Guidelines for effective e-mail marketing

Last year, business users received more e-mail messages than phone calls, voice-mail messages, and in-person exchanges combined, according to Forrester Research.

As anyone who monitors the level of spam they receive knows, e-mail is being used increasingly for marketing. It's no wonder--when used effectively, e-mail is a faster, cheaper, and more interactive way to market than direct mail. Forrester estimates that spending on e-mail marketing will grow from US$1.3 billion in 2001 to US$6.8 billion in 2006. Jupiter Media Metrix projects even faster growth, from US$1 billion in 2001 to US$9.4 billion in 2006.

The sad paradox is that as e-mail marketing grows, its effectiveness diminishes. According to Forrester, North American online consumers are 47 percent less likely to read e-mail promotions today than they were in 2000, and 55 percent of those consumers say they delete most e-mail advertisements without reading them--up from 31 percent in 2000.

The declining effectiveness of e-mail marketing is a direct result of the huge annual increases in the volume of commercial e-mail. According to Jupiter, the average person received 1,486 marketing e-mail messages in 2001--up from 1,132 in 2000. By 2006, Jupiter forecasts the average person will receive 3,846 marketing messages.

A big part of the problem is spam, which comprises about 40 percent of the commercial e-mail messages people receive, according to Jupiter. But spam isn't the only problem. Even e-mail that's sent with the customer's permission can contribute to e-mail fatigue if it isn't managed properly.

E-mail can be a terrific marketing tool, but the growing deluge of unwanted commercial messages is eroding e-mail's effectiveness. At best, poorly conceived e-mail is likely to be ignored by customers. At worst, it can cause you to lose customers--and sales--altogether.

You can increase the odds that your e-mail marketing efforts will be successful by observing a few important guidelines:

1. Make sure customers know they are opting in.
Sometimes customers can't tell the difference between spam and permission-based mail because they don't remember opting in to a list. Don't bury the permission at the end of a long registration form and be careful about handling this as a default check-off item. Smart companies are beginning to send a second e-mail verifying the customer's interest before signing them up for regular transmission.

2. Use e-mail for retention, not acquisition.
Acquiring customers with rented e-mail lists is significantly more expensive than acquiring them through banner ads or direct mail, yet no more effective. In contrast, using e-mail for retaining customers is inexpensive--there are no printing, postage, or list rental costs, after all--and doing so represents an excellent way to foster customer awareness about new products or promotions. For instance, customers who rent or buy videos over the Internet may sign up to be notified about new releases. E-mail can then be used to build a relationship with these customers by increasing brand awareness and encouraging repeat buying.

3. Test messages thoroughly.
Testing is the single most important technique marketers can use to improve the effectiveness of e-mail. Compared with testing direct mail, testing e-mail messages on a representative sample of your circulation is inexpensive and quick. You can test the content, time of delivery, presentation, offers/coupons, or placement. What's more, due to the interactive nature of the technology, you can get test results much more quickly with e-mail than with direct mail.

4. Don't deliver e-mail too frequently.
Consumers generally don't want daily messages cluttering their in-box. High-frequency e-mail should be carefully reserved for time-sensitive information such as stock price alerts or airline fare changes. Nearly half of all consumers are willing to receive a weekly e-mail promotion from a company whose materials they elect to receive, whereas 39 percent would like a monthly e-mail, according to Forrester. The lesson? Give customers a choice about how frequently they want to receive e-mail--daily, weekly, monthly, or perhaps only when new information that conforms to their interests becomes available.

5. Work with the big ISPs to avoid being treated like spam.
Many times, big ISPs that screen their customers' mail can't tell the difference between legitimate acquisition e-mail and spam. On these occasions, marketing messages may be automatically routed to recipients' bulk mail folders where they are trashed unceremoniously. Work with the ISPs' staff to make sure your e-mail promos make it to your customers' in-boxes, not their trash bins.

E-mail will inevitably grow in importance as a marketing tool, but only for companies that deliver it when and how users want it.

What e-mail marketing best--or worst--practices have you observed? E-mail Adrian or TalkBack below.