E-mail can be a useful addition to the weaponry of marketing, but
it is a method that needs to be used with caution if it is not to
prove counter-productive or even land a business in court
The development of Internet-based trading has had a huge impact on
the channel and while most e-commerce tends to be carried out via
Web sites, e-mail is also proving to be a major e-commerce tool,
both within the channel and for resellers looking for new ways to
market to their customers.
According to AOL, of the estimated 30m e-mail messages sent every
day, up to a third are unsolicited commercial e-mail.
Marketing via e-mail is taking off, partly because of the poor
results experienced by advertisers through banner ads on Web sites.
E-mail is seen as a more direct approach.
Shaun Varga, managing director of Blood Partnership, which
specialises in on-line marketing mainly in the consumer market,
says one of the biggest differences between traditional direct mail
campaigns and e-mail marketing is that if the e-mail hits the spot
with the initial target audience, those people will forward it on
to a wide range of other people - widening out, for free, the scope
of the response to the initial marketing campaign. This viral
marketing only works, says Varga, if the e-mail campaign does one
of four things. It's got to be outrageous, funny, have something of
value attached, such as coupons for free cinema tickets or a new
shampoo, or it has to have a campaigning aspect.
"If you impress someone enough on-line, you're potentially only a
click or two away from reaching some or all of their own contacts
with a carbon copy of your message," claims Varga. "And even
better, those contacts are likely to take extra notice of it,
because it's come from someone they know personally. How brilliant
is that? Prospects turned into your own surrogate sales
force."
E-mail marketing has other advantages, points out Varga. It is fast
and it is interactive. But he believes the present state of e-mail
marketing is "absolutely dismal". Too often, he says, e-mail
marketing is seen as simple information delivery, carried out by
junior staff. He claims this approach is damaging the brands of
many companies and argues that careful planning and thought is
needed to achieve good results from e-mail marketing. This is
particularly true of B2B marketing of the kind likely to be carried
out between channel partners. "Here, more intelligence is needed,
because the motivations of the audience are different," comments
Varga. "Those sending out the e-mails needs to home in on things
that are more genuinely useful, rather than gratuitously
entertaining - though if they can manage both, that's no bad
thing."
Rapid growth
A recent survey carried out by US research
firm Forrester revealed that while phone calls are still
overwhelmingly the most usual way for customers to contact a
company, e-mail is set to grow rapidly - from 10 per cent last year
to almost 18 per cent by next year.
E-mail is also perceived as increasingly useful for pushing out
information to a customer base. London-based distributor Computers
Unlimited, which receives a quarter of all its orders
electronically via its Web site, uses e-mail as a key marketing and
product information tool for its resellers. "We send out at least
one reseller document via e-mail every week," says Charles Kennard,
CU's sales director. The e-mails contain information about new
products, price changes and special deals. "If it contains specific
technical information, it would go to the product specialists, but
if it's something like a price announcement, that would go to the
whole reseller base," explains Kennard.
CU claims its e-mail campaigns have helped drive traffic to its Web
site, where orders through its reseller zone have risen steadily
since the zone's launch last September. Kennard estimates that half
the time, resellers still tend to pick up the phone and call the CU
call centre if they have a pre-sales query, which accounts for four
out of five calls into the call centre. But increasingly, he says,
resellers are finding it quicker and easier to log into the Web
site to check on details. Despite CU's success in uniting e-mail
and Web-based sales and marketing, Kennard argues there is always
the need for personal contact to complement electronic
trading.
Synchronising channels
Julian Brewer, head of
e-commerce at The Woolwich, agrees. Speaking in May at the Internet
World 2001 conference, he pointed out that 63 per cent of on-line
users say they won't buy anything on the Web until there is more
human interaction. One of the big problems with on-line marketing,
says Brewer, is that it is far too easy to create and cheap to
deliver. "That sounds excellent, but it means little or no thought
is being applied to this area and how e-mail marketing will be
integrated with existing systems," he comments. "Customers expect
companies to synchronise all their channels." It is therefore vital
to ensure that any e-mail interaction with customers, whether they
are users or resellers, is fully integrated with existing customer
service and sales systems.
