Can Email Work as a Customer Acquisition Channel?
A lot of savvy email marketers ask the question of whether email can work as an acquisition channel. Because the power of email marketing is based on permission (which can’t be transferred), the assumption is that email can’t be used to acquire new customers.

In reality, email can be a tremendously powerful customer acquisition channel when it’s handled right. I am, of course, biased, since ividence is an ad exchange for acquisition email. Still the numbers bear me out.

Acquisition Email by The Numbers
The DMA found that the average return on investment for every $1 spent on email was $40.56 in 2011. That number far outstrips other marketing channels. Though that number is an average that includes retention email, it gives a good idea of the potential that email has as an acquisition channel.

Additionally, click through rates on email beat out those for display. The average CTR for online display ads is 0.09%.

Email by contrast has an average CTR of 5.2% according to Epsilon’s most recent data. Acquisition email CTRs are lower on average (because there’s not an established relationship with the recipient). Still, ividence’s average CTR for acquisition email is 1.5%, or more than 16 times the CTR on display.

Facebook ads have an even lower CTR than display—0.051%—or 30 times lower than the acquisition email CTRs that we see.

And last, but not least, eMarketer’s 2011 figures show online ad spending up by 23% YOY, which an anticipated growth rate of 23.3% for 2012. That means more advertising dollars available for trying new, efficient channels.

So if email can work as a customer acquisition channel if done well, how do you do it well?

Getting Acquisition Email Right
Because the inbox is a very personal space, email marketers must work very hard to respect consumers in that space. That’s never truer than when you’re introducing a brand to a consumer via email. For acquisition email to work for all parties (the brand, the consumer, and the list owner), there are three concepts that must be followed:

1. Respect subscribers
Email marketing derives much of its power from permission and trust. When a consumer subscribes to an email list, there’s an implied expectation that the list owner respect that trust. For acquisition email to be effective, it needs:

 • Permission – Just as retention campaigns should only be sent to opt-in subscribers, acquisition email campaigns should only be sent to subscribers who have given the list owner permission to send third-party offers. There also needs to be an option for the recipient to unsubscribe from advertiser’s offers or to unsubscribe from the list all together.

• Clarity – Only the list owner has permission to send emails to their list, so their brand name (or the name of the list) should be in the mailfrom and mailfrom friendly fields. This makes it easy for the subscriber to understand why they’re receiving the email, reducing spam complaints and increasing open rates.

2. Ban “batch and blast” from your vocabulary
To be welcome, emails need to be relevant to the recipient. Send too many emails that a subscriber doesn’t relate to, and they’ll become an unsubscriber (or worse, will report your email as spam).

Any acquisition emails needed to be carefully targeted to the recipients most likely to be interested. Behavioral targeting is among the most effective segmentation techniques, driving higher open, click through, and conversion rates.

However, if the publisher you are working with can’t offer behavioral targeting, you should at least narrow by demographics or geographic data. Alternatively, you could send different offers to different targets: a clothing retailer could segment by gender or an insurance company could include different package options to people at different income levels.

3. Continually optimize
Just as importantly, don’t send to the entire (targeted) list at once. If you send in smaller waves, you can use the information gathered at each stage to optimize your target. If you’re testing two different creatives or subject lines, you can also pause the losing treatment once you have enough data to select a winner and get a better response from the full campaign.
 

An example of how this played out for a real brand is a bank client that we worked with at ividence. Our client was looking to drive acquisition of new real estate loan prospects.

In addition to the typical challenges that all brands face with deliverability and following legal requirements, financial institutions are very sensitive to concerns about phishing and fraud as well as the unique regulation around the banking industry. In a study by David Daniels of The Relevancy Group, 41% of banks and credit unions surveyed said they were somewhat to very challenged in overcoming fears of phishing and fraud.

Using the above approach of respecting subscribers, targeting smaller email sends, and continually optimizing the campaign, we were able help them drive new leads. The ividence team and platform monitored and adjusted the targeting of the campaign after its launch, which resulted in an over 1800% increase in the number of leads generated by the campaign between its first and last month. There was a simultaneous 233% increase in effectiveness (ratio of leads generated to emails sent).

Unsubscribe rates for the campaign were in line with those of retention campaigns in finance, and abuse complaints were below the average seen in retention campaigns (below 0.01%).

Have you used acquisition email to grow your business or to generate revenue from your email list? What tips would you add to this list?

Eric Didier, ividence

When do fewer emails mean higher ROI? When your emails are hyper-targeted and truly one-to-one. That doesn’t mean you need a huge team of people contacting customers one at a time, like the telemarketers of old.  It only requires you to tap into existing technology and know-how to make it happen.

