Email Marketing: E-customers for keeps

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.