustain the interest of the prospect effectively. Placing the offer link in various places of the email message works wonders. This is tantamount to restating your offers to capture and remind the prospect of your offers. Simply, the reason is because we know that people read emails very quickly without digesting them! They scroll the messages without really paying attention to your words. So locating the offer link at multiple places often helps in this respect.
Email marketing helps online marketers in many ways. For any marketing campaign to succeed, it is imperative to have follow-up done regularly. We know that email is relatively inexpensive. All types of customers are important to marketers. Mailings received earlier must be followed up diligently. Surely no marketer would want to lose any of these customers who are precious to the bottom line. With the inexpensiveness of email, it makes sense to do follow-up diligently. Corporate marketers will endorse the fact that the email is really an effective tool to boost attendance for conferences. Of course, we do not forget that via email, people are always able to do last-minute registrations for any event without any fuss.
Email marketing will help online marketers to increase sales orders, retain customers, and importantly, to build much better relationships with customers. It is the only marketing medium that is not only fast and effective, but also cheap and inexpensive. Online marketers will be able to bathe in email marketing success.
A brief History of Email Marketing
Email marketing has a long history. It has been used since the mid-nineties when the Internet was still in its infancy. Marketers quickly grasped the importance of this channel and started using email in a more sophisticated way. They realized that emails could have personalized greetings, they could be scheduled, they could be measured more accurately, and subject line testing was discovered as a great way to boost response rates. However, the email marketing tools of the past were still mainly focused on consumer applications, where a one-time email can immediately influence a purchase.
Email marketing has its roots in the direct marketing industry, they were the people who filled your postbox to the brim with pamphlets offering to sell your house or fix your drain. This junk mail is what would now be considered spam in the digital age. At the advent of the Internet and email, people began to envisage a remarkably cheaper and logistically simpler marketing strategy. The first true form of electronic advertising arose in the late 1980's on bulletin boards, the precursors to the Internet. Bulletin boards were basically a rudimentary form of a modern online forum. It did not take long for the first electronic marketing campaign to begin; it took less than 8 months from the inception of the ARPAnet bulletin board to be precise. It was a natural progression, beginning with individuals advertising and selling electronics of their own designs to other enthusiasts. In 1987 the first corporation took advantage of the new electronic medium to great success. Email marketing was originally the domain of high tech companies as their audience was predominantly technically minded people. By this point, the exponential proliferation of desktop computers and greater access to the Internet fueled email marketing's growth to the point that it took over from traditional direct marketing by 1995.
Historically, software to facilitate the sending of mass emails arose very quickly from the labs of large universities as they realized the implications of having to enter hundred if not thousands of email addresses manually. The first automated emailing script released to the public was also one of the first open source projects focusing on non-scientific software, it was released by MIT in 1982. The script was a rudimentary loop that read every email address from a file and sent an email containing the contents of another file. With greater corporate interest in the 1990's, the software had to advance to allow for better control of contact lists, better reporting for an email campaign and support for scheduling. One of the main requirements by corporates was ease of use. The original mass email systems were, like all other applications of the time, text based. This meant that users had to call complicated instructions from the command line which was unintuitive and frustratingly easy to mess up. Even though Windows had been in production since 1985, it was only in 1991 that the first fully graphical enterprise email messaging system was released. The system boasted a list of rudimentary features that are still core to successful email messaging systems such as bounce reports and customization of campaigns. Because of its massive popularity as the primary communication passage for companies, email marketing software has evolved at a constant rate to include better support for customised emails, HTML styling, templates, reporting and ease of use.
