2003 L-Soft

Successful e-Mail Marketing Practices

eMarketing AssociationMay 20-21, 2003

Gabriela Linares

2003 L-Soft

Managing e-Mail Marketing

• Defining e-Mail Marketing Objectives • Determining Communication Strategies• Reaching your Target Audience• Designing e-Mail Creative • Evaluating Results • Selecting a Solution• Final Recommendations

2003 L-Soft

Defining e-Mail Marketing Objectives

2003 L-Soft

Common Objectives

• Acquire new leads/ registrants/ customers/ clients• Drive immediate sales• Enhance customer retention programs• Build stronger relationships with existing

customers/clients• Provide company or product information• Increase revenues by up-selling to existing

customers/clients• Post-order targeted e-mails• Build brand awareness• As part of an integrated marketing strategy• Increase web site traffic

2003 L-Soft

Response Rates by Campaign Objective

15.30%

15.20%

17.10%

7.90%

5.60%

6.80%

Leads

Sales

Awareness

ConversionCTR

Source: IMT Strategies, September 2001

2003 L-Soft

Acquisition versus retention

Acquisition Retention

Search engine positioning 94% 6%

Banner ads 91% 9%

Referral/viral programs 85% 15%

Affiliate programs/ sponsorships 75% 25%

Incentive programs 51% 49%

E-Mail Marketing 37% 63%

Source: DMA- April, 2002

2003 L-Soft

Sales Conversion Costs

Acquisition Retention

E-mail $57.10 $2.50

Direct Mail $25.00 $60.00

Banner ads $140.00 N/A

Source: IMT Strategies, September 2001

2003 L-Soft

Determining Communication Strategies

2003 L-Soft

Popular e-Mail models

• Discount sales promotions • Sales transaction confirmations• Account statements • Scheduled corporate newsletters• Press release list• News alerts from Media outlets • Time-based reminders• E-mail discussion groups/ communities• Product announcements• Entertainment (humor, film clips)• Online education courses • Product user/support groups • Auto-responders

2003 L-Soft

Average CTR for B2C and B2B e-mail newsletters

3.40%

2.80%

1.90%

0.90%

0.50%

0.30%

0% 2% 4%

2000

2001

2002

B2CB2B

Source: Opt-in News, May 2002

2003 L-Soft

• Specials/offers from online merchants• Specials/offers from local retailers or restaurants• Household tips/recipes/crafts• Humor• Travel• Entertainment• Weather• Local news• Tech/business news• Finance/stock information• Sports

Top Interests for Permission e-Mail Users in the US

2003 L-Soft

Top reasons why US Internet users respond to e-mail offers

• Know and trust brand• Relevant information• Friend has recommended• Price/coupon/reward• Timely• Compelling subject• Entertaining

2003 L-Soft

Viral Marketing: Types of messages that are forwarded

• Merchandise deals and promotions• Prize/coupon/reward• Social/political messages and petitions • Warnings and advisories • High level of relevance• Funny• Work related• Informative• Cool• New Technology

2003 L-Soft

How US internet users learn about new web sites

Source: IMT Strategies, Sept. 2001

19%

22%

48%

56%

59%

80%

0% 20% 40% 60% 80% 100%

Radio

Guess URL

Television

Viral Marketing

Link from other site

Search engines

2003 L-Soft

Reaching your Target Audience

2003 L-Soft

US Internet User Attitude towards e-Mail Volume, 2001

49%

3%

34%

15%

0% 20% 40% 60%

Just right

Somewhatmore

Too many

Cannothandle

Source: IMT Strategies, September 2001

2003 L-Soft

E-mail overload: Number of e-mail marketing e-mail sent in the US

939

796

674

549

430

289

0 500 1000

2006

2005

2004

2003

2002

2001

Source: Forrester Research, August 2001

2003 L-Soft

Response to permission e-mail versus unknown senders

52%

21%

15%

12%

1%

3%

6%

29%

49%

13%

0% 20% 40% 60%

Delete

Open but annoyed

Indifferent

Curious to read

Eager to read

Unknown senders Permission e-mail

2003 L-Soft

Opt-in, opt-out, double opt-in, spam: Preferred e-mail marketing

methods

64%

31%

4%

1%

Double Opt-I nOpt-inOpt-outSpam

Source: Opt-In News, May 2002

2003 L-Soft

Rates for US e-mail permission-based marketing campaigns

2.10%

7.80%

7.00%

17.80%

0% 5% 10% 15% 20%

Unsubscribe

Bounce

Netconversion

Click-through

Source: IMT Strategies, Sept. 2001

2003 L-Soft

Permission e-mail marketing vs. direct mail retention costs

Cost per thousand (CPM)

Click-Through Rates(CTR)

Conversion Rate

Cost per sale

E-mail to in-house list

$5 15% 3.7% $1

Direct Mail to in-house list

$761 N/A 3.9% $20

Source: Forrester Research, August 2001

2003 L-Soft

Building your permission-based lists

• Subscriber form on web site• Sponsor lists of sites with a similar demographic• Send to a friend button – viral marketing• Ask for permission to customer base• Maintain list hygiene• E-mail appending…

2003 L-Soft

Building Customer Intelligence

• Harness your Customer Database• Evaluate Customer Behavior• Effective personalization and targeting• Common Segmentation Factors:

o Purchase historyo Location/zip codeo Demographicso Lifestyle/hobbies/interestso Psychographics

