Win the E-mail Budget Battle

Good article that supports e-mail marketing, find out how to make it work:

Email generates the best ROI of all marketing channels. Find out how to get a piece of the pie and turn the cold, hard numbers into a success story.

Email marketing works. Studies from numerous sources support this. The Direct Marketing Association, for example, reports that email delivers an eye-popping ROI when compared to other media: $57.25 for every dollar spent on it in 2005, compared to $7.08 for every dollar spent on print catalogs, and $22.52 for every dollar spent on non-email internet marketing.

Done right, it does even better. Jupiter Research has found that engaging audiences in more relevant communications increases net profits by an average of 18 times more than broadcast mailing. And marketers back up the claims.

According to Internet Retailer, 50.6 percent of internet retailers report that 6 percent or more of their sales come from email marketing, while another 25 percent say the proportion is over 11 percent.

In addition, 45 percent of chief marketing officers say their best performing online advertising tactic is emailing an in-house list, according to the CMO Council in 2006.
Despite these statistics and success stories, email programs remain under-funded compared to other marketing tactics. The latest IAB/PWC report on digital marketing spending in 2006 put email at only 2 percent of overall budgets.

“Companies are reticent to spend the dollars in the email marketing areas for a few reasons,” says Mark Politi, VP, marketing and media relations for Planetwide Media. Those reasons include:

-Lack of knowledge of how to send out large email blasts legally and not be considered a spammer.
-Lack of an internal email database list to work with.
-Lack of an email rental source to target the correct demographic.
-Proper measurable metrics to prove ROI for the campaign. Unique custom landing pages that can measure visits, downloads, sign-ups and purchases.
-Work involved compared to other online advertising programs make an email campaign low on the totem pole.

But to generate the type of ROI mentioned above, it takes investments in back-end technology for such tasks as targeting, email experts to ensure compliance with legislation and ISP guidelines, and creative specialists to write stellar copy.
So if you can get more, you can make more. Here’s how to do it.

Know the facts

Armed with information, an email marketer can convince the budget keeper his channel is worthy of more dollars.

Of greatest significance, Forrester reports that email has reached almost universal penetration, with 97 percent of consumers using the channel. That’s 147 million people in the United States using email almost every day, eMarketer calculates.

And that usage includes interaction with marketers.

According to JupiterResearch, 90 percent of users will use email to engage in and determine the value of a relationship with a company. And Quris reports that 40 percent of email subscribers will go “out of their way” to patronize a company whose email programs they like.

Not only do consumers use email to make specific purchases (50 percent of shoppers, according to Return Path), 50 percent of them who open and read email marketing messages are likely to also purchase other items on impulse and to spend 138 percent more than those who don’t buy through email (Forrester).

Do your math

Citing general statistics will provide the framework, but it’s the calculations on your own projects that will complete the picture for your CMO.

Simms Jenkins, founder and principal, BrightWave Marketing and, provides the following guideline:

Establish upfront what your goals from an email marketing effort are, including revenue, page view, in-store traffic, conversions, retention, subscribers, et cetera.

Then, create a monthly scorecard. What good are your email metrics if they live alone on a spreadsheet? A monthly scorecard provides an opportunity for the email/interactive team to monitor the key email performance indicators in the context of company goals (email specific and non-email specific) and industry benchmarks. Since email campaigns are so fluid, these goals in your scorecard are best evaluated and revised as an ongoing exercise. If anything, it prevents surprises and ensures the email team knows the score at all times.

Make sure to benchmark against the industry. Benchmarking internal stats against comparable industry metrics can be both valuable and an exercise in futility. The key is context. You want to make sure you are in the same ballpark as your industry on specific metrics like deliverability and open rates, but you should not make drastic changes to campaigns based on one research report that touted Tuesday as the best day to send emails.

Finally, focus/budget/judge on end-game/ROI. Go beyond CT/Open. Too often email marketers obsess over open and clickthrough rates. However, who cares if your open rate was high but no sales were generated? Your email program’s ultimate goal is what matters. Many email teams can’t even define that. If you fall into that camp, do yourself a favor and call a meeting and set your big picture goals. Worth considering are revenue, page views, sales leads, conversions, in-store sales, email subscribes, PR, cross promotion; the list can go on. Make sure your list is concise and clear.

With this information, make sure you see open and clicks as a means to an end, the end being your overall campaign goals. Otherwise, you may be flying blind.
Note: Company Current/Desired States are purely examples.

Share the successes

The final step in the process is to turn the cold, hard numbers into a success story.
Here’s an example. Furniture retailer Chiasso relies on email to drive customers to its website and Chicago store. Facing issues with deliverability and problems with its email lists, Chiasso spent much-needed cash on Bronto Software. The investment paid off. Chiasso embarked on two email campaigns that increased its online sales to 55 percent of total company sales, up from 32 percent the year prior.

Bronto helped VP of eCommerce and Systems Jerry Bergquist segment his contacts according to location, so he could send a store-opening announcement to his “Chicago” contacts. However, he wisely chose to not exclude his “Not Chicago” segment from the store-opening festivities. Besides keeping non-Chicago contacts aware of the company’s growth, the message also included $10 off coupons for online purchases.

The discount offer to the “Not Chicago” segment generated impressive results: 32 percent open rates and 10 percent clickthrough rates. Not to be outdone, the “Chicago” segment received a 49 percent open rate and a clickthrough rate of nearly 22 percent, with the vast majority of clicks linking to a landing page that included directions to and information about the new retail store.
Metrics for opens and clickthroughs provided Bergquist with important measurements for campaign evaluation, and conversion tracking provided him with sound insight into success. Conversion tracking let Bergquist follow the dollars-and-cents results of his messages. Some Chiasso campaigns, such as its “Good Buy” [note the clever pun] Winter Clearance Sale or its Art Décor Sale grossed more than $13,000 and $14,000, respectively, in sales.

“At Chiasso, we’ve seen such impressive ROI from email marketing that we are always open to increasing our budget,” says Bergquist. “Email marketing software has proven to be a cost-effective method for growing our business.”

Published: July 03, 2007
By: Dawn Anfuso senior editor, iMedia Connection.

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