Transcript E-mail – The Quiet Revolution Presented to The eMarketing Conference By Bill Nussey, CEO, Silverpop September 30, 2003

E-mail – The Quiet Revolution
Presented to The eMarketing Conference
By Bill Nussey, CEO, Silverpop
September 30, 2003
Agenda
 The Basics of E-mail Marketing
 Industry Trends and Issues
 The Future of E-mail Marketing
2
Why E-mail?
For most applications, E-Mail Marketing is more cost effective and more
measurable than any other form of online of offline marketing.
Customers prefer online communication
 eMarketer and Doubleclick found that 78% of customers preferred e-mail
when being contacted by their online vendor. Only 17% preferred postal
mail.
 META says 80% of business customers prefer e-mail over the phone and
75% think losing e-mail would be worse than losing their phones.
Costs are lower
 IMT found that e-mail is 10X more effective than direct mail in terms of
cost per conversion rate.
Execution is faster
 Create-test-send cycle in e-mail is 3-4 days as opposed to 3-4 weeks for
direct mail.
3
E-mail Marketing 101 – The Basics
 E-mail is the most measurable e-marketing tool available. Each step of the
e-mail life cycle can be measured and analyzed for every single recipient.
Internet
Delivery
Bounce
Open
Click Thru
Conversion
Viral
The delivery
engine
manages lists,
segmentation,
content,
preparation and
delivery to the
Internet
The Internet
delivers some
e-mails but
others are
returned
(Bounced) and
are processed
by the delivery
engine.
An open occurs
when a user
opens your
message in
their e-mail
program.
Hyperlinks
embedded in
an e-mail can
be clicked on
just like a web
page. Each
click is called a
click-through.
A conversion
occurs when
the recipient
takes action on
whatever your
e-mail was
requesting.
This is often a
purchase.
Viral e-mail
occurs when
messages are
forwarded by
your recipients
to their
colleagues or
friends.
4
E-mail Marketing 102 – Key Concepts
 Permission is not simply permission – there are three levels of opt-in
 Double opt-in
 Opt-in with confirmation
 Opt-in (with active consent)
 Relevancy and frequency
 E-mail Types
 Channels
 Deliverability – rendering and filtering
 Opt-out methods and handling
5
Getting Customers vs. Keeping Customers
 E-marketing is most often divided into two categories, Prospecting and
Relationship.
Prospecting


Often referred to as “Acquisition”
Prospecting is about identifying new
prospects and customers




Relationship


Best strategy is to put your information
where targeted buyers are likely to be
spending time
Poor prospecting causes missed
opportunities
Often referred to as “Retention”
Relationship e-marketing is about
building loyalty, repeat purchases,
cross-sells and increasing the life time
value (LTV) of customers

Search Engine Optimization (SEO) and
Ad Banners are best suited
Prospective e-marketing is often more
cost effective than offline marketing
Find out what customers like and make
sure they get it
Poor relationship e-marketing can
damage brands and drive away happy
customers



Websites and E-mail Marketing are best
suited to building relationships
Relationship e-marketing can be 5-20X
more cost effective than offline
6
Building Your List
 Wrong Question: How big can I get my list?
 Right Question: How can I find out what my recipients want to receive
from me so I can ensure they only receive messages that are relevant to
them?
 Capture e-mail address everywhere you can
 In the store; via snail mail; on the site
 Advice on using third party lists
 Never, ever accept a list – legit list owners do their own sending
 Cross promote with related vendors to their lists
 Be extremely careful of which list vendors you use – test them out
before committing to large buys
 Promotions and contests work – as long as they under done under your
brand
7
Why E-mail? (again)
 Head to head test of e-mail and direct marketing for new lead production
 ClickZ Case Study: E-mail vs. Direct in B2B
 Case study details:
 Forms Software company, B2B audience
 90,000 direct pieces; 93,000 e-mail addresses
 Results:
Total Cost
Cost per Response
Leads Generated
Cost per lead
E-mail
Direct
$35,837
$153,000
$10.31
$80.00
800
38
$44.80
$4,026.00
 The e-mail campaign resulted in a 890% better cost per lead than the
direct campaign.
 While these results are higher than normal, it is noteworthy that this
test was set up specifically to compare the two mediums.
Source: ClickZ: http://www.clickz.com/em_mkt/case_studies/article.php/1465331
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Industry Trends and Issues
9
Trend #1A: “False Positives” on the Rise
 The Spam epidemic has caused ISP’s to turn up Spam filters too high
 Legitimate, permission-based E-mail is often mislabeled as Spam
 This deliverability problem is called “False Positives” and it is the
biggest issue in e-mail today (August NY Times on Yahoo and FTC)
 17% of legitimate permission-based e-mail is not being delivered by
the major ISP’s (up from 15% last year) *
Types of Filters








