Email Marketing: What You Need to Know
An increasing number of companies are turning to email as an alternative to traditional direct mail marketing, recognizing the power of this medium as a low-cost, high-value communication channel. This trend is a natural outcome of the proliferation of email itself. Ten years ago few people had email addresses; today, few do not. Most people have integrated email into their personal and professional lives. Studies show that many people check their email both day and night, thanks to the proliferation of mobile devices. In AOL's most recent "email addiction" survey, 59% of people emailing from portable devices admitted to using them in bed, in their pajamas! 
With this kind of penetration into peoples' lives, email is an excellent tool for establishing and maintaining customer relationships. Success in business is all about creating customer loyalty and driving repeat business. The value of customer loyalty is too compelling to ignore, since acquiring a new customer is much more expensive than selling to an existing customer. Customer loyalty is a function of trust, and that trust is best established through ongoing, consistent communication.
"Communication" includes any contact with customers or potential customers, so it could include newsletters, coupons or Web sites. The chief advantage of email marketing is that it's less expensive to produce and deliver, in terms of time, money and resources. It reaches more people, and is the least expensive form of communication, right behind telemarketing. When done well, consumers respond positively; 67% of U.S. consumers say they like companies that did a good job with permission-based email marketing, 58% open such emails, and 53% say these emails affect their buying decisions. 
Communications is something that has both "push" and "pull" components. Push communications channels (like direct mail) actively reach out to a target audience, while pull communications channels (like a Web site) deliver information when the audience is motivated to look for it. Email can integrate the two channels, by letting you reach out with a quick note and attract customers to your Web site. That means you don't have to wait and hope that they can find your site on their own. Another benefit of email marketing is that it levels the playing field: there's no significant economy of scale, so big companies have no cost advantage. Doing email marketing well requires knowledge and skill, but it's affordable for anyone.
The benefits of email marketing make it a very attractive proposition for almost any business. It's inexpensive, versatile and adaptable to many kinds of products and services. It can be used for general communications, to alert customers to new products or special events and to spread the word about special offers or promotions. Most consumers respond positively to email communication, especially from companies with whom they have an established relationship. That means it's one of the best vehicles for building a base of loyal customers - the kind of loyalty that will generate repeat business.
Selecting Your Targets
The Internet experience has a lot to do with personalization, and it's important to determine subscriber preferences. The most successful email marketers are very good at matching past purchase behavior to future promotional messages. Email marketing lists can also be segmented based on Web site behavior, such as links clicked or actions taken. Segmenting the audience provides insights into sales performance and buying trends based on customer demographics.
There are many email marketing tools and vendors, suitable for anything from very small to very large campaigns. Email marketing service providers can automate many routine tasks, such as tracking delivery, dealing with un-subscribes, and measuring open and click-through rates. (The open rate tells you how many people are reading the mail and the click-through shows how many actually take an action, based on what they've read.) Email marketing tools and templates can let non-technical people create messages that comply with the HTML standards of the World Wide Web Consortium (W3C), and that is something that can help deliver a consistent experience across different clients and platforms. Finally, most email marketing providers have the necessary process controls in place to ensure compliance with anti-spam legislation.
Email delivers market penetration that's much better than newspaper ads, direct mail or outbound telemarketing. Email's reach is even more impressive, when you consider its relatively lower cost.
Delivering the Message
It's not all good news, though, since getting your message through to the target audience is becoming more of a challenge. Both Internet Service Providers and individual customers have grown more aggressive about blocking spam, and legitimate marketing communications are always at risk of being caught in the same nets.
Spam is a threat to the effectiveness of email marketing, both because of volume effects (which lead people to delete mail without reading it) and because of various spam countermeasures. ISPs try to limit the amount of unsolicited email entering their systems, and may inadvertently block legitimate traffic. Legitimate marketers generally require a double opt-in process, so that commercial mail is never sent unsolicited. Despite the spam challenge, though, email is still an excellent communications medium. A well-crafted message, with a compelling Subject Line, will be opened by a large share of the people to whom it's sent.
In the end, it comes down to "deliverability." The content of the message was once considered the most important factor in deliverability, but that has become less so in recent years. Today, deliverability is understood to be primarily related to the reputation of the sender. The sender is whatever appears in the FROM field of the message itself. The message might actually be sent by a service provider, but how the target reacts to the name in the FROM field is the key.
Email Marketing Success Factors
Building trust is the most important feature in an effective marketing program. Without trust, recipients are less likely to open or act on your emails, and are more likely to unsubscribe or file spam complaints. To build trust, ask only for the most necessary information at registration, and use a double opt-in system. This kind of system requires the subscriber to respond to a confirmation message, in order to ensure the subscription request was valid. Make sure your lists are good; unsolicited, incorrect, out-of-date or duplicated addresses affect both a campaign's performance and your company's reputation.
The timing of email delivery is important. Wednesday is the most popular day for opening emails, followed by Tuesday. There's an ongoing debate about whether plain text messages are more or less likely to succeed than HTML messages. There's data to support both schools of thought, and customers should be offered a choice. Some ISPs will block images, which can diminish the impact of an HTML email.
A simple rule is to communicate often, but not so often that your messages are annoying. On-line consumers are impatient, so use short paragraphs, and keep it simple. Always provide an opportunity for interaction, so the communication can be two-way; provide a link that will take the reader someplace where an action can be taken.
Use the right level of authentication technologies. ISPs have a variety of techniques for separating spammers from recognized senders, and you need to understand and comply with them. Make it easy for readers to perform administrative tasks (such as unsubscribe, change profile and contact). Also, be sure your messages are W3C HTML-compliant; if not, they risk being blocked, particularly at MSN and Hotmail.
Design your message with the Inbox in mind. An attention grabbing subject line is a must, and the fewer characters the better. HTML emails are handled differently in different email programs (AOL, EarthLink, Hotmail and Yahoo!), so be sure to test your message in multiple clients to spot bad links and identify copy that triggers spam filters. Follow good, user-friendly design principles. Don't frustrate your readers or they may decide to report you as a spammer, even if they have opted in.
Email marketing is most successful when used in conjunction with other marketing channels. It will deliver a higher ROI when it's integrated with direct mail, telemarketing, trade shows, Web advertising and other marketing elements. Email communication shouldn't be expected to stand alone, and should be promoted on the Web, in print and in any other customer-facing material. Your Web site "landing page" is another important factor in encouraging customers to begin a relationship. If you manage to draw a customer to your site with email, make sure you do not confuse them when they get there. Just as with your email, your Web site should deliver crisp and clear communication.
Recognize the potential, but don't underestimate the effort. Companies may start email marketing because it's cheaper than direct mail, but it's a complex activity. An email marketing program needs an adequate budget, as well as the right resources and know-how.
Finally, be sure to understand the law - there are privacy and spam prevention laws in 36 states, at the Federal level and in most foreign countries.
 eMarketer.com (2005)
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