Ask any multichannel merchant what its biggest e-mail marketing challenges are, and growing the e-mail file will certainly be one of the first topics mentioned.
So why do so many of them engage in practices that speed subscriber attrition?
A recent survey by e-mail deliverability firm Return Path found that 36.2% of consumers said they received more e-mail than they expected based on the information they were given at signup.
Nearly one in four — 24.1% — of consumers surveyed by Return Path said they received much more, but still a manageable amount of e-mail during the 2007 holiday shopping season. Another 13% said they received so much more, it was overwhelming.
At the same time, more than half of respondents, or 56.4%, said they receive a lot of “junk” from marketers, defined as “e-mail from companies I know but that is just not interesting to me.”
Also, an alarming percentage of consumers surveyed by Return Path, or 22.3%, said they handled the increase of e-mails by reporting the sender as a spammer to their ISPs.
A spam-complaint rate of half a percent or higher will result in serious deliverability troubles at the major e-mail inbox providers, such as Yahoo!, AOL and Microsoft.
As a result, managing people’s expectations is crucial when convincing them to hand over their e-mail addresses.
Ironically, many retailers are in a panic because their e-mail attrition rates are high, says Ben Ardito, vice president of professional services for e-mail service provider e-Dialog. But they’re high because of the retailers’ own actions.
“To them, e-mail is becoming more of a retention vehicle for their primary customers, but they don’t have e-mail addresses for everybody because they didn’t do a good job when they came in the door,” Ardito says.
Retailers are realizing that they need to nurture their lists because the volume of names that was coming in through early co-registration and affiliate marketing is dropping, he notes, “and the names aren’t as high quality as they have been in the past.”
But there are still a ton of opportunities to get people’s e-mail addresses.
For example, Ardito recommends asking in so-called transactional e-mails for permission from customers to begin sending them e-mail marketing messages.
Transactional e-mails, which include order confirmations, account statements, and product and service updates, get clicked on more often than other types of e-mail and, as a result, present a unique opportunity to open the channel for communication with customers.
There are rules governing the use of sales pitches in transactional e-mails, however, and marketers who over-sell in them run the risk of drawing the attention of the Federal Trade Commission. If an e-mail’s primary purpose is determined to be commercial, then it falls under the Can Spam Act and requires the sender to give the receiver an opt-out mechanism.
Return Path recommends no more than 20% of a transactional e-mail be devoted to a pitch. This is certainly enough room to ask the recipient to subscribe to other e-mail communications, though.
For example, Avis Budget Group has been able to enroll tens of thousands of people into its promotional e-mail newsletter by having its customer service call-center representatives ask if customers would like to receive an e-mail confirmation of their car rental reservation. The confirmation e-mail includes a pitch for renters to receive promotional e-mail messages.
While the transactional messages have achieved a not-surprising 87.1% open rate — they are, after all, car reservation confirmations — click-through rates on the promotional content within the e-mails have reportedly been an astounding 61.6%.
“The open rates were expected, since we’re sending transactional messages, but the click-through rates on promotional content have been surprisingly encouraging,” says Dawn Perry, director of CRM, Avis Budget Group.
E-dialog’s Ardito recommends advertising the benefits of signing up for an e-mail program everywhere possible, especially on the Website’s home page.
“I understand front-page Website real estate is precious, but customer retention is precious too, and you have a higher probability of getting someone to come back if you get their e-mail address,” he says.
Beyond asking for the address, one simple tactic for boosting e-mail subscription rates is to offer prospective subscribers a preview of what they’ll receive if they sign up, says Ardito.
“It’s very simple to add a link that says: ‘Click here for a sample,’” he says. “You could even do it so it’s last month’s e-mail. The ‘click here if you can’t see this’ hosted version can easily be used to put someone on the Website to see last month’s e-mail.”
He adds that merchants should be asking for e-mail addresses on every channel through which they communicate with customers and prospects. “I’m still waiting to see a TV commercial that says ‘come to our Website and sign up for our e-mails,’” he says.
E-mail appending works, Ardito notes, as long as it’s done intelligently. “When you receive the file [of appended names], don’t just put them into the promotional messaging stream,” he says.
“Treat them as a fresh opt-in with a welcome message, and within that message be clear on setting expectations for what they’ll be receiving, what kind of content, maybe what the frequency will be,” he says. “It’s about really making it a different experience from just throwing them into the promotional messaging stream and assuming they’ll know why they’re getting e-mail from you.”
