E-mail Marketing: What Works Now

The great American author John Updike once said, “Any activity becomes creative when the doer cares about doing it right, or doing it better.” The sentiment surely applies to e-mail marketing, and the operative words are “creative” and “better.”

Catalogers stand to benefit greatly from trying more creative e-mail marketing techniques. Even if you already consider yourself an expert in this space, upping the ante to a more sophisticated, more technical solution could be a smart move. Not only could you improve response rates, but you could also automate portions of the testing process when working in this online medium.

HTML vs. Text

The most basic upgrade for plain old e-mail messages uses Hypertext Markup Language (HTML), the native tongue of the World Wide Web. HTML allows creation of text-and-graphics pages that are far more attractive than plain text.

By and large the industry is moving toward HTML-coded e-mails as the standard. Effective catalog selling demands high-quality images, and the same goes for e-mail marketing. Plain text messages don’t always cut it.

Reggie Brady, vice president of strategy and partnerships for New York City-based e-mail marketing vendor FloNetwork, says two of her most prominent catalog clients—J. Crew and Omaha Steaks—prefer to send image-embedded messages.

“We know that, looking across e-commerce clients generally, [catalogers] will get three times the click-throughs [with HTML] than with text,” she explains. “That’s no surprise; a picture is worth a thousand words.”

Upgrading e-mail messages could help drive business to other channels. Kathryn Grant, a spokesperson for The Sharper Image, says some of her company’s e-mail incentives are intended to encourage those who have bought from the Web site to visit a retail location. Take the company’s Valentine’s Day incentive as an example (see screenshot on opposite page). HTML, or rich media, allows The Sharper Image to send an offer that would lose its punch in a text-only message as there would be no visual of the products nor a coupon. Customers receive the discount only if they print out the e-mail and take it to a store.

Whatever your reason for considering moving to this enhanced medium, you need to make it work for you. Below are a few factors for consideration.

Technically Challenging

Be prepared for extra back-end work with a more high-tech solution. FloNetwork (along with the majority of e-mail vendors today) uses a “sensing technology” that can determine who can receive these rich text messages. You must be sure your customers can look at the message you’re sending. Accidentally delivering a machine-freezing e-mail to a customer’s in-box is not the way to her heart.

Brady advises that initial e-mail contact contain only a small amount of HTML code to test the receiving ability of each customer. Some e-mail programs, such as Microsoft Outlook and Lotus Notes, both of which ostensibly accept HTML, often have difficulty displaying graphical information correctly.

With that said, implementing HTML has virtually no upfront costs and can drastically improve sales, as Ken Ellingsen can confirm. Ellingsen is president of Improvements, a catalog specializing in home furnishings and fixtures. A year and a half ago, his company looked to Fairfax, VA-based full service e-mail provider Shop2U to create better e-mails than the wimpy text messages it had been using.

Improvements has seen increased response with the mini e-mail catalogs that Shop2U prepares, which require little work on the cataloger’s part. Improvements merely uses its existing design expertise in a new medium.

Whether marketing in print or online, a good direct marketer always knows to segment the database based on customer behavior and to test the message and offer.

Traditionally, the more you segment, the higher the response rate—but the greater the work. Shop2U keeps the extra work to a minimum for Improvements with an automated e-mail generator. Customized templates are created on the fly with each purchase. This solution allows Improvements to base each new e-mail not just on the customer’s most recent purchase, but on the last four purchases.

Keith Wardell, CEO of Shop2U, stresses that you don’t have to abandon the traditional selling techniques you’ve spent years perfecting. Segmentation should not be an afterthought; it’s an integral part of effective direct marketing of any kind.

Improvements knows this well. Shop2U literally puts a piece of the Improvements catalog into individual e-mails in ways that are meaningful to each customer segment. It lays out and measures response to its e-mails using the same kind of product analysis as for the catalog.

It even has a follow-up message for online orders. Using automated Web technology, Improvements is now able to send “bounce back” catalogs full of products relevant to a customer’s purchase within 48 hours of making that purchase.

Most catalogers are sending the identical messages to all customers, but Brady says segmenting is crucial to improving response. “Since both J. Crew and Omaha [Steaks] have been at this a while, they don’t send the same message out to everyone,” Brady says. “They segment their customers.”

Compelling Content

Page layout, product placement, typography and similar issues all come into play when designing e-mails that look like a catalog. Copy that attracts one catalog’s customer base may hold no appeal for another; the same goes for photography and other visuals.

