Mar 01, 2005 10:30 PM  By

The release of AOL 9.0, with its new personalized adaptive filters, and similar services from other Internet service providers (ISPs) has opened a new front of the spam wars. These filters are designed to learn from and adapt to the types of e-mail that each recipient considers to be spam. It has long been known that the more relevant the e-mail, the higher the likelihood a consumer will open and read it. These new filtering approaches reward relevant e-mail that consumers are likely to read and penalize e-mail that fails to address individual interests.

Spam has become a focus for every Internet user. Congress, a number of ISPs, and several trade associations have launched a major offensive against unsolicited commercial e-mail. The focus of this effort — the first front of the spam wars — is to identify and eliminate companies that are e-mailing without a prior business relationship or valid opt-in agreement.

While it is critical to the future viability of e-mail marketing to eliminate those that abuse the channel, legitimate marketers are being caught in the various efforts to eliminate spam, which are hurting deliverability and sales. Beyond supporting our associations and legislators, there is little most companies can do on this first front but watch and respond to the changing rules.

But the second front is being fought by the recipients of e-mail themselves. Now that they are armed with adaptive filters and other technology, consumers can easily block e-mails they consider spam.

To win the war on this front, your company has to tackle the challenge on its own. The battle of the second front is between you and your customers. The real value you bring to the relationship will determine whether they push the button and banish you forever or continue to be a highly valued customer.

To improve your relationship with your customers, you must begin and maintain a dialogue to learn what individual customers want and then react to meet these needs. This dialogue can take many forms. Customers “speak” to the companies with whom they have a relationship every time they click on an e-mail, visit a Website, buy a product, or call a contact center. Companies “reply” through e-mail content and offers, Website pages, print catalogs, and store layouts. With e-mail marketing, the key is to understand what types of campaigns customers want, the rules to use to make the campaigns individually relevant, and the appropriate response when customers act on your communication.

Mapping the campaign

To determine the optimal assortment of e-mail campaigns for your company, try mapping a fishbone” diagram every communication your company would like to send (see “Sample e-mail campaign strategy” on page 28 for an example). This chart should include all e-mail, print, and telemarketing events that your company plans to undertake, both “scheduled” communications, as seen on the top of the diagram, and “event based” communications, as seen on the bottom of the diagram.

The next step is to prioritize the communications. This leads to the final selection of the actual campaigns to be executed.

Each communication/campaign should then be assigned a very specific objective: sales, education, relationship-building, customer service, what-have-you. Once you’ve determined the objective for each campaign, you can assign the rules to each.

The rules of engagement

In the past, companies would create their product or service and then look for customers who would buy it. Today, to build a successful online relationship, companies should understand the needs of the individual customer before designing their product or service. Now more than ever, it is important for companies to understand the value they provide and to find ways to emphasize and improve it.

Developing the rules of your campaign will enable you to match the right products to each customer. Online marketers have tested hundreds of rules that have potential for e-mail applications. These rules have three common elements:

  • a method for segmenting customers (such as by brand, by subcategory, by product affinity, and by products purchased);
  • criteria for classifying customers (latest product purchased, average order value);
  • selecting the appropriate products (best-sellers, for instance, or new products).

Some examples of rules that might work for personalized e-mail:

Product affinity Include in your e-mail merchandise with the highest affinity to each customer’s most recently purchased SKU. Home products cataloger HSN Improvements increased its sales this way. Customers who purchased the Barbecue Fork, for instance, received offers for grill cleaner. On a variation of the theme, gifts merchant e-mails customers to remind them of loved ones’ birthdays and other special events. The e-mails also contain three gift recommendations: the exact gift they purchased last year from the company plus two comparably priced products.

Multicategory segmentation Send the best-selling products for each category from which a customer has purchased. A customer who has purchased shoes and handbags from you might benefit from an e-mail showing your company’s most popular accessories.

Replenishment Identify consumable products in your mix and send a reminder to customers who have purchased one or more of these items. This can work with a gamut of products, from ink cartridges to dog food. Office supplies cataloger/retailer Staples, for one, reminds customers to stock up on replenishable items they have previously purchased. With more than 7,000 replenishable SKUs, the company has plenty of opportunities to stay in touch with customers simply by helping them to avoid running out of key items.

Liquidation Identify products with excess inventory and send appropriate e-mails to customers who have purchased items with a high affinity to these products.

Winning them over

By implementing and following the rules, you can improve your sales while adding value to your customer relationships, which in turn will translate into customer loyalty.

Don’t overlook the fact that part of the value equation may come from the types of merchandise offered. Customers are telling you what interests them when they buy or click. You should use this information to include types of merchandise relevant to the individual customers when you communicate with them.

To that end, gifts marketer Collectibles Today sends offers to its customers based upon the specific artists and collections previously purchased. In effect it is following the product affinity rule. If you’re a Thomas Kinkade fan, for instance, you’d receive e-mails regarding his latest paintings, sculptures, and jewelry.

Similarly, for membership programs or continuity clubs, the value may be information. In this case, you could e-mail customers with news about the latest releases from their favorite artists or authors, update them on the points they’ve earned from past purchases, or simply notify them of upcoming merchandise shipments.

Coffee seller Gevalia, for example, has developed a multichannel approach to communicating with customers. The goal of the program is to educate customers about coffee — Gevalia coffee — so as to enhance their overall coffee-drinking experience, as well as to show them how to tailor their orders to meet their personal coffee needs. Personalized e-mails play a key role in this process, beginning with a welcome e-mail from Gevalia that thanks them for their initial order.

Legislation and technology eventually will combine to provide a workable solution to the widespread e-mail abuse problem. This is the top priority for all online marketers. In the meantime, you should start to address the second front of the spam wars. Your customers have the tools today to restrict access to their e-mail inboxes. Companies can no longer bully their way in; they now have to earn the right to enter.

Keith Wardell is CEO/president of Exmplar, a Fairfax, VA-based provider of e-mail and online marketing services.