Back in 1999, online-only marketer Bluefly.com sent its customers an e-mail message touting discounted pashmina fashions. Within three days, Bluefly had racked up $100,000 in sales of pashmina, recalls Alanna Richter, vice president of marketing at the New York-based company, which sells discounted designer apparel and home accessories. “That’s when we knew the power of e-mail. You couldn’t even anticipate how impactful it can be.”
At many companies, the power of e-mail is still unfolding. In the beginning, the medium’s lightning speed and nominal cost were its main attractions. Many catalogers and i.merchants embraced it as a last-minute call to action. Now, though, marketers are exploring the full potential of e-mail as part of an overall customer contact strategy. They’re finding that e-mail can drive sales to marketing channels other than the Internet and play a significant role in brand-building.
And that may be a better approach for the long run than that of the cataloger who says, “‘I bought too many of this product, now I’ve got to move them. Let’s take anyone on the list and just bombard them,’” suggests Bill Babcock, CEO of Babcock & Jenkins, a relationship marketing company in Beaverton, OR.
When contemplating an e-mail marketing strategy, “you need to measure everything you do against a bigger strategy,” Babcock says. Your tactical e-mails may boost short-term sales, but are they hurting your overall image?
If catalogers take the last-minute move-merchandise-quick approach too often, buyers may figure that yet another offer will be coming soon and hold out for an even better deal. That type of marketing strategy doesn’t help build your brand for the long term, says Scott Hornstein, senior partner of Ernan Roman Direct Marketing, a consulting firm in Douglas Manor, NY.
Building brand and sales
New York-based Coach, a purveyor of upscale leather goods, uses e-mail solely to promote the brand. “We take a much more integrated marketing approach, holistically looking to drive traffic to the stores as well as to the Website,” says Ron Offir, director of electronic marketing and e-commerce.
In its e-mail messages, Coach sends information about new products and fashion trends. Rather than adhering to a regular monthly or biweekly schedule, Coach sends e-mails whenever it has something pertinent to say. Currently the company averages one e-mail message a month.
“We’re leveraging the same creative that we’re using in our billboards and print advertising and store windows,” Offir adds. “What the customers see in one channel will relate to the same creative they see in other channels.” What’s more, the e-mails typically help sales in all channels — not just online.
For Bluefly, e-mail has proved to be far more effective at brand-building than traditional advertising, which has space constraints. The company’s brand image involves four concepts, Richter says: “deep discounts, tremendous selection, world-class service, and convenience. That’s a pretty involved message. To try to convey that in one magazine ad or a banner would be just impossible.”
But with e-mail, Richter says, Bluefly can educate consumers about the company and what it offers as well as keep them apprised of the most recent additions, best values, and most appropriate merchandise for them. For example, a Dec. 12 e-mail focusing on Bluefly’s best-selling holiday gifts included lists of the top 10 gifts for her and for him, with a product shot accompanying each list. But it also included links to specials on outerwear, evening dresses, and men’s shirts as well as several shop-by-price categories and editor’s picks. At the bottom, the e-mail referenced Bluefly’s “money-back guarantee,” “secure credit card transactions,” and “$5.95 flat rate shipping.” The company’s thorough approach is working, Richter adds, making e-mail “the single most continually profitable thing we do.”
Beyond building the brand image, e-mails designed by Pfaltzgraff Co. have boosted response to its print catalog 40%, says Howard Blumenthal, director of e-commerce for the York, PA-based tableware manufacturer/marketer. Two to four days before the catalog is scheduled to arrive at customers’ homes, Pfaltzgraff sends “sneak peak” e-mails that allow customers to view the catalog online. “We see huge surges in our phone and Web orders,” Blumenthal says. “It really encourages them to make a purchase.”
E-mail also can boost retail sales. In November, to promote a “mystery discount weekend” event at its stores, Pfaltzgraff included scratch-off cards in its print catalogs that customers could take to the store for a discount of up to 50%. To further promote the sale, the company sent an e-mail that allowed customers to shop with the mystery discount a day early. If they didn’t have a card from the catalog, they could obtain one from the store if they brought in a printout of the e-mail. Specific details were not available at press time, but “the weekend was one of our most successful events ever,” Blumenthal says, estimating that the e-mail boosted participation by as much as 25%. In addition, even if customers didn’t make it to the store, the e-mail encouraged them to take another look at the catalog they had received up to three weeks earlier. “It gave us a nice bump,” Blumenthal says.
As Pfaltzgraff’s use of e-mail illustrates, the medium can produce near-immediate results. The flip side to this immediacy is that response to e-mails typically falls off after three or four days. One way of lengthening the shelf life of e-mails may be to take a newsletter approach. DoubleClick, a digital marketing solutions company based in New York, has found that e-mails offering articles as well as product information can generate orders for more than 30 days after delivery.