2003 L-Soft

US Internet Users’ Level of Concern Regarding Online Privacy

71.30%

61.70%

23.10%

29.50%

5.50%

8.80%

2001

2000NotconcernedSomewhatconcernedExtremelyconcerned

Source: UCLA Center for Communication Policy, November 2001

2003 L-Soft

US Consumers’ Privacy concerns

69%

70%

75%

66% 68% 70% 72% 74% 76%

Hackers willsteal info

Transactionsnot secure

Sharing infowith third

parties

Source: Harris Interactive, February 2002

2003 L-Soft

US E-Mail users’ preferred e-mail marketing privacy and customer-

support practices

• Unsubscribe option in all e-mails• Explicit no-share-address policy• 48-hour e-mail support answers• Editable personal preferences page• Provide phone numbers in e-mail• Explicit privacy policy• Double opt-in confirmation• Unchecked default opt-in box• Third-party privacy seal in e-mail

2003 L-Soft

Most Important e-Mail Marketing trust-building factors among US users

• Secure sign-up form• Trustworthy reputation• Loyal customer• Well-known brand• Friend recommendation• Trusted site referral• Relevant offers

2003 L-Soft

Why customers would give personal info

• Guarantee that the information will not be misused• Eligibility to win a prize in a sweepstakes• Regular e-mail updates for products of their interest• Access to more or better content or information• Affinity points• Receive targeted ads they’re likely to be interested in

2003 L-Soft

E-mail Appending

24%

76%

EthicalNot ethical

Source: Opt-In News, May 2002

2003 L-Soft

Privacy & Regulations

• HIPPA covers health personal information• COPPA protects children• Gramm-Leach Bliley Act concerns financial information• FTC supports Corporate Privacy Policies• Federal spam regulation does not exist• State laws exists in 13 US states, including California,

Colorado, etc.• More information about spam regulations visit:

www.spamlaws.com

2003 L-Soft

Creating the Content

2003 L-Soft

E-Mail Message Content

• Subject Line – getting recipients to open mail is half the battle

• Creativity• Personality and dynamic content• Keep it short and use links to draw reader to your web

site• Keep it fresh – don’t re-use the same content• Relevance – the more you understand your customers,

the more targeted and relevant messages will be• Frequency• Test messages

2003 L-Soft

Email users’ preferred e-mail marketing personalization models

• Communication Control: Digests, Frequency• Self-select content• Name recognition• Personal events & reminders• Geographic relevance• Account History• Recognizing Lifestyle Preferences• Purchasing Behavior

2003 L-Soft

Preferred e-mail advertisement formats worldwide, Q1 2002

35%

62%

3%

HTMLTextRich Media

Source: Opt-IN News, May 2002

2003 L-Soft

Response rates per format

1.20%

7.40%

9.00%

18.50%

3.20%

7.70%

5.30%

15.60%

0.00%

5.00%

10.00%

15.00%

20.00%

Unsubscribe

Bounce

Conversion

Click-Through

HTMLText

Source: IMT Strategies, Sept. 2001

2003 L-Soft

Evaluating results

2003 L-Soft

How to measure the effectiveness of e-mail marketing campaigns

• Click-through rates o unique and sum of events & comparisons

• Unsubscribe rates• Open rates• Conversion rates (website tracking)• Click-stream analyses• E-mail pass along rates –viral marketing• Coupon codes• Anonymous tracking to respect privacy• Campaign Comparison Reporting

2003 L-Soft

Response time and cost per unit, e-mail vs. direct mail

• Be prepared to handle responses

E-Mail Direct Mail

Response Time 3 days 3-6 weeks

Cost per unit $0.25 $1.25

Source: DMA, Forrester Research, Gartner Group, 2002

2003 L-Soft

To Outsource or not to Outsource

2003 L-Soft

Maintain your server• Hardware/computer

network• Dedicated Internet

Connection• Software for e-mail

management and delivery• Best for large loads and

those with experience• More cost-effective/

economies of scale• Flexibility to create

campaigns on the fly

Outsource your list hosting• Reliability and experience• Redundant servers and

delivery capacity• Flexibility to maintain

company Internet presence• Ability to move from

hosting to in-house when ready

• More expensive• Rely on company’s

schedule

2003 L-Soft

Outsourced e-Mail Marketing Services

8%

28%

0%

2%

22%

68%

10%

8%

0% 20% 40% 60% 80%

Analysis

Delivery

Creative

Strategy

20012003

Source: Forrester Research, August 2001

2003 L-Soft

Evaluating Options

• Evaluate software product or hosting service before purchasing

• Determine if solution provides appropriate features• Decide what reporting features you need

o online real-time reporting, compatibility with other software you employ

• Differentiating levels of privacy tracking• Campaign manager to organize jobs• Integration with your database and other applications• Handle bounces

2003 L-Soft

Main Recommendations

• Integrate e-mail into your integrated marketing communication plan

• E-Mail marketing is best used for retention and other customer permission-based communications

• Offering sales promotions is the most successful strategy

• Consider double opt-in and build your permission-based lists

• Respect recipients’ privacy to earn their trust• Personalize messages to provide relevant information

which will increase response rates• Evaluate options and opt for time-tested solutions

2003 L-Soft

Questions?

5:45pm Consulting Session - Today

Gabriela LinaresL-Soft international, Inc.

www.lsoft.comInfo@lsoft.com301-731-0440800-399-5449