Email marketing is becoming one of the most preferred marketing tools for communicating and developing relationships with customers.
According to a Jupiter Research forecast, spending on email marketing will reach $1.1 billion in 2010 from $885 million in 2005. In the US, marketing email volumes is expected to reach 838 billion marketing messages in 2013 (source: Forrester 2008).
Email marketing is indeed a powerful way to reach out to customers. More than one-third of internet users say they check their email throughout the day. (source: AOL/Beta Research Corporation, June 2008).
Listening to marketers, I often feel that email marketing is appreciated for three main reasons:
- LOW COST: while direct mail requires significant marketing budgets, email campaigns can be executed at very low costs. Low costs allows marketers to promote to their entire customer and prospect database (instead of picking up consumers deemed worth a mailing). Also, marketers can execute campaigns much more frequently (an email sent once day a common practice among retailers).
- EASY ROI CALCULATION: Estimating the realistic ROI of an offline add campaign has always been a tricky issue for marketers. Calculating the ROI of email campaign is easy, simple and automated.
- SHORT-DELIVERY TIME: we often find that the lead time of a catalog mailing campaign is about 3 months from kick-off meeting to mailing execution date. The lightness of email marketing makes marketers more responsive to purchasing trends. Also a real-time relationship with customers can be engaged with triggered-campaign such as welcome campaigns, abandoned-product campaigns, etc.
Most marketers leverage those three items in a satisfactory manner. However, we have proven at AgilOne that email marketing can do much more. The points listed above are the bare improvement of something that existed before with “traditional” marketing tools.
Taking a broader view, we are convinced Digital marketing heralds the advent of a new marketing paradigm. A new era abundantly researched by scholars where mass marketing is superseded by a personalized uninterrupted relationship between company and consumers. In this new paradigm, marketers personalize their message, offer, timing, and touch strategy for every single consumer relying on the insights produced by advanced analytics techniques.
Email marketing is one of those tools that pave the way for this new era. However it is surprising to find that it takes quite a long time for marketers to embrace the new possibilities offered by this technology:
- COLLECTING AND ANALYSING CUSTOMER BEHAVIOR DATA: Like most digital channels, it is now possible to record all customer interactions in an automated and affordable fashion (who open/read their email, how any times, when, what product do they look at, what links do they click on, email forward behavior,…). Tracking and analyzing customer behavior generate great insights and actionable knowledge. For instance, we found that online behavior is a very important predictor of off-line behavior. More details will come on this later on.
- OFFER PERSONNALIZATION: since the beginning of times, marketers have tried to create meaningful segmentations in order to, among other things, better promote to specific groups of customers. However, the marketing tools available at this time did not allow them to use their segmentations in a very practical manner. For instance, in the catalog business, it is hard to have more than two or three covers and the contact strategy is often resumed to “who should we mail the catalog to?”. With emails, it is now possible to create a personalized offer for every single consumer based on its profile and past behavior. AgilOne has developed such tools and can integrate easily to virtually any email marketing solutions (ExactTarget, ConstantContact, SilverPop, etc..). Again, more is to come on this shortly!
- INTENSIVE TESTING: The ability to track customer behavior and personalize promotions is all marketers need to test, test and test. While testing can be a heavy process in offline marketing, it is very easy now to send different offers, try various layouts or test a variery of touch frequency, etc..
AgilOne has developed an impressive expertise and set of capabilities in those areas. We will slowly share our little secrets in the weeks to come. Stay tuned!