Handle with care

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...

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.

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