How to Use E-Mail in a Down Market
Historically, many e-mail marketers have gotten by with poor metrics and suboptimal business practices because e-mail marketing was seen as a cheap communication channel where it was easy to make a profit.
But in the current economic climate, every cost is under scrutiny. Are you simply looking at ways to lower costs or e-mail more people? That’s exactly the wrong thing to be doing. Now is the time to act like a sharp businessperson and consolidate your own standing in the process.
Focus on Real Business Metrics
Smart businesspeople focus on profit and loss (P&L) and return on investment (ROI), not just cost. Clearly demonstrate that e-mail marketing is central to the future success of the company by implementing a broadly agreed upon ROI model. This allows e-mail marketing to achieve its full potential by providing insight into the return the company gets on the money it invests in the channel.
Don’t make the mistake of defining the model too narrowly. It needs to capture the real costs and revenue impact of e-mail marketing, including the costs of losing customers who opt out of future mailings, and the business being labeled as a spammer due to inappropriate delivery practices. Similarly, the revenue calculation should include the halo effect of e-mail on other channels.
Sure, capturing the data for such a model requires some effort, such as the integration of purchase data with e-mail analytics. But the effort is well worth it to help the business understand and manage the full range of its marketing efforts.
Segment — Don’t Just Blast
It’s time to stop scattergun-style e-mails to every address you can find. It’s a waste of resources and a sure way to lose customers. Some customers want to receive frequent commercial e-mails, but others quickly come to regard them as spam and you as a spammer.
Segmentation is essential in differentiating between different customer types based on their engagement with your company. Recency, frequency and monetary value (RFM) analysis has long been a highly successful way to segment customers — and it’s ideally suited to e-mail marketing.
Segmenting customers according to how recently they’ve bought, how frequently they buy and how much they spend provides invaluable insight into which customers should be receiving what kind of offer, and how frequently. E-mail more frequently to the most engaged segment, knowing they’ll be happy to get the information and aren’t likely to opt out. You should e-mail less often but with higher discounts to less engaged customers. Reignite their engagement with your brand. Selective e-mailing reduces mailing costs while improving profits.
Talk the Right Talk
Finally, this down market is a perfect time to establish e-mail marketing as a key strategic player in your company. Boost C-level awareness of the role it can play in driving profits across channels. A full ROI analysis frames issues in the same language that senior executives speak, and will demonstrate that rather than cannibalizing the catalog channel, you’re improving the company’s bottom line. RFM analysis, on the other hand, helps communication with the traditional catalog marketing team, which likely already use RFM segmentation. This reinforces the notion that e-mail marketing deserves to be taken seriously by senior management.
Craig Kerr is the vice president of marketing at iPost. He has more than 20 years of strategic and hands-on experience in marketing and sales of software and services. iPost helps businesses in a wide range of industries maximize the value of their e-mail channel.
