Email Marketing Today: Growth in Spite of Social Media?

• by Dan Bailey

I recently listened to a pre-recorded webinar on the AMA site regarding email marketing trends in 2009 and projections going forward (http://www.marketingpower.com/ResourceLibrary/Pages/Webcasts/Email_Deliverability_2010_031110.aspx ). A sponsor of this webinar was www.EmailInstitute.com, who also makes available reports from the initial study. Below are my key takeaways from both media sources.

Far from dead, email continues to grow in cross-channel and integrated marketing mix roles. The study results driving this webinar also show that vertical customers show favoritism toward email marketing, as receiving permission-based emails from their provider generates more loyalty and positive feelings toward the purchased brand. Forester data projects consistent growth in email marketing spend over next 5 years; with retention email marketing spending at roughly 2.5 times that of acquisition email marketing (several drivers are considered for this trend, including “going green”). On the customer side, overall email marketing open rates (22%) and click-through rates (6%) remained stable in 2009 as compared to 2008, while email marketing volume overall (including automated) increased. For retailers, 2009 has seen growth in the marriage of loyalty programs and email marketing, as well as enhanced customer profiling via merging online and offline databases.

The study overall shows a 34% engagement rate for new customers via new email info (i.e., new customers engaging, responding to “welcome” emails). Likewise, email mktg volume greatly increases during December as a general rule, and simultaneously recipient open and click-through rates decrease slightly (although, interestingly, conversion rates increase – presumably mostly for holiday retailers).

Recent years have seen an increase in emails with graphics being blocked recipient-side (no surprise here) – hence emails with graphics are best served and measured (for open rates) via “preview panes,” where a customer previews the emails served via Web with images. The middle of the week, specifically Tuesday, has been most popular for email blasting. However, this increase in overall volume may cause other days to be better for actual recipient connections. Optimal timing is one of the biggest keys to email mktg success, and so is optimal segmentation including CRM strategies such as RFM (recency, frequency and monetary analysis and sub-segmentation). To reiterate the obvious, mktg success is achieved by reaching the right person at the right time with the right message.

Regarding social media, social media heavy users include not only younger generations, but the more affluent and educated as well. Email marketing works hand-in-hand with social media, as the heaviest users of one channel are simultaneously the heaviest users of the other channel. As one might expect, the most loyal email recipients are also most likely to act as “brand messengers,” virally spreading positive word about the brand to others. RSS feeds work well (and have good engagement) for customer loyalty programs.

B-to-B email mktg campaigns tend to be more successful than B-to-C, due to the abilities of B-to-B to do better customer targeting and profiling. Also, specific domains for email addresses achieve better results than the more generic (yahoo, hotmail, etc.). In terms of optimal emailing frequency overall, it is important to realize that frequency and relevancy go hand-in-hand, i.e., if emails are less relevant to the recipient then frequency should be reduced. A common frequency for email mktg is one to two times a week (but many of these represent retailers with time-sensitive special offers). But a company’s optimal email frequency should be determined via testing. A standard email opt-out rate is .04%. HTML emails (with graphics) achieve twice the click rates that text emails receive.

Here are some key measurements for email mktg:

• Volume
• Open rate
• Click rate
• Engagement
• Deliverability

For more specific application, in the market category “Business Products and Services General,” there has been a decrease in email open rates from 28.8% in Q4 2008 compared to 21.6% in Q4 2009, and a decrease in click rates over same time period from 7.8% to 4.3%. In market category “Business Publishing/Media General,” there has been a decrease in open rates from 18.7% to 16.9% in same time comparison, and click rates have decreased from 6.1% to 4.9%.

All of this aforementioned information points to the importance of relevancy of content and recipient profiling for email marketing. One good way to ensure relevancy and achieve greater engagement according to data above is to carry out email marketing with a customer loyalty program.

– Jake Aull, www.zenofbrand.com