Web based email systems like TouchBasePro were an inevitable evolution as the world logged on to the Internet and as the software as a service model evolved. One of the fundamental changes that occurred in email marketing services during the 1990's was the depth of reporting, from simple lists of received and bounced emails to in depth reports detailing every email's activities in graphical and understandable reports. Reporting has become a key factor in the usefulness of an email marketing service as it allows corporates to track the success of a campaign as well as quantifying a return from the investment into the campaign. The aesthetics used in campaigns has changed fundamentally, from the first text only campaigns to vivid graphical presentations that grab an ever more rushed and callus email viewers' attention. The radical influx of spam has led legitimate email messaging companies to develop methods to facilitate conscious registration of a subscriber as well as always giving that subscriber the option to unsubscribe. The use of registration forms has enhanced companies understanding of their client base by posing additional questions on the form. Understanding your client base is considered one of the most valuable marketing tools available and with advanced services such as TouchBasePro targeted marketing to certain demographics is easy and painless. With the evolution of email marketing unrelenting, the focus on getting relevant content to customers that care is the primary field of improvement in the industry today.
Types of Email Marketing
There are three broad types of email marketing, each one with its own characteristics.....
Postcard Emails. These are simple, brief announcements that you may want to make informing potential customers of a special offer. These types of emails should be easy for the recipient to scan in a few seconds and have a clear message. A postcard email will usually be restricted to a single call-to-action or have a 'click here' command with a link to the website to potential new customers. If you have a number of titles, the postcard email would be used to promote one title in the single email and will need to be targeted to the correct prospects. Past subscribers, people responding to competitions or website registrants will be a starting area to target.
Postcard emails can also be used to renew subscribers. They can be timed to be delivered to subscribers at set stages in their subscription to promote a renewal.
Email Newsletters. The primary purpose of an email newsletter is to build on the relationship with your customers. This should result in an increase in sales, but the focus should be on providing relevant, useful content that subscribers might be interested in. This will keep you in contact with your subscribers and show as a benefit for subscribing. If you have an opt-in option for newsletters for potential customers, then the newsletters become a way of acquiring new subscribers by including a special offer and details of how to subscribe. Newsletters do not always have to be about the magazine directly. For example, a magazine can send a newsletter providing information on an event and how to apply for tickets. The tickets may not even be handled by the publishers, but this will give subscribers the feeling that they are given first hand information from the magazine which will build your relationship with them.
Catalogue Emails. A catalogue based email is fairly self explanatory, being an electronic version of a print brochure listing particular products, with the primary goal to encourage customers to purchase. This type of email marketing can be used by fulfillment bureau and affiliates to advertise titles from a range of clients in one email. The email can be titled so that it gives the impression that it is from one publisher, but also offers ifferent titles as alternatives. An example of this is shown in Appendix 1 as used by Dovetail as a Father's Day campaign. The email offers titles from a range of clients, but is addressed from BBC Magazines as this will be directed to a customer that has a link with a BBC title.
Email Marketing Features
The basic functionality of email marketing platforms are described below.
List & contact management
Before sending an email campaign, you need a list to send it to. All email marketing platforms require a database of contact records and a way to import, export, and manage these records. Segmentation is critical in email performance, and some platforms are able to segment based on both “who you are” (your contact profile) and “what you do” (your response activity). For example, you may want to send a follow-up email on contacts in NY State who linked on your last message. It’s important to be able to easily search your database to fill each mailing list.
Message creation
Message creation may be done via templates, WYSIWYG or HTML editors, or by uploading copying or uploading files designed externally. For beginners, some platforms provide message creation wizards that take you step by step, through the process. Not all WYSIWYG editors are the same, so make sure you are comfortable with the feature. For example, how it handles images can have a big impact on creation time. The ability to rapidly create campaigns by copying and modifying previous messages can be a big time saver.
Deliverability
A great message and a quality list don’t guarantee good results. To engage, marketers must get their emails into prospects’ in-boxes, and most email marketing vendors use an opt-in system to ensure deliverability rates in the high 90s. Make sure your vendor maintains strong relationships with the ISPs (Internet Service Providers) so that opted-in emails are not interpreted as spam. As email volume increases, deliverability gains in importance.
Autoresponders
Autoresponders (sometimes called triggers) are marketing sequences designed to build relationships with prospects. For example, an introductory email may be followed day 2 with a product overview, and on subsequent days a product review, a testimonial, and finally, an offer. Most email marketing platforms today offer some form of an Autoresponder. More sophisticated functionality enables Autoresponders to be triggered not just by a signup form, but by behavioral responses (e.g., a click, or download).
Web form & landing page generation
At a minimum, your email marketing platform should enable you to create HTML code to be placed on your web site that allows customers to subscribe to your email list. Basic systems may offer only a single sign-up form but most marketers need to manage multiple forms. Higher-end platforms allow marketers to create forms and landing pages as destinations for email recipients. The ability to create forms and landing pages without getting your web development team involved provides the flexibility most marketers seek.
Reporting & Analytics
One of the most valuable aspects of email marketing is its measurability. All email marketing platforms will provide basic measures including list size, open rate, link rate. Higher end reporting includes unsubscribe rate, spam complaints, and rejection rate. Marketers often find value in platforms that measure list quality and growth over time, aggregate metrics across various lists and segments, and social media measurement such as campaign “likes”, “followers” and “Tweets”.
CRM Integration. For many years, email marketing operated in its own marketing silo. “Leads” were either undefined or sent to sales teams as Excel files of campaign “linkers”. Today, the trend is for email marketing lists to be integrated directly with sales CRM data so that a sales rep can see an individual prospect’s email marketing activity directly within the CRM system. Salesforce.com is the leading CRM system for email marketing vendors. Microsoft Dynamics is also gaining popularity.
Advantages of Email Marketing
For many organizations, email marketing has become an entrenched part of the marketing mix. Because email marketing is suited to virtually all organizations, from a 1-person independent consultant, to a small business, to a Fortune 500 company, the market potential is enormous and the user base continues to expand rapidly. More than 100 companies currently offer hosted email marketing solutions. The term, ‘hosted’ means the software is managed centrally (hosted) by the vendor, and customers are given login passwords in order to access the software. There is no installation or maintenance required as in traditional ‘installed’ software. Users of email marketing software can do everything from importing and managing contact data, to designing and launching campaigns, to tracking results. The hosted software model is sometimes referred to in the investment community as software-as-a-service (SaaS).
This White Paper examines the benefits and functionality of email marketing software, as well as the growth of the email marketing industry. We estimate current market penetration and anticipated growth rates for the industry as a whole, and also highlight some key considerations in selecting an appropriate email marketing vendor.
E-mail marketing has the highest ROI effectiveness rating of any direct marketing medium. Most marketers agree that e-mail has excellent cost efficiency and on a cost per response basis, e-mail marketing is ranked number one. In the table below e-mail has twice the ROI impact as direct mail.
Why email marketing has has grown to become a billion dollar plus industry with more than 100 vendors offering a wide variety of solutions? Anyone who uses email can understand why it is the quintessential communication tool. With email as an effective medium, there are a multitude of benefits to email marketing.
· IT’S LOW BUDGET
According to recent reports, email marketing is 20 times more cost effective than direct mail − in some cases costing less than a penny each! Wow! Think about how many clients you could reach for a mere one hundred dollars! It doesn’t take a math genius to figure out that you could double or even triple the return on your email marketing investment in one campaign! Can you afford NOT to devote a few dollars to email marketing every day?
· IT’S EFFECTIVE
We know that every business is unique and has its reasons for spending exorbitant amounts of money on direct mail, or print and TV ads. However, whether email marketing is a priority for your business or not, the statistics don’t lie. Email is the most cost-efficient marketing tool available today. Not only is it affordable, but the response rate of opt-in email is 50 times greater than advertising and 5 times greater than direct mail! But rather than take our word for it, let’s look at the stats:
1. The Direct Marketing Association (DMA) reported that email marketing generated an $43.52 in 2009 for every dollar spent. Non-email Internet marketing delivered $19.94 in 2008.
2. According to DMA Interactive survey results - email is the best online tool for increasing web traffic and customers to web sites and storefronts, according to 54% of small businesses surveyed.
· IT’S IMMEDIATE
If you’ve ever organized a media or TV campaign, you know how time-consuming it can be and how difficult it is to measure. Email marketing generates rapid responses and leaves a digital footprint that can be measured instantaneously. In addition to standard metrics such as open, click through and delivery rates, leading Email Service Providers (ESPs) provide tools to measure sales, conversions, file downloads, event registrations, newsletter subscriptions, social bookmarking − just about anything you can do online!
· IT’S TARGETED
Forget about “spray and pray” advertising campaigns that try to reach everyone with the same pitch. Let’s be honest, not everyone is a potential customer and that’s ok. But somewhere out there the ideal prospects are waiting to hear about your products or services and your mission is to reach them as quickly as possible. Of course, you have to identify them first!
Email marketing is one of the most efficient tools for managing contacts and creating targeted lists. In just a few clicks, you can segment your contacts using a variety of criteria, such as demographics, purchasing history, or interests. In that way you can tailor your messages and product offers to the individuals most likely to respond.
· IT’S EASY
Creating an email marketing message is almost as simple as writing an email. Major ESPs (like GetResponse, mailchimp and many others) provide all the necessary tools and materials such as professional HTML templates, web forms, auto responders or follow-up messages, and list segmentation and targeting capabilities, as well as automatic tracking and reporting. You don’t need any special knowledge or skills except one: crafting messages that are well written, relevant, and explain your product’s benefits clearly and concisely. After all, your messages are your brand, so you need to make a positive impression.
· IT’S AUTOMATIC
If you have too much free time and need more tasks to perform, do not read this section! If you need more time to focus on your business, think about how autopilot works in a plane. You just input the settings and autopilot does the rest. Well, email marketing has a tool called an “autoresponder” that’s like “autopilot” for campaigns! For instance, if you want to send a campaign message out on particular days after someone sign up to your newsletter you just create the messages and schedule the delivery from your Email Service Provider account − and all your messages will be sent out on time, automatically. This is important not only to save you time and money, but it’s crucial to stay in touch with your customers. According to the stats, only 10% of subscribers purchase after the first email contact. Usually it takes up to 4 or 5 contacts before subscribers purchase. So even though you can automate your messages, it’s up to you to “keep the ball rolling”!
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The Growth of Email Marketing
To understand the rapid growth of the email marketing industry, we must first observe that the use of the Internet continues to penetrate the US, reaching over 77% of the population in 20101, and email is the number 1 use of the Internet. According to the non-profit Pew Research Center, more than 90% of Internet users between 18 and 72 said they send and receive email, making it the top online activity, ahead of search engine use.2 Email is not only pervasive in Internet usage, it’s also the dominant method of business communication. According to a 2011 study done by the Marketing Agency, Merkle3, email is the preferred method of commercial communication by 74% of all online adults, beating phone, social networking sites, and text messaging by wide margins. The same study shows that 30% of total email time was devoted to commercial emails (versus personal), compared to only 17% in 2005.
The increased use of mobile and smart phones also bodes well for email. According to a Nielsen report released in August 2010, email usage makes up a42% of all mobile action, while time spent on social networks makes up only about 10%of the total.
As email marketing usage grew, so did the practice of “spamming” (i.e., unsolicited bulk messages sent indiscriminately). Spam filters were developed to reduce the amount of spam reaching an individual’s computer, and this presented a significant obstacle for email marketers. However, the CAN-SPAM Act of 2003,4 which delineates compliance requirements against spamming, proved to be a boon for hosted email marketers, as the software facilitates compliance with features such as opt-out, tracking of opted-out users, and spam evaluation testing for email campaigns.
The Size of the Hosted Email Marketing Industry
Estimates of the size of the email marketing industry vary widely. Forrester Research estimated 2009 email marketing vendor revenue to be $1.2 billion. This estimate may be conservative. Based on US Census numbers and a review of more than 50 email marketing vendors, Marketing Growth Strategies, LLC, estimates a total market size of $1.5 billion for 2010 and an annual growth rate of 20% to reach $2.6 billion in 3 years6. Table 1 below shows the numbers of businesses by employee size and our estimate of the penetration of hosted email marketing vendors for each category.
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