Email Marketing: E-customers for keeps

Using email to drive customer retention is a big challenge for today's email marketers, but finding out what works and what doesn't, through testing and adapting, is the key, finds Kim Benjamin.

Here's a sobering thought for email marketers. According to a report published in July in The Times, the average number of email messages received per person in the UK each day is 32, with rates expected to grow by 84 per cent each year. Add to this the on-going issue of email deliverability, and direct marketers are having their work cut out for them when it comes to using email as a retention tool.

"When email marketing started, it was about acquisition and getting people to trust the online environment," says Garry Lee, client services director at eCRM specialists RedEye. "Now it's about producing dynamic, targeted content to get cut-through and marrying this to deliverability."

The good news for marketers is that it is possible to target email campaigns based on what consumers have been looking at on your website and where they have gone next, what they have bought before, how much they spent in the past, when they bought from you and previous campaigns they responded to. On top of this, advances in technology mean that most list servers can detect the email programme used by recipients, and then deliver the message in the most appropriate format, for example, containing images.

All of this means that email marketers have a mass of information to hand when it comes to retention campaigns. "There is too much information available online, so marketers have to choose carefully which details to include. You can have a database of a thousand people that you can target in a thousand ways. The key is testing," says Lee.

Relevance is also critical, presenting the consumer with a proposition that is unique to their experience. AA Car Insurance, for example, has partnered with RedEye to identify users who have received a quote online but have not purchased. The next day, the company sends all those who have given permission an individually targeted email, reminding them of the discount available if they buy online, details of their quote and a link back to the site so that they can retrieve their previous quote details.

The company found customers who received an email after asking for a quote were 78 per cent more likely to return to the website and buy.

However, other brands are struggling to get their segmentation right when it comes to email. "In an age of limitless personalisation, it becomes too complex to write to each customer in an individual way," says Ashley Bolser, managing director of direct marketing agency ABA. "Additionally, the low cost of transmission of an email campaign encourages a mentality to 'email because it is affordable', rather than because it is appropriate.

Mistakes in medium selection would never happen in other situations because it would be too expensive to make that decision."

The Direct Marketing Association's latest Email Benchmarketing Report concluded that clients who strive for more segmented campaigns will be faced with an increasing level of complexity and will need to have more comprehensive database marketing skills.

"Brands spend money on segmentation offline so why not invest on doing it online? It's very easy to send an 'individual' email and it's cost-effective and highly measurable. But it's a question of data - many brands have some, but not enough to do segmentation based on targeted content.

They also underestimate the amount of content they need," says Matthew Simons, client services director at Acxiom Digital.

Less is more

The time and frequency that emails are sent is also proving to be a huge challenge in the battle for retention. According to Dan Springer, chief executive of email marketing services provider Responsys, it's important to use open rates as well as unsubscribe levels to determine how often customers should be emailed.

"Ask your customers how frequently they want to hear from you - there must be a specific reason to contact them. For example, if someone has just made a purchase, it gives brands a huge opportunity to optimise the sale. And if they haven't yet received the goods, an email can be used to increase anticipation," he says.

Email is the largest driver of sales for fashion website Net-A-Porter, which found it was sending three types of emails to its customers: a generic email to its entire customer base, updates on particular designers to customers who had bought from them before or signed up for updates and product news to customers who had requested information on certain items.

"Over time, our most loyal customers were getting an ever-increasing amount of emails from us, and a single individual might get nine or 10 emails a week," says Martin Bartle, head of marketing at Net-A-Porter.

"We wanted to reduce that to one. It sounds fairly simple, but it is quite a challenge to make that a reality when there are hundreds of thousands of customers and hundreds of products being introduced each week."

Net-A-Porter decided to use Lyris ListManager to streamline its outbound email marketing. To speed up communications with its user base, the company uses the system to notify customers immediately when new products become available, giving them first call on must-have items.

"As a result, we have a fairly blanket uplift. The click-through rates have gone up after combining our email channels," says Bartle. "Lyris has also enabled us to tie emails to triggered events, for example, 'x-number of days after you've made a purchase you will receive this email' or 'three weeks after someone first registers, he or she gets that email'."

As well as using trigger-based emails, marketers are also tying in email retention campaigns with microsites to strengthen their relationship with existing customers. Mazda (see case study, above) used this for the launch of its Sakata range earlier this year.

"If someone has shown interest in something specific, there's little point in taking them to a home page as they will have to search all over again," says Mike Weston, managing director of email marketing provider Silverpop. "You want to give customers a seamless journey, so microsites and landing pages are becoming increasingly important to both email and search marketing."

At a time when inboxes are getting increasingly cluttered, customers now expect to get targeted, relevant content that engages them in a conversation with the brand. There's little doubt that the tools exist to help marketers increasingly segment their email databases, but the amount of data that can be relayed and tracked online means marketers are having to be more savvy about which information they use to target customers.

"It can be very dangerous to second guess what you think is going to appeal to customers," says Michelle Hocking, head of marketing at CheetahMail.

"The best advice is to test, test and test again."

With more and more companies realising that there is only a finite number of people online, the battle is on between brands to keep more of their customers.

Email marketers will have to be smarter and increasingly segmented when using the medium if they are to gain that all-important cut-through.

POWER POINTS

- Email marketers now have a wealth of information about their customers at their disposal

- The success of a customer retention campaign hinges on how much of, and how, this information is used

- The key to this is to test emails before rolling out a campaign to see what customers respond best to

CASE STUDY - MAZDA

Brief: To raise awareness of Mazda's new Sakata range and encourage prospects to request brochures, arrange test drives, visit dealerships and buy a car Target audience Prospects that are looking to buy a new car in time for the March registration period

Agency Syzygy

In March 2006, Mazda launched its Mazda 2, Mazda 3 and Mazda 6 special editions, known as the Mazda 'Sakata' range.

To drive sales and prompt prospects to come forward, email marketing was used as it had demonstrated its suitability previously in reaching a similar target audience.

The campaign was delivered to a database of opted-in prospects held by Mazda. These prospects had interacted with Mazda once or several times before, fitted a certain profile and had not been contacted too recently in connection with any other marketing campaign.

Mazda often combines bought-in lists with names from its own CRM database and at times also runs above-the-line campaigns concurrently with online to both reinforce brand awareness and generate leads. It found that product-focused microsites are the most effective means to encourage the completion of emailed calls to action. After exploring the microsite, which is linked to Mazda's home page, the user is invited to request a brochure or book a test drive to find out more about the range.

Mazda wanted to convey the attributes of sportiness, affordability and value of the range. The cars were portrayed as trainers in sports shoe boxes in a concurrent magazine ad campaign, with copy centred on the concept of 'running'. Mazda extended the 'running' theme online through its email campaign and microsite by adopting the language and visual style usually associated with trainers and trainer websites.

Of those recipients who received the campaign email, 39 per cent opened it, with 46 per cent of them going on to click through to the microsite.

The email campaign had a return of almost six times profit against the budget spent.

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