Email can be one of your business’s most powerful marketing tools, but you need to know the do’s and don’ts. By EMILY ROSS
By Emily Ross
In so many ways, email has revolutionised business, and in particular direct marketing. Online marketing guru and chief executive of US-based IQ Interactive, Tony Quin, calls email the “golden goose” because of the real-time relationships companies can have with their clients.
Quin’s company created an award-winning email video newsletter on behalf of cruise line client Royal Caribbean, which has been viewed by more than three million people. The newsletter gave customers a virtual experience of Royal Caribbean’s new ship. (Take a look at the campaign here).
The campaign won his firm a swag of awards including a 2007 HSMAI Adrian Award and a coveted Webby. Admittedly, this type of campaign has the equivalent budget of James Cameron’s Titantic, but this type of email gives a clear idea of the potential of email marketing to knock the socks off customers.
Through the email, people on Royal Caribbean’s entire database were able to virtually experience the new ship before it was built. Now there’s a benchmark in email marketing. The company’s regular newsletters are also highly interactive.
While major corporations with mammoth marketing budgets can afford such campaigns, where does that leave SMEs who want to develop great email marketing campaigns?
The good news is the basic cost of email marketing is dropping. Adding to that, new, affordable email marketing software is able to perform more complex, targeted mailouts and monitor website activity more effectively (for example, see which pages a customer visited after viewing the email from the business).
When email marketing firm returnity started out in Sydney seven years ago, there were literally two or three firms in the country doing email marketing. Now there are five main competitors and dozens of smaller businesses that market software and manage campaigns for Australian companies.
New technology breakthroughs have seen the cost of email marketing campaigns come down significantly and that trend is set to continue. According to returnity managing director Paula O’Connell, an email marketing campaign now costs an average of 3–5¢ per email. When returnity started out, the rates were typically 10¢ per email.
O’Connell estimates that an SME can set up its own system for as little as $500. There are programs such as FileMaker Pro (that has a 30-day free trial), List Builder, SmallBizMailer, CheetahMail and YesMail.
There is also the option of freeware from companies such as Business Catalyst and Adobe. Before choosing software, it is critical to test its usability, to ensure staff can manage it and see whether it is compatible with the company’s databases.
Unlike print, radio and television, where it takes big budgets to establish a brand, the key ingredients to a successful email marketing campaign is a healthy, active database, a great offer and a dash of creativity. It’s all about finding a genuinely good reason to be lobbing into your customers’ email box.
Marketing Angels director Michelle Gamble believes that many smaller companies underestimate how important email marketing is to their branding and positioning. A poorly thought out email campaign can show up “a lack of sophistication”, she says, “and dilute your company’s brand in seconds”.
Gamble cites Marketing Angels’ work with Queensland-based Pure Heaven, which sells organic aromatherapy products online and through a concept store in Stanthorpe, Queensland, as proof that SMEs can execute email campaigns successfully.
Pure Heaven uses a website program by Melbourne-based IASP. It cost $4000 to set up an email newsletter to VIP club members, plus an annual fee. According to Pure Heaven director Maria Heaven, the week after the newsletter is sent out with special offers, there is a 20% jump in activity on the website, and there are more online purchases and inquiries.
The peril for all businesses with email marketing is the danger of becoming greedy. It’s so cheap to send emails, why send one a month when you can send one every week?
There is a simple reason why less is more. One too many irrelevant emails and your company becomes a spammer, the customer opts out and the relationship is dead – and you will see declining opening rates and low click-throughs.
Byron Bay-based travel business TotalTravel.com.au uses email to send out a monthly newsletter to 230,000 potential customers. The travel company was established in 2002 and has 40 staff. Its website receives an average of 1.6 million visitors per month.
The newsletter has a high delivery rate of 97% and open rates for the newsletter are a healthy 40%, with click-throughs at 20%. (Across the industry, an open rate of 30% and a click-through rate of 7–10% is considered good.)
TotalTravel.com.au’s marketing manager Paul Fisher says that the database is increasing by 20,000 a month. “At every possible touchpoint, we encourage people to sign up for special offers,” he says. People who sign up and existing customers who update their contact information go into the running to win a holiday. The trick is to make it as simple as possible for customers to sign up.
The newsletter is typically delivered on a Tuesday, “when people are starting to arrive at work”, says Fisher. Mondays are a no-no (too many people take long weekends) and later in the week workers typically have less time to read their emails. The newsletters are never delivered in the wee hours (2–5am) as they are prime spammer hours.
TotalTravel only sends out its newsletter once a month unless there is a remarkable hot deal that customers need to be alerted to (or its risks annoying clients). “If you go to the well too often, it will dry up,” says Fisher.
Aware that TotalTravel needed to move beyond a “textbook” newsletter mailout, Fisher has chosen Epsilon Interactive, a digital firm with expertise in database management, to help TotalTravel with its email strategy. Epsilon sent out 26 billion messages on behalf of its clients (including Sensis and Fairfax) in the past 12 months. TotalTravel pays a monthly fee to Epsilon, depending on how many emails it sends out.
Outsourcing aspects of email marketing makes sense to Fisher, particularly if there are technical problems. Epsilon’s system can cope if something goes wrong midway through a large mailout. Previously if there were technical problems, the entire list needed to get the email again and Fisher knows customers hate that.
Fisher is looking for a more sophisticated, personalised approach to communicating with clients. He admits that the company has been “under-utilising” the potential of email marketing. Rather than sending out one big batch of newsletters, he is moving towards smaller groups of highly specific, targeted emails.
According to research published in B&T Weekly, personalisation can increase response rates by up to 64%. CRM software that can analyse and segment databases allows a company such as Accor to send specific emails to members of its Advantage Plus loyalty program who have not been staying in their hotels recently, offering them a string of geographically-specific deals based on their previous stays with the hotel group.
Such targeted campaigns generate up to 18 times more click-throughs than “vanilla” or blanket email campaigns, according to returnity’s O’Connell. It’s all about relevance.
There have been no major spam legislation changes in Australia since 2003. (A useful guide is available from the Australian Communications Authority). O’Connell does not forsee any dramatic changes to restrict email marketing in the short term.
Most businesses are still trying to understand what the rules are. O’Connell says: “Online is still in a massive education phase.”
As more companies ramp up their email campaigns, it is highly likely the public will become even more sensitive to content. Companies of all sizes must get over the fact that they can reach their customers so quickly and cheaply, and start thinking about how to have meaningful, relevant contact.
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Smart Company is a sister publication to The Mandarin, catering to Australia’s entrepreneurs, small and medium business owners and business managers.