As always in direct marketing, good creative grabs attention but the offer matters most. Promotions and rebates, two direct marketing stand-bys, are also very popular with online customers. So are e-mail newsletters that have relevant content and a perceived value to the customer. The OmahaSteaks.com Web site, which gets around 250,000 hits per month, receives opt-in registrations from online shoppers for e-mails containing recipes and special offers. Brady says these customers also get advance notice of new products, and Omaha Steaks builds its e-mail housefile.

The Sharper Image offers free shipping, which Grant says is always hugely successful. Wardell suggests little bonuses, such as free gift wrap, to make e-mail customers feel special.

Subject Line

The subject line serves as your “envelope,” and it is rife with testing possibilities. Brady says a successful subject line clearly advertises a specific value to the consumer.

“In direct marketing, the most powerful four-letter word you can use is FREE,” says Brady.

But not every single direct marketing rule of thumb can survive the digital divide.

Some people say never use the word ‘free’ in a subject line,” she warns. The word is often used by spammers and many e-mail providers block messages containing “free” in the subject lines. Although the “spam” association could be offset by the brand shown in your “From” line, chances are the recipient won’t get to decide whether to open your e-mail because it won’t get there.

Wardell cautions against beating a dead subject line. “Eventually you answer your own question” about what works, he says. Don’t waste time tweaking.

Identify Goals

Do you want to boost click-throughs and sales, or are you trying to bolster your company’s brand image and develop a dialogue with customers? Wardell says the majority of his catalog customers have sales as the goal of every customer communication. Remember, e-mails can serve as a wonderful relationship-building tool. Wardell points out that the relevancy of each communication keeps customers interested. Even if they don’t buy, they remain loyal.

But by no means are you limited to one goal per e-mail. FloNetwork’s Brady says that every message should encourage more than one action.

Her rule of thumb is to place three distinct offers in every message. J. Crew may use the week’s lead product, say, a new line of pants for spring, as the meat of the e-mail. But in case that doesn’t entice customers to visit the Web site, the company offers an accessory that complements the main product and perhaps a winter clearance offer, too.

Identify Preferred Customers

Some catalogers’ idea of how online and off-line databases are related is still sketchy at best. But lots of companies are very aware of who their online buyers are and how they wish to be approached.

The Sharper Image’s Grant says her company treats names on e-mail lists differently from paper catalog customers by showing them new products first and offering them incentives others may never see.

Why are online customers so special? For one thing (and this one is close to a cataloger’s heart), fulfillment costs from Web purchases are much lower, says Grant.

It’s also much cheaper to send small-run messages to online customers. Wardell says e-mail customers are very responsive to messages flagging them that a consumable they purchased in the past is about to run out (say, a gas grill propane tank).

“Wherever consumers see value, there’s a very good response rate,” he says.

Making some offers Web-exclusive also comes into play when you need to move merchandise fast. FloNetwork’s Brady says Omaha Steaks has found a niche in e-mail marketing with promoting overstocks. She says it’s not uncommon for a cataloger to spend months figuring out the best strategy for unloading excess inventory. By utilizing its e-mail list, Omaha can now offer an immediate rebate on overstock products, a huge benefit to a cataloger specializing in perishable food items. Brady adds that this kind of rebate would never comprise the whole marketing message but would be one of three offers contained in the e-mail.

Crossing The Channel

Where do online customers come from? The Sharper Image gathers e-mail addresses from customers in its stores and online, says Grant. Wardell says his clients get e-mails by driving traffic to the Web site from the print catalog. He also suggests instructing phone reps to ask for e-mail addresses after taking orders. Even if a customer has never visited the Web site, she might appreciate receiving shipping information via e-mail. If she opts in, you can follow up by e-mailing her new offers.

Don’t forget to coordinate off-line and online communications. This is an area where one point of purchase can strengthen another. Marketing channels are only as rigidly defined as you want them to be. And don’t forget that your e-mail should relate to what you delivered to the customer’s front door. Shop2U does an annual plan and a more detailed quarterly plan with its clients, which is then matched to a company’s print catalog plan.

Wardell says Improvements likes to e-mail before the print catalog is sent to announce that it is about to drop. It also uses follow-up e-mails after the catalog arrives asking how they liked the special offers. It’s up to you to find what works, but scheduling is imperative, says Wardell.