Source: 1H03 Report from Assurance Systems
Content
Message volume
SMTP session volume
Group voting
Blacklists
Challenge & Response
Bounce handling
A message has to get
past all these to be
delivered
10
Trend #1B: Huge Forces Marshalling Against Spam
 People have had it with Spam – the battle against Spam is mounting

Legislation
 9 Federal bills pending
 38 State laws
 New California law

Technology
 Spam filters that really work
exist today – they just need
more time to become
mainstream and widely
available (e.g., Mailblocks)

E-mail Marketing Industry
 Legitimate senders are
working with ISPs and Spam
filter firms to make sure that
permission e-mail gets
delivered
 NAI, JAMSPAM, CRE, and EMR

Consumers are smarter than we
give them credit for
 They survived junk mail, they
can survive Spam
11
Trend #2: Shift from Prospecting to Relationships
 Response rates and ROI on acquisition e-mail marketing (lead
generation) are dropping
 Equifax and Choicepoint both missed quarters recently and blamed
their e-mail list divisions
 Consumers now delete most e-mails they did not ask for *
 E-mail to customers and opted-in prospects continues to work well
 Forrester says open rates of 40-50% are not uncommon – especially
for service oriented messages
Source: September 2003 Forrester Report
12
Trend #3: E-mail Budgets Are Increasing
 Budgets for e-mail marketing will continue to rise
 The ROI for customer communications can not be beat.
 E-mail is becoming a C-level issue – primarily due to risk mitigation.
13
The Future of E-mail Marketing
14
Best Practices for the Next Generation…

Relationship and retention e-mail marketing works – avoid lead generation
programs unless you are very sure of the list
 Hint: never, ever accept an actual list; real list providers do the sending for
you

Deliverability will remain an issue but its easy to solve
 The top e-mail service firms have ISP relationships and technology to
maximize delivery of permission e-mail
 Keep your lists clean; check your content; monitor delivery

Avoiding the legal pitfalls (note: Nussey is not a lawyer)
 Laws are aimed at unsolicited e-mail, not permission e-mail
 Stick with 100% opt-in lists – use only your own list if possible

E-mail effectiveness goes up with relevancy
 Test, target, send, analyze, refine
 Next generation technology enables dynamic content and individual triggers
– true E-mail CRM
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Will E-mail Marketing Survive?
 According to 2,327 marketers in-the-field who reported their data
in September 2003’s MarketingSherpa Email Metrics Survey, “e-mail
marketing is here to stay as a viable tactic. Despite spam overload,
despite false positive and filter fears, despite everything.”
 E-mail marketing spending continues to increase and its effectiveness
as a relationship tool continues to improve.
 As Winston Churchill said, “This is not the end. This is not even the
beginning of the end. It may, however, be the end of the beginning.”
 Bottom Line: E-mail is here to stay
16
Source: Jupiter Research and DoubleClick
16
Thank You
Contact Information
Bill Nussey, CEO
Silverpop
404-995-1719
[email protected]