The same philosophy holds true for e-mail names gathered through co-registration, says Ardito. “It’s all about being transparent,” he says. E-dialog also recommends different welcome messages based on how the addresses are gathered.
Stefan Pollard, director of e-mail best practices for e-mail service provider Lyris, says e-mail address gathering is simply a case of, “ask, ask, ask, and ask again, everywhere that somebody can potentially interact with your brand. Make it prominent, and make it clear what they’re opting into.”
It’s important to set up the e-mail program so people get something of value they wouldn’t otherwise get, Pollard adds. For example, electronic bookseller eReader.com offers two prices next to each title: a sale price and a discounted price for its newsletter subscribers.
Every e-mail newsletter eReader sends features list prices and discounted newsletter prices on the books it promotes.
“Everything they do is built around having those subscribers stay on the list,” Pollard says. “And it’s not complicated at all. And maybe you don’t want to hurt your margins by discounting everything you sell, so then put a valuable discount in the welcome e-mail.”
And if there’s a reader out there who hasn’t yet discerned that welcome e-mails to new subscribers are a necessity, they are. “It’s the most important thing you can do,” says Pollard, adding that the majority of marketers inexplicably still don’t.
“That’s your first opportunity to drive expectations and offer them something of value,” he adds.
Another way to keep people on a multichannel merchant’s e-mail list is by offering them exclusive promotions, such as letting e-mail subscribers take advantage of sale pricing one day before everybody else, says Pollard.
One area where most marketers fail in their e-mail file-building efforts, according to Pollard, is by not including a clear reason to opt-in to their programs on every landing page from all marketing activities.
“If you’re using search marketing and have a dedicated landing page, make sure you’re asking them to sign up,” he says. Like Ardito, Pollard is an advocate for asking for e-mail addresses inside transactional messaging.
“You know, provide a little plug for them to get e-mail-only discounts and special offers,” he says.
He also says too many companies fail to ask for e-mail addresses offline. “We just got through a heavy business season, and how many companies took the time in the package that was sent to a friend or relative to include promotional information allowing them to opt-in to get the catalog or newsletter?” he asks rhetorically.
Another area where multichannel merchants fail in e-mail marketing is thinking that once they’ve received permission to e-mail someone, they have permission to mail for all time.
“A lot of marketers think that permission is permanent; it’s not,” says Pollard. Because recipients can hit the “report spam” button and cause delivery troubles for the sender, it’s imperative to monitor e-mail list activity for those who stop interacting with the merchant’s communications.
But inactive addresses also offer opportunities many marketers fail to take advantage of. Pollard recommends using positively worded promotions to reactivate them. “Don’t say, ‘You haven’t opened our newsletter in a year,’ say, ‘You’ve been a subscriber to our e-mail newsletter for a year. Happy birthday. Here’s a coupon for 25% off,’” he says. “Now if they respond, they’re back in the active file.”
Moreover, they’re far less likely to report the merchant as a spammer. Another reason it is important to monitor inactive addresses is that a significant percentage of them will be those of people who no longer use the address and have moved on without telling the merchant.
ISPs turn abandoned addresses into spam traps. Hit enough of them and delivery troubles will result, so it’s important to clean abandoned addresses off an e-mail file.
What constitutes enough inactivity to warrant removal from an e-mail file will vary from merchant to merchant, depending on how often they mail and the length of their sales cycles.
No discussion of general e-mail list building tactics is complete without addressing opt-in practices.
Permission-based e-mail address-gathering practices generally fall into two groups that go by various names, single opt-in and double opt-in being the two names that we’ll use here.
Single opt-in is where the prospect signs up for an e-mail program and the merchant sends a welcome e-mail confirming the subscription, but the subscriber does not have to respond in order to start receiving e-mails.
Under so-called double opt-in — some call it fully verified opt-in — the subscriber must respond to the welcome/confirmation e-mail in order to begin receiving messages.
Many marketers argue that double opt-in is like asking the subscriber for permission twice. And a high percentage of subscribers will not respond to confirmation e-mails, making the e-mail list-building process more arduous.
Anti-spam activists will argue that the only way to ensure the person really wants to receive e-mails is to get confirmation. Forged e-mail subscriptions are not uncommon.
Double opt-in is also a foolproof way to make sure new e-mail names are clean and the risk of spam complaints from them is low.
“I’m not a real big fan of double opt-in for any purpose other than data validation,” says Pollard. “If you have store clerks entering information and call centers taking e-mail addresses, you want to use double opt-in to make sure there are no data entry problems. Double opt-in will protect you from having typos on your list.”