Winning a Spot in the Inner Circle

Mar 26, 2006 10:18 PM  By

Consumers reach a natural threshold of 10-12 e-mail marketing relationships that they can hold at any one time. This phenomenon is what my colleagues and I call the Inner Circle: a select group of trusted companies from whom people are willing to keep receiving – and reading – e-mail.

The Inner Circle presents a unique and significant challenge for marketers trying to grow their lists. That’s because to enter the Inner Circle, a marketer usually must displace an existing relationship that a consumer has with another marketer in what is essentially a zero-sum game.

How can a marketer win a coveted spot within a consumer’s Inner Circle? Data from our 2005 View from the Inbox survey point to several key trends, strategies, and tactics.

E-mail address acquisition: Quality over quantity
Data from various sources suggest that though open rates are on a steady decline, clicks and related transactions are not – and these are the ultimate consumer behaviors targeted by marketers. Simply filling lists with low-quality addresses to pump up the volume increases the denominator, which lowers open rates. List size may provide clout within an organization for budget dollars, but it overlooks the value to the consumer that is reflected in metrics beyond opens, such as clicks and conversions. Lacking confidence over whether companies can sustain engagement with their lists, it seems easier just to keep “filling up the pipe” as people drop off.

But true success in the e-mail channel – and being welcomed into the elite Inner Circle – has less to do with open rates or list size than with focusing on the people who are engaged with this channel, because these are the people who click, read, and ultimately spend money on your products. In other words, value – not volume – is the key to mastering permission email marketing.

Popular acquisition sources: Relevant content is the key factor in motivation opt-in
According to the 2005 survey, people give their e-mail addresses to companies for a variety of reasons. More than three-quarters (78%) of respondents said that they provided their e-mail addresses to companies as part of registering an account with the company, to fulfill an online transaction, or to access online content. Close behind, 70% of respondents noted that they signed up to receive information from that company via e-mail.

Other common situations in which respondents signed up for permission e-mail programs:

  • Filling in an e-mail address on a business form such as a bill, a warranty, or raegistration (54%);
  • Signing up for a sweepstakes, a contest, or another “chance to win” from a Website (44%); and
  • Signing up for newsletters and updates after finding and visiting a company’s Website through a search engine (43%, which is an increase of 14% from 2004).

Integrating simple ways for potential customers to sign up for your permission e-mail program is the critical—and obvious—first step to building a responsive e-mail list. To retain e-mail customers, you must devise sound strategies to keep yjrm actively engaged. Consumers opt to receive e-mail messages for a reason, so it is critical that you identify these reasons and deliver on consumer expectations.

Ongoing tracking and measurement: The key to growing and maintaining your lists
Understanding and comparing the performance of e-mail addresses acquired from different sources, and tracking and measuring this performance over time to determine if the benefits of e-mail are sustained, are fundamental to successful list management programs.

In addition to assessing the actual performance of e-mail addresses, using historical data to forecast the potential of addresses to establish goals, facilitate budget decisions, and establish program priorities is vitally important to designing and maintaining these programs. Such analyses of the value of addresses acquired from different sources demonstrate the efficacy of various acquisition strategies and allow you to justify, refine, and prioritize e-mail address acquisition programs accordingly.

In other words, these programs help you develop “what if” scenarios for acquisition sources based on address quality, volume potential, and costs to forecast potential; establish goals up front; and track and fine-tune programs on an ongoing basis.

Consumers are becoming increasingly sophisticated and discerning about what they are willing to read and respond to from their inboxes. To win – and keep – a place in the consumer’s Inner Circle requires effectively attracting and properly engaging them with highly relevant content.

Katie Cole, Ph.D., vice president of research and analytics for Merkle|Quris, the e-mail marketing agency of Merkle, writes a monthly column for MULTICHANNEL MERCHANT. You can contact Cole at kcole@quris.com.