Rs 22,000 Crore and Growing

On an average more than 30 billion e-mails are estimated to be sent worldwide each day. Of these, less than 20% are to known people. The others are marketing messages of one nature or the other. And emerging from this is a new industry–e-mail marketing. This includes software sold for managing e-mail lists, service providers who offer e-mail management services, renting out of subscriber lists and related services. Forrester Research estimates that in the year 2003 e-mail marketing internationally will be a $4.8 billion (Rs 22,000 crore) industry. Though underrated today there is every possibility that very soon e-mail will emerge as a strong competitor to direct mailers sent through postal and courier services.

Eventually, it will replace these as the preferred mode of marketing communication.

Shyam Malhotra

“An IT portal found 15% opening rates from 1.7 million newsletters sent in a single month”

The benefits are obvious but they bear repetition. Low costs, global reach, ease of management, flexibility and usage possibilities across the entire spectrum of marketing needs–from pre-sales to post-sales relation management. The limitations are also known–resistance to spam, low reach of Internet connections, single line window for inducing customer clicks and not being a part of a must read/see medium like television and newspapers.

Yet the success stories of e-mail campaigns are emerging. One of them is a British Airways campaign to strengthen brand awareness and get new members for its customer retention program. It selected people who travel frequently as well as people who were interested in airfares from a database of opt-in (those who have given permission to send mails) e-mail addresses. The message sent out was simple with a contest running in it. The results–87% of the e-mails were opened and read, 16% to 37% click-through rates were reached on the messages and around 45% of the people who clicked subscribed to the contest. Telfort–the Dutch branch of British Telecom–launched an online subscription campaign, which received outstanding success when 52% visited the Telfort site, 3% answered directly and 32% subscribed to receive new offers. Asap Software–a software licensing firm–wanted to inform its opt-in customer list changes in the licensing programs. It also wanted to get a survey done about customer demographics. When it sent the message it was surprised by the results–over 10% filled up the survey. Considerably higher than what most print mailers will provide. Cyber India Online (www.ciol.com) sent out 1.7 million opt-in newsletters in September. Average opening rates exceeded 15%. And from those that were opened about 25% had further clicks recorded.

If e-mail marketing has not taken off in a bigger way so far it is because mainline marketers are yet to put their might behind the medium. It is the smaller budget organizations that are using the tool. The nuances of marketing are yet to find their way into e-mail messages. Most of them are bland and very often the main message is poorly designed. Consider the effort that is put into the design of a print ad and a TV commercial. And consider the effort that is put into sending an e-mailer. Most senders believe that getting the e-mail across is the end in itself. Only a few are experimenting with the media and making attempts to use it more creatively. And those who are able to do so are getting results, which are more than favorable as compared to direct contact marketing programs. While customer acquisition attempts using e-mail are increasing, marketers have found it be a useful medium for building relationships. Witness, for example, banks that now offer statements by e-mail–and will actually charge you for statements through print while e-mail statements would be free.

The key word–as in any other media vehicle–is ‘target’. Today, most of the marketers send mails to a huge database of people who have vaguely–if at all–shown some interest in the product. The result is poor rates of response and a denunciation of the tool itself. A method used to increase the suitability of the target is to use permission-based lists. These are better but not good enough. Many customers give the permission to receive mails but lose interest very quickly. What really works is opt-in lists. The customer here has been proactive and, therefore, wants the information to remain updated. These get the best response. Content-based or content interleaved marketing messages work better than plain commercial ones. To that extent, e-mail exhibits the same pattern as any other vehicle. Not surprising since the receiver is a human being like in other cases.

The marketers experiencing e-mail successes are those who are keeping a constant eye on certain three key variables: target audience, content and results. If you miss the person your product has a benefit for, you miss your target. If your content rambles on and talks business in every line, you lose the interest of your customer. And if you just measure success by the click-through rate and the sales figures, you lose long-term benefits like branding and relationship building.

The Gurumantras for e-mail marketing are similar to conventional marketing but the execution is very different. Success requires adapting them to the new media option.

First: Send your messages only to the target audience. Not because it will cost you much more to send them to many others but because they are the only ones who will respond. Critical difference with print mailers. In the case of print the costs force you to limit the mailings.

Second: Try and use or develop opt-in lists. These are the ones that bring in business. Others bring in only response. Opt-ins are far more easier to get for e-mail than for print mail.

Third: Build a relationship with these customers. They appreciate good and useful content. Building and maintaining relationships with customers, collecting data and feedback are far easier. But customer confidence is low at the moment. That has to be built.

Fourth: Keep the content simple and brief. No one has time for more. A typical e-mailer also does not have too much space.
As a format e-mail is half-a-page of an A4 print. That is all the space you have to get your message across.

Fifth: Try and make the message interesting. That is not new. But the methodology of making messages by e-mail interesting is very different. The scope of visual impact is increasing but is not as powerful as well designed print mailers. So the interest has to be put in the content.

Sixth: Focus equally on response and brand building. Brand building impact of e-mailers is being discovered. There is no reason to believe that they do not help build brands. There are not enough case studies at the moment.

Shyam Malhotra

The author is Editor-in-Chief of Cyber Media, the publishers of Dataquest. With inputs from Saswati
Sinha.