Email Best Practises Pay Off

By: Bruce Clay, April 2006

Email marketing remains a vital part of the online marketing mix, despite its ups and downs over the years and continued spam and phishing. Its business marketing success is due to its effectiveness in driving revenue, developing customer relationships and promoting your brand. Users find it an amazingly effective communication service. Now a marketing strategy in its mature phase, email marketing has established some effective best practises.

At the core of these best practises is permission-based email marketing, which continues to be the de facto standard for both acquisition and retention messages. Permission email requires prior affirmative consent as defined by the U.S. CAN-SPAM Act and the European Commission's Privacy and Electronic Communications Directive. Recently, eMarketer reported that email marketing best practises are not widely followed. Double opt-in is the preferred best practise because it requires a second action to activate the subscription. A confirmation message is sent requiring a reply for verification. This ensures that the email address was actually subscribed.

Other practises include single opt-in and opt-out. Single opt-in merely requires sending a web form or other web-based request. No confirmation or verification is required so users can be subscribed without their knowledge if someone else provides their email address. Opt-out requires the user to remove the check from a pre-checked box to avoid being subscribed. Many users don't notice this and are subscribed to lists without their knowledge.

Businesses Ignore Permission

In spite of best practises and prior consent laws, 39 percent of B2B and B2C marketers still use opt-out email marketing practises when gathering email addresses. This was revealed in a recent study conducted by Direct and Multichannel Merchant magazines.

The study found that 60 percent of B2C marketers and 26 percent of B2B marketers use non-recommended single opt-in strategies, while only 7 percent and 3 percent, respectively, use the best-practises double opt-in method.

We think that business buyers are more tolerant of single opt-in strategies. For one, the buyers need information from vendors. Additionally, buyers are quite accepting of any email address that might be valid.

This may or may not be true, but at any rate, an easy unsubscribe option should be provided upfront with subsequent action taken promptly to remove the recipient from the list.

A significant problem with an opt-out strategy is that most companies don't know how to properly handle opt-outs in order to make it a win-win for both recipients and senders. An industry study of retail email marketers found that only 12 percent of the companies surveyed provided customers with the option of changing their preferences before opting out. Not only that, few companies had an opt-out plan that allowed them to mine valuable information and leave a positive impression with opt-out recipients.

It is a mistake not to try to learn why your customers want to leave. Chances are that if you probe with appropriate questions, most recipients will give candid reasons for leaving your list. Some might even reconsider if you give them a good value proposition.

Retailers Don't Respond

Best practise is to send an email auto-response within 24 hours of receiving customer inquiries. This is normally followed by a subsequent message addressing the inquiry. A recent JupiterResearch report shows that 92 percent of retailers provide email customer support, but only 41 percent acknowledge receipt of the customer inquiry with an immediate auto-response message. What's worse, 39 percent take three days or longer to reply or fail to respond at all. While trends indicate a significant decrease in auto-acknowledgement responses, this can damage your customer loyalty and retention rates.

The Jupiter report ascribed this to (1) a continued rise in email volume and (2) a failure to invest in email technology capable of handling large volumes of email. The downside of this is that it often results in consumers contacting call centers by phone, which costs the retailer more money. Many think that the cost to add the auto-response capability is prohibitive. However, balanced against the long-term cost of customer loss through non-responsiveness, the cost is more than manageable.

Beware of Poor Email Practises

Industry research reports that almost half of the consumers surveyed said they would not conduct future business with companies exhibiting poor email practises (Merkle|Quris). Yet, this same study reports that over 57 percent of these consumers made purchases as the result of an email message.

This means that your email practises can make or break you, either encouraging a desired action or driving customers away. We suggest that you track customers over time, analysing the history of their open, click and purchase behaviour. Armed with that data, you can communicate with customers individually, addressing their needs with customised messages that prove you value their business. These retention messages will nurture the relationship, sowing the seeds for future acquisition messages.

Gone are the days when you could simply track response rates to individual campaigns. Web analytics enables today's marketers to leverage visitor segmentation data and conversion analysis results to more effectively target specific customers with future campaigns.

The Forrester Research report, Email Metrics Beyond Open and Clicks, states that basic email metrics do not tell the whole story. Open, click, and bounce rates measure the operational aspects of your email campaign, but not its impact on consumers or the campaign's business results. Comparing these metrics to industry norms can give you a false sense of confidence, diverting attention from your actual email marketing performance. Therefore, it is now paramount to measure customer engagement, track changes over time and anticipate future behavior.

Past Predicts Future

Conventional wisdom states that past behaviour predicts future intentions. This is also true in most marketing channels.

In the case of email marketing, you can segment and target customers based on key behavioural variables -- such as frequency of mailings, topical relevancy, content quality and privacy -- to maximise customer engagement depending on past behaviour. Bottom line: Email marketers must give the customer what s/he wants and expects – they are in the driver's seat.

Managing online customer relationships requires an understanding of the consumer's behavioural patterns, both for future marketing activity, and perhaps more importantly, to gather the seeds of consumer dissatisfaction. Missing those clues can lead to the loss of a customer, not just an unsubscribe caused by the wrong email message.

Leveraging Email ROI

The importance of following email best practises cannot be overstated. Your ability to do so will affect the return on investment (ROI) for your email campaigns. Email is a double-edged sword; people love it but they hate spam. So marketers need to ensure that their messages are wanted. You can only do that by getting to know your customers and sending them relevant messages. Four tips for leveraging your email ROI are:

• Use permission with double opt-in
• Send relevant messages
• Don't send too often or not often enough
• Test all aspects of messages to learn what works

Best Practises a Win-Win

As a final word, retailers and B2B marketers are reminded that if they ignore best practises, it is at their peril -- particularly when it comes to those involving permission, opt-in vs. opt-out and the courtesy of immediate auto-responders to customer inquiries.