I like to say “happy birthdays mean happy profits” because birthday emails are a perfect example of this concept. When someone subscribes to get your emails, you get their birth date along with the other data you gathered about them upon signup. That date goes into your system and on or near the customer’s birthday, depending on how you have it configured; an email is automatically triggered offering a birthday bonus of some kind, like a free ice cream cone if you work for a chain of sweet shops, or a free movie rental if you’re marketing your video stores.

These emails get a remarkably high response rate because they are so targeted…and therefore, welcome.

You’re not limited to birthday emails, however, nor are triggered emails only appropriate for B2C marketing. Triggered emails come in three types—recurring, transactional and threshold—and can be used in a variety of circumstances:

• A recurring email can be a birthday email like we’ve described above, or could happen a certain period after a purchase, to remind a customer that it’s time to renew
  
• A transactional email can be one email, like a follow up to a purchase or download, soliciting feedback, or even a drip campaign following a purchase, giving tips on how to use the product (and also up-selling)
  
• As a threshold email can occur when a customer’s behavior has gotten to a certain point, say if they’ve purchased three songs from one album, you offer a discount on the album

In the past, marketers resisted moving from batch-and-blast to this kind of targeted, triggered approach because the cost seemed prohibitive. Between building the API and the software to handle the emails the technological cost made any chance of an ROI a slim one. Today, however, all top-tier ESPs and many secondary ones offer triggered messaging capabilities. That means you can make your email marketing program even more relevant without increasing your staff or IT costs.

Before we dive into the benefits and how-to’s of triggered emails, let’s review the terminology:

• Triggered means triggered by an event: A trigger based message is one sent out in response to a certain action within an email or on a website
  
• Targeted means segmented, with dynamic content, so different recipients get different email content and even colors and graphics
• Drip marketing is a series of messages triggered by an event, such as a purchase or whitepaper download (also known as lifecycle messaging)

You’ll also need to define the event or events that trigger the website. The event might be a click on a website, time spent on a page with no shopping cart activity, a coupon download, or a link clicked in an email. Or, to return to our earlier example, it might be date driven like a birthday or anniversary.

One-to-one triggered emails have a much higher ROI so even though you’re sending out fewer emails, you’re making more money off the targeted ones. But what do you need to do to be set up for that kind of triggered email?

1.    An ESP or in-house solution that enables triggered messaging

2.    An API to automate the flow of data from your CRM or in-house database to your ESP or internal ESP

3.    A content library, so your system can take from it to place the appropriate message in each email

Also consider that these types of emails typically use a transactional delivery engine vs. a marketing delivery engine, i.e. point-to-point transmission vs. one-to-many broadcast.

The one caveat happens when you start to collect the data upon which to define your rules. Do not ask for too much. You can ask for up to four pieces of information upon sign up, but any more than that, and your abandonment rate will soar. Instead, be very clear what information you want to start out with and only ask for that (based on what you can really use). Then over time you can ask for more information, and append that information to that subscriber later.

The idea of this kind of targeted email marketing might be daunting, but it’s really not difficult given today’s technology and pre-existing services. As a result, your triggered email messaging can be as sophisticated as you want to make it, to get the most ROI from your highest value customers. For example, your system can score a customer based on behavior, such as purchasing a higher-priced item, and offer an exclusive and limited price on another item as a reward.

Marketers have to start automating their email campaigns based on customer behaviors, such as shopping cart abandonment. Companies who’ve done this have experienced higher click through rates and conversion rates, without increasing staff costs. Alternatively, automating email programs around customer behaviors with hyper-targeted messages will result in a higher email marketing ROI.

And it leads to a higher engagement index, which means more of your subscribers are engaging with your email, which in turn will give you a better standing in the eyes of the ISPs…which in turn will improve your email deliverability and get you into more inboxes…and so on and so on and so on.

Sounds pretty happy to me!


- Marco Marini
CEO
ClickMail Marketing

So we are deep in a recession economy, marketing budgets and headcounts are being cut, yet we are seeing an increase in requests for the outsourcing of email production and campaigns. Why is this?

Well let's take a little time to explore the variables in play here.  As marketers turn to more cost effective channels, email is becoming more popular than ever – according to a recent Forrester study the number of marketing messages for the average email user is predicted to double by 2014.  This makes the email channel even more competitive and crowded, causing a dilution of open, click and conversion rates.

The only way to genuinely attract attention and boost performance is to send more relevant and personalized mails.  To experienced email marketers this will not be news, and it is common wisdom nowadays to absolutely progress beyond broadcast (or blast) mailing tactics to attain any kind of click thru and conversion response.

There are a number of campaign types that increase relevance beyond broadcast, such as 'life cycle', 'clickstream' and 'targeted'. JupiterResearch states that these types of campaigns are up to 18 times more profitable than broadcast.  Each of these types leverage known intelligence about the recipient, whether based on a user triggered event, online behavior, or persona driven.  BUT in order to actually create a highly relevant campaign, each mail needs to be customized to each identified audience segment and ideally personalized for each recipient - both of which increase the number of steps and effort in the overall process of producing a campaign from start to finish. 