Seton Identification Products, a Branford, CT-based cataloger of industrial signage and safety products, produces e-newsletters with articles on ergonomics, worker’s compensation, and the like. At the end of the articles, the company includes links to pertinent items on its Website, such as antifatigue mats, industrial footrests, and ergonomics posters. “Our objective is branding, building awareness of who Seton is and what we do,” says e-business manager Wendy Brewer, who notes that nearly half of the company’s active house file has opted in to receive the e-mails.
Besides the e-newsletters, Seton encourages orders through promotional e-mails sent approximately once a month and timed to coincide with catalog mailings. These e-mails might say, “Watch for your new Seton catalog — it should be hitting your desk in the next week” or “Check out the new padlock seals in the catalog you’ve just received.” Says Brewer, “We look at e-mail as another channel for our overall customer contact strategy. We try to make sure each piece supports the other pieces and none are done in isolation.”
Seton monitors open and click-through rates to determine which articles or products are most popular. Its average click-through conversion rate is about 4.8% — well above the 2.5% industry benchmark suggested by Costa Mesa, CA-based customer relationship company Experian. The e-mails have been effective in driving print catalog and online sales alike, Brewer says, noting that many customers still prefer to place orders by phone with catalog in hand. And by tracking key codes on e-mails, Seton knows that 80% of the time, customers order a product other than the one featured in the e-mail that spurred the sale. “It’s more of a branding effort. We trigger a thought in our customers of ‘Gee, we need something from Seton,’” Brewer says.
What’s the frequency?
While an integrated marketing approach definitely takes e-mail beyond the short term, some question whether the approach will lead to overkill. If one e-mail is good, will five be even better?
In a word, no. Babcock, for one, says that the proliferation of spam from companies outside the catalog industry has made it more important than ever for marketers to use e-mail judiciously. One prudent approach is to ask customers how often they want to receive e-mails and to respond accordingly.
Make sure that every e-mail has value, adds Ernan Roman’s Hornstein, or the cost may be more than that of lost opportunities. “If you’re getting people opting out, it’s a real expense,” he says.
Even if they don’t opt out, you’re probably not strengthening your brand by over-e-mailing. “You have to ensure that when customers see your logo, they’re identifying the right values. You don’t want them to see your logo and say, ‘You’re the people who annoy the heck out of me,’” Hornstein says.
Coach has taken the proactive approach of suppressing customers who have repeatedly neglected to open its e-mails. “We’re very careful not to over-e-mail people. We’re looking for clues that you might not be interested in hearing from us,” Offir says.
Redmond, WA-based Eddie Bauer routinely purges inactive names as well. It’s the same concept as not mailing your print catalog to inactive names on your house list, notes Bridgett Boudreau, e-commerce marketing manager for the cataloger/retailer of apparel and home goods. “It’s the idea of saving that circulation cost. It’s pennies, but the pennies add up.”
There’s also the cost of losing a customer, Hornstein says. “Going out with a blanket, mass e-mail blast is as destructive as saying, ‘I’m going to bless everyone on my list with an outbound call.’ It’s not right for everyone.”
Babcock agrees: “You may have just educated 10% of your customers not to open e-mail from you. That can be really expensive.”
Wilmette, IL-based Ann Meyer has written for the Chicago Tribune, among other publications.
This Is a Test
One of the beauties of e-mail is that you can test creative, offers, and frequencies so easily. During holiday 2001, marketers at Bluefly.com debated whether to use an e-mail promoting thousands of designer apparel and home items at different price points or an e-mail with a holiday poem. “It was the traditional design-vs.-marketing, art-vs.-science debate,” vice president of marketing Alanna Richter recalls. “In the direct mail world, a test of that nature would have been hugely costly. And once you sent it, you wouldn’t have time to send the other; you’d be done.” Testing the e-mails was no problem, however. Bluefly sent 10,000 of each version. One hour later, “we looked at click-through rates and dollars per e-mail sent,” Richter says. The result? “The poem was very cute, but it lost.” All told, Bluefly spent about $100 to test the e-mails and discover that it could reap $200,000 in incremental revenue by going with the traditional approach.
When gauging the success of your e-mail campaign, you may want to keep these benchmarks in mind:
90%-97%, house file names; 80%, rental lists (source: Experian)
2.5% of total delivery (Experian)
Cost of single e-mail, including creative and transmission:
$20,000-$30,000, with the cost of an e-newsletter ranging up to $50,000 (Babcock & Jenkins)
Average number of marketing e-mails sent per month: