January 2008 Archives

Jupiter Research issued a press release with some high level forecasts on the growth of Email marketing. They predict email marketing spending will grow from $1.2 billion in 2007 to $2.1 billion.

Interestingly, a point they highlight which is obvious to us is that spending on retention will outpace spending on acquistion.  David Daniels, Jupiter vice president and research director , emphasizes “... marketers will have to work harder to remain relevant in their communications with their intended audiences.”

It seems to us that the growth is coming from getting smarter about email. 

Welcome Emails Work

Sending a simple welcome email to your new customers is a great tool in your email marketing arsenal.  As many experts in the email marketing realm will point out, you don't get a second chance to make a first impression. If you wait until you get around to your monthly email blast, then your new customers may have forgotten all about you and consider your newsletter to be spam.

More importantly our direct experience with our clients shows that Welcome Mails can generate responses rom 2 times to 7 times higher than a typical email campaign (our response metric is revenue generated for each email sent). 

Our rationale for recommending welcome emails is rooted in direct mail. Historically the R in RFM (where R= recency, F = frequency and M = monetary or total value of purchases) typically predicts a response much better than the other variables.  Yet, there are more benefits such as brand building, spam complaint reduction and word of mouth.

The Big Boys Do Them

The Retail Welcome Email Benchmark Study from the Email Experience Council found that 72% of the major retailers surveyed were sending welcome emails in 2007. An increase from 66% in 2006, according to the study, shows that more retailers are recognizing the value of these critical emails.

Welcome emails increase sales, provide secondary benefits AND your competition is doing it. I think there is reason enough to get started. 

Get Started, Monitor and Improve

As is the case with all new programs, getting started is the hardest part (kinda like being a consistent blogger).   Here are some tips. 

First, make sure you set the tone, say thank you and say "Welcome - here's what you can expect from us - your new trusted merchant". Your email doesn’t have to feature just the newest or latest products, but best sellers that are always in stock.  An “evergreen” approach allows for automation and improvement vs. the constant challenge of creating new campaigns.

Here are some highlights on what is typically included from that same The Retail Welcome Email Benchmark Study:

• 32% of welcome emails include a discount, reward or incentive, down from 34% last year. That’s in line with the results of our subscription study, which saw a move away from incentives during sign-up.

• 62% of welcome emails asked the subscriber to whitelist them by adding an email address to their address book, up from 49% last year.

• 79% of retailers sent out HTML welcome emails, up from 69% last. The remainder sent text-only welcome emails. That said, most of the HTML welcome emails were HTML “lite,” making extensive use of HTML text.

• 53% of welcome emails included links to the retailer’s privacy policy, up from 45% last year.

• 75% of the welcome emails include the retailer’s brand name in their subject lines, on par with last year. Including branding here helps the subscriber recognize the email as one that they requested.

If you are looking for more ideas on what to put in your welcome mail, Bill McCloskey from Email Data Source also provides some insightful recommendations in an article at MediaPost.

To many it's not the content creation that's hard, it's the automation and triggering. Luckily, that's not a problem anymore. With tight integration and automatic updates between the store and the email marketing solution, the merchant need not worry about moving files, lists or anything of the sort. More importantly, triggers, which you find in just about every mid-level email marketing solution, make ongoing maintenance a non-issue.  On an ongoing basis the email solution sends out welcomes mails based on the updated customer data and criteria set up in the email marketing program. If this seems hard, drop me a line at ron [@] topright.com and I'll explain.

Segment for Success

At Top Right we've seen one size fit alls welcome emails outperform standard campaigns and we've seen them underperform.  What's we've never seen is a targeted, segmented welcome email underperform.  That is, once the welcome email programs are in place, the merchant starts to send welcome emails specific to product categories.  The relevance in those campaigns can drive responses nearly 15X what we've seen in regular campaigns.

The key point, however, is that you have to walk before you run. Get started and leverage this simple but powerful. Then improve it to FIND more sales and build better relationships. 

Relevance via segmentation

Stefan Pollard from EmailLabs has posted a great 5 tips article over at Clickz.  It starts with "One size does not fit all."  Of course we couldn't agree more... You can read the full article here http://www.clickz.com/showPage.html?page=3627972.

#2 on his list really stands out because it points out the interconnectedness of all forms of online marketing. Use the search engine optimization terms that drive the most traffic to your site.  That is, use converting keywords (a favorite term of my friend Rob Snell) to help form your customer segments.  It sounds simple enough but is really insightful.

Let's use an example of a baseball and softball bat store. The most popular keywords are going to be baseball, softball, bat, little league, fastpitch, glove, slowpitch, and so forth. The keyword list highlights the nearly natural segments that occur among the customers for the retailer. People who buy baseball are more interested in a baseball targeteed message than a softball message (and vice versa). Someone who recently bought a bat is more interested in hearing about accessories than the newest bat on the market.

We're lucky in that we are able to capture converting keyword data in the Top Right dashboard and leverage it to create segments.  What used to be disparate tactics (email are search) are now combined to a greater effect.  We know what people are searching and in many cases those search terms form the foundation for natural customer segments.  It's simple but extremely powerful.