Just as companies began waking up to the potential of digital campaigns, Canada’s Anti-Spam Legislation (CASL), which came into force in July, turned e-mail marketing back into a four-letter word. Facing a requirement to gain explicit consent before dropping into customers’ inboxes, some will forgo e-mail communication in favour of less troublesome electronic channels.
That could be an expensive mistake. E-mail remains the most cost-efficient way to build relationships with your client base. According to the U.S. Direct Marketing Association, the average return on investment for an e-mail campaign is $40 for every $1 invested—roughly twice as high as search or display advertising. And e-mail is nearly 40 times more successful at acquiring customers than Facebook and Twitter combined, according to a recent study by McKinsey & Company. “The rate at which e-mails prompt purchases is not only estimated to be at least three times that of social media, but the average order value is 17% higher,” the consulting firm reports.
To fully exploit e-mail today, you need to strategically plan, segment and target. “The divide between best in class and rest in class is widening,” says Geoff Linton, co-founder of Inbox Marketer, a Guelph, Ont., consulting firm. But the rewards make it worthwhile. One Inbox client recorded a 50-fold return on its e-mail campaign investment, says Linton. “Who doesn’t want 50-to-one return?”
Mine the data
A key strength of e-mail marketing is the rich customer data it delivers: who opens your e-mails on which devices and when, and what interested them enough to click. By using surveys or testing various approaches—such as sending different subject lines to two segments of your list—you can further refine what works with your clients.
Unlike most forms of digital marketing, e-mail is a one-to-one channel, enabling a high level of personalization. Sophisticated e-marketers craft thousands of message variations tailored to recipients’ browsing, click-through and purchase history. Since customer information often lives in disparate parts of an organization, the challenge lies in aggregating that data to create a comprehensive view of each consumer.
National frozen-food retailer M&M Meat Shops has been tapping its customer database to guide the frequency and types of offers it sends out to the roughly one million subscribers in its digital loyalty program. As a result, the company has significantly increased message open rates in the past year, says Pegi Klein-Webber, the chain’s director of marketing, loyalty and digital communications. A recent survey about M&M’s packaging produced more than 45,000 completed questionnaires within nine days. “We are getting closer to [individually targeted] e-mail efforts, directing more meaningful communications for a number of campaigns,” she says.
Mind the mobile gap
Today, a little more than half of all e-mails are opened on mobile devices, and that should affect how you communicate. People are more impatient when reading on their phones, so messages must be concise and instantly understandable—with key info placed high. If your customers are predominantly mobile users, Inbox Marketer recommends replacing text links with touchable call-to-action buttons, and leaving space around text blocks to reduce overcrowding and accidental taps.
It’s worth noting, however, that people using phones or tablets to read e-mail are much less likely to click through than those sitting at computers. Additionally, research by Google and Ipsos shows that users choose their devices for vastly different activities, which can dramatically influence their engagement with a message. For instance, most phones are used for quick reads and exchanges; tablets for entertainment and browsing. People tend to defer effort-intensive tasks like making purchases and completing surveys until they’re sitting at their desktops. So a financial business, for example, should target consumers when they’re most likely to be at their computers, as people are often reluctant to deal with personal-finance messages on mobiles. Linton suggests experimenting by sending e-mails at varying times of day and measuring open rates on multiple devices.
Avoid CASL paralysis
Under the new law, companies must get explicit consent from potential recipients within the next two to three years—spurring companies to bombard users with offers for discounts and incentives if they oblige. Linton believes that’s based on a misconception. A lot of companies are trying to “re-permission” their whole customer base and are finding opt-in rates of 5% to 10%. “That’s unnecessary if you can prove an existing business relationship or point to the source of the opt-in,” he says. If someone gives you their business card, and you document when and where you received it, Linton says that’s implied permission.
If there’s an upside to CASL, it’s that it forces marketers to take a rigorous look at e-mail, from not just a legal perspective but a strategic one. And those who move quickly can gain an edge. Like anything else, “there’s a first-mover advantage,” Linton says.