It's All About Relevancy

Excerpts from a recent interview with Dave Daniels (DM News 2006)

Some of the same issues that bedeviled e-mail marketing last year continue to haunt the medium today; phishing, spam, deliverability, list churn and declining open rates. E-mail service providers are collaborating with Internet service providers and e-mail marketers to ensure these issues are minimized or eradicated. The stakes are high and consumer patience is running low. Marketers realize that aside from search and Websites, e-mail is possibly the most effective online marketing tool to reach out to customers and prospects.

David Daniels, research director at David Daniels Jupiter Research, a New York consultancy, explains the key issues facing e-mail marketing today. He also offers best practices.

Email marketers are generally satisfied, but overwhelmed. The majority of e-mail marketers are tethered to the production process of getting their weekly mailings out and often do not have time or the resources to think strategically about how to improve their mailings. In fact, “knowing where to begin to optimize our mailings”~ was the top challenge that e-mail marketers cited recently in a Jupiter Research executive survey.

Deliverability is still a top concern, but increasingly the hot button issues are data integration, automating repeatable mailings and a desire to make e-mail a more central and strategic part of the overall marketing mix. Not that delivery is a simple issue to fix, but these items transcend technology and get to the heart of how a company organizes around e-mail.

The issues of integration and a more strategic approach are really being driven by the No. 1 hot-button issue, which is relevancy. Increasingly marketers are beginning to adopt the notion of targeted and relevant mailings over conventional spray-and-pray broadcast tactics.

Some of the advantages of e-mail marketing include usability. The usability of some applications is improving, the introduction of Web 2.0 Ajax and the like into e-mail applications is making it easier for marketers to get their job done in a more efficient manner. Additionally, the ability to associate Web traffic behavior with e-mail data is beginning to get easier. However, most marketers are still not taking advantage of more proven and sophisticated tactics, such as segmentation, targeting and testing.

What are email vendors doing to make life easier for retailers and marketers using email for customer acquisition, retention and reactivation purposes? The aforementioned usability improvements are helping, and many have made significant strides in the reporting and analytical portions of their applications.

However, this year many e-mail vendors have been doing work behind the scenes to make their platforms and applications more scalable. These product developments are long overdue, as many of these applications were designed eight to 10 years ago when the order of the day was simply broadcasting e-mail.

As marketers embrace the notion of relevant mailings, the elephant in the board room of some vendors are the underpinnings of their applications, for if all marketers embraced a one-to-some approach to their mailings, some applications would have a difficult time scaling with that level of complexity.

What are JupiterResearch’s predictions for spend on e-mail marketing this year and the next and also 2008 and 2009? Where does it stand in comparison to search marketing expenditures? E-mail marketing spending is still dwarfed by search marketing spending, but that doesn’t make it any less important- it actually means it is more cost efficient. E-mail spending will continue to grow, but not at the rapid pace that it was at a few years ago. In 2006 spending will reach $950 million dollars and grow to about $1.1 billion in 2010, representing just over a 4 percent CAGR.

Here are some tips for e-mail marketers. First figure out what an e-mail address is worth to your organization. Once you understand the value of your e-mail clients you can begin to make real decisions on how much money should be spent to manage list churn, acquisition and, of course, retention. Secondly, think of the customer behaviors that drive conversion and engagement and focus on them. Develop an engagement quotient that illustrates the health of your subscribers, which will also help in implementing behavior-oriented segmentation.

Stop mailing to non-responders. If someone hasn’t clicked on your links in six or eight months, try one more reactivation mailing, then get them off your list. Lastly, test, test, test — time of day, day of week, content, templates, segmentation. E-mail marketing lends itself to continuous improvement and the only way to continuously improve is to test.

Reach him at ddaniels@jupiterkagan.com