You have a choice here: do you create individual email templates for each audience segment, or minimize the number of actual email templates and leverage conditional email content for a more dynamic 'data driven' approach.  More email templates means more production effort to create, optimize and test each and every template – whereas the data driven approach needs more advanced skills/technology to design and test more complex templates. 

Are we at a tipping point?  Has the amount of extra effort, technology and skills required to execute more advanced email campaigns pushed email campaign production to a point where outsourcing makes more strategic and tactical sense?  Perhaps.  Organizations need to be competitive and need to consider ways to execute these types of campaigns.  The tremendous ROI (as stated by Jupiter) more than outweighs the additional operating cost, so each and every marketing department who takes the email channel seriously will need to formulate a strategy here.

With headcounts diminishing, outsourcing is an obvious path forward.  Having a tried and tested production team getting your mails out of the door in good time, with great quality (...under SLA), allows you to not only benefit from advanced campaign performance, but to focus your time on higher value marketing initiatives!

- Andy McCartney, Vice President of Strategic & Account Services, Premiere Global Services

Andy runs a team of email marketing gurus and specialists who help clients of all shapes and sizes with their emarketing initiatives.  Advice and service engagements are delivered in areas such as strategy, campaign production, list health and deliverability.  Andy has over 20 years of experience in marketing and services with hi-tech companies, including 10 years in business intelligence and analytics and 12 years in interactive marketing leadership roles.

Are you happy with the structure and performance of your email program? If you wish you could just blow it up and start over, we dare you—no, we Double Dog Dare you—to consider this challenge from Loren McDonald, vice president of industry relations for Silverpop:

Start your email program over from scratch. Shut the door, turn off your phone, IM and Twitter, and get out a plain, old-fashioned sheet of paper or clean off the office whiteboard. Ask yourself these questions: What would I do differently if I could start our email program over? What am I doing purely out of habit or because everybody else is doing it? What do I wish I could do but I can't because I don't have the budget or backing from management?

As you stare at the blank page or whiteboard, ask yourself these questions:

● List growth: Are we focused on quantity rather than quality? Are we using questionable acquisition methods just to hit some arbitrary list-size targets? Are we still using pre-checked boxes and single opt-in because my boss couldn't care less about spam complaints, list hygiene and delivery rates?
● List churn and inactivity: Do we understand how active our database is? From one-third to three-quarters of our list is likely inactive; so, what are we doing to reactivate those subscribers that have tuned us out? What programs do we have to deliver greater value to our loyal customers? What can we do to minimize unsubscribes, spam complaints and bounces?
● Design and format: Are our image-heavy emails with lots of administrative information located above the fold still the right approach? Is it time to start from scratch and have an email-design professional create a template that renders well on mobile devices and in preview panes with blocked images? Should we redesign our masthead and navigation links to better correspond with the actions our subscribers want to take?
● Welcome program: Is it time to chuck the text-only confirmation email for a well-designed, multi-message welcome email program?
● Message types: We've been sending the same basic emails for the last two years—our "Weekly Specials" email and monthly "Close Outs." Should we blow this up and let subscribers select different categories and frequencies? Can we add a slew of new email types—birthday specials, reminders, surveys, refer-a-friend promotions, geographic-targeted messages, educational or tip-oriented emails, etc.? Can we wrestle the transactional emails away from IT and design them to cross-sell and up-sell?
● Batch-and-blast: Is it time to stop whining, "How can I move to a lifecycle-, behavior- or trigger-based approach when it's all I can do to get the weekly batch-and-blast emails out the door?" Could I swap one or two batch-and-blast emails a month so I can start testing some more targeted approaches?
● Metrics: Are we tracking the right performance metrics? Our open and click-through rates are doing well, but my boss doesn't seem to care and wonders why we spend so much time on email marketing. Is it time for me to tackle proving the contribution of email to lifetime customer value, cost savings and direct ROI?
● Incentives: Have we gotten hooked on incentives —free shipping and 10% off? Should we test some targeted emails sent only to people that clicked on specific links and use no or reduced incentives to see if we can improve our margins?
● Preference centers: Our unsubscribe page is so ugly and doesn't offer any alternatives. Can I get some design and Web resources to create a worldclass unsubscribe/preference page? Speaking of preference centers, can we continue without one?

If you take up this dare: Let us know by commenting below. Did you overhaul your email completely or just tweak it here and there? What's the first thing you would change about your program if you could? Finally: Which of these changes, if any, could you actually make in your present program? And if you have a Double Dog Dare for the eec community, let us know about that, too.

–>See more Double Dog Dares.