Traditional e-mail marketing, where basic company messages are sent
out to a wide customer base with no personalisation, usually has
very low response rates, he says. Too many companies are failing to
exploit the advantages of e-mail, which while not as personal as a
phone call, can still provide a useful personalised interaction
between company and customer or prospect. Brewer has a number of
tips for companies running e-mail marketing, one of which is to let
traditional media do the hard work at the front end, to drive
traffic to the Web site, while e-mail marketing should be
personalised and relevant to the query from the customer (see box).
Expanding existing communications methods can be a challenge,
acknowledges Brewer, but properly used, e-mail marketing can result
in improved response rates and a useful additional customer
channel.
The Institute of Directors (IoD) has used e-mail for a number of
years as a cost-effective way to improve its relationship with its
members, using specialist broadcast e-mail company Digital Impact.
Employing an e-mail marketing expert is a good idea to get round
some of the technical challenges, such as ISPs blocking campaigns
they see as spam. Expert e-mail market firms have close
relationships with ISPs and can get round this, and have sensor
technology to identify the optimum e-mail format for each
user.
Opt-in marketing
Jonathan Cummings, head of e-marketing
at the IoD, says the organisation, which is non-profit-making,
wanted a way to communicate with members but did not have a large
marketing budget. Its e-mail campaign is based on permission-based,
opt-in marketing, e-mailing only members who have specifically
given the IoD permission to do so. "We've found that the most
effective means of collecting e-mail addresses and 'interest'
information is to build a subscription management page into the Web
site, with clear signposting from key pages," explains Cummings.
"This page encourages the user to opt-in to receive e-mail
communications and also provides the opportunity to collect
information about which products or services a user is interested
in."
One of the major benefits of e-marketing is being able to create
personalised messages, but Cummings points out that this can create
problems if not managed well, because e-mails can easily be seen as
intrusive. "The IoD has chosen not to include new members or new
subscribers in e-mail campaigns for the initial three months," he
says. These members receive "welcome" and educational e-mails,
designed to raise awareness of the full portfolio of services. "But
only once new members have this information do we send more generic
communications."
The IoD is still testing out the most effective mix of
communications to see which is the best combination of media for
promoting particular products and services. Particularly important
is making it easy for members to get more information about a
product via the Web site, rather than flooding them with
information via e-mail. Users can use the IoD Web site to check
places on courses, conference and events.
But it is not just the technical aspects of e-mail marketing that
can create challenges. Some of the legal aspects of e-mail
marketing, particularly when companies buy customer lists for "cold
calling" campaigns, can also create problems. Stephen Groom, a
partner at London law firm Osborne Clarke and head of the firm's
advertising and media unit, warns that businesses need to be far
more aware of the laws covering e-mail marketing. He says many UK
businesses appear to think that if they are sending out e-mail
marketing messages to trading partners and prospects, rather than
to consumers, they don't have to worry about the Data Protection
Act. But this misunderstanding, although widespread, is a misplaced
belief, says Groom. "The same rules apply in B2B marketing as in
any other area. There are no exemptions for B2B marketing. Any use
of personal data is covered by the Data Protection Act."
This means that any firm holding any data, even a simple name and
address, has to check that they comply with the Data Protection Act
and must gain their contacts' consent before sending them marketing
material - including e-mails. The Direct Marketing Association runs
a voluntary scheme called the e-mail Preference Service (eMPS). For
an annual fee, businesses get their e-mail mailing lists cleaned up
against the DMA's central database of people who have said they
don't want to receive marketing material by e-mail. So far, few
people have registered with the DMA not to receive marketing
e-mails.
But this may change as e-mail marketing becomes more prevalent and
as European legislation comes into force. From January 2002, the
European Union's e-commerce directive makes a legal requirement
that any commercial e-mail must be immediately recognisable as a
marketing message. "The way this will apply is that in the subject
box, any marketing e-mail will have to clearly state that it is an
advertising or marketing message," says Groom. "This will make a
very big difference to e-mail marketing and again is an area that
is not yet fully appreciated in the outside world."
Groom recommends businesses ensure they comply with the existing
Data Protection Act and put in place a 'best practice' code to
cover their e-mail marketing strategy. That would include things
such as any existing corporate policy on privacy, plus a list of
all possible future uses of data - including cookies and the rental
or sale of information.