When consumers and business professionals worry about the economy, marketers find themselves squeezed. Such is the state of affairs these days as we head into the busy Q4/end of year/holiday season time.

Email can help if it's used effectively as part of a subscriber loyalty and relationship effort. Sending more of the same old batch-and-blast promotions will only flood the inbox, depress your deliverability, destroy your brand trust, and annoy good customers who are worried about their own bank accounts. Resist the urge to think of email as "free"—it's not free. It's cost-effective, certainly, but a mindset that characterizes the channel as free quickly leads to over-mailing. What you want is less email—but messages that are more effective because they are more relevant.

Who wants to be reminded to spend, spend, spend when we are worried about our financial health? Instead, take an active interest in helping your subscribers, and make sure your content and contact strategies are aligned with what the subscriber needs, not what you have to sell.

In a recession, your best buyers and loyal clients are even more important. When customers are easily distracted by lower prices or free add-ons at the competitor, it's even more important to make clear the benefits of staying with your brand. This does not mean offering more discounts, although that certainly can be an effective short-term strategy. Instead, expand your loyalty program and use email to provide both sizzle and steak. Replace just two of your generic, batch-and-blast messages this month with tailored messages around the benefits of sticking with your brand. Spend time on the subject lines and the copy (keep it brief) to make sure it resonates.

Then, deliver the benefits via email—a very efficient and effective way to connect. If you are ecommerce, add a Buying Guide or Gift Guide to the loyalty package. If you are B2B, invite your best customers to participate in online events and interactive networking—help them build their business and they will continue to support yours. Be sure to tap the next tier down of buyers and expand the reach of your program. Invite current members to bring a friend or colleague along, and reward them both.

Test these ideas with a control group this month. Segment a small portion of your file (maybe 5%) and send half as many promotional messages, but replace 25%-50% of them with relevant content, tips or interactive offers. See if revenue increases or decreases. Also watch deliverability, complaint rates and activity per subscriber. Let me know if you want help constructing the test and measuring results.

Use the results of all these ideas to make the case for stronger subscriber-centric approaches to email marketing. If email doesn't contribute more now, then we can't expect to remain at the center of the marketing mix, or budget.

—Stephanie Miller of Return Path

In a multichannel retail business, using email to drive traffic to brick-and-mortar stores can be an interesting task. Chief challenges include:
(1) Internally, online and retail departments are often not only separate but also competitive;
(2) Generally, retail-focused campaigns don't drive as many immediate web sales, causing email crack-cocaine withdrawal; and
(3) Actual store traffic and resulting sales can be difficult to track, yielding performance metrics that sound like this: "Wow! Tons more people came into the store that day!"

Despite the hurdles, as retailers experience at least anecdotally positive results and simultaneously improve their geo-targeting capabilities, they also grow more sophisticated in store-specific creative execution. While in-store discounts, coupons and incentives will always remain a favorite tactic, I've seen more brands experiment with two of my favorite C's: content and cachet.

Below, Pottery Barn Kids, Crate & Barrel and Williams-Sonoma serve up varying degrees of virtual and physical content with Pottery Barn Kids heavy on virtual, get-psyched pre-visit tips and Williams-Sonoma listing a truly impressive breadth of in-store cooking classes and demonstrations. (This is one of the rare cases in which the events seem to exist for reasons other than to justify an email blast.) I do appreciate that Crate & Barrel has contextualized their store events by giving them a name. How cute is "Crate Ideas"?

From: Pottery Barn Kids
Subject Line: In stores now: Everything you need to celebrate the holidays.
Date: Tuesday, Nov. 6, 2007

From: Crate & Barrel
Subject Line: Crate Ideas store events this weekend
Date: Thursday, Oct. 25, 2007

From: Williams-Sonoma
Subject Line: Join us for Culinary Demonstrations
Date: Tuesday, Oct. 23, 2007

Pottery Barn, PUMA Women and Ann Taylor play the cachet card, peppering their subject lines and designs with words like "exclusive," "most-valued," "private" and "after-hours" in the hopes that making subscribers feel special will also make them feel like getting into a car. (Did I mention "exclusive"? "Exclusive" is clearly the new "luxury.")

Pottery Barn upped the ante by offering wine, which has been proven to increase spending by 20% per glass. Just kidding. But probably not! SPG—spend per glass. Is that a new KPI?

From: Pottery Barn
Subject Line: You're invited to an exclusive wine and cheese event
Date: Monday, Oct. 29, 2007

From: PUMA Women
Subject Line: You're invited to our After Hours Party!
Date: Thursday, Oct. 11, 2007

From: Ann Taylor
Subject Line: Hurry! Private Sale Today, Only for You
Date: Thursday, Oct. 11, 2007

As ever,
Lisa Harmon

–>Read other Make it Pop! posts.