±±¾©Èü³µpk10

How many marketers can honestly say customers welcome their email?

Despite laws banning unsolicited emails to people who have not opted in to receive them, only 52% of the top 50 companies by turnover in the banking, insurance, publishing, retail and telecoms sectors are playing by the rules. And retail is the least compliant, with just 42% playing ball, according to research by mail and messaging company Pitney Bowes.

Under the Electronic Communications Directive, which came into force six months ago, companies must offer non-customers the opportunity to opt in to receive further email marketing messages when their details are recorded as a result of an enquiry or promotion.

Any email addresses collected from non-sales routes such as prize draws or competitions have to be re-emailed, and the recipients asked if they want to continue hearing from that company. If they are not, the record has to be erased.

For a channel battling to avoid being labelled the new junk mail, the research is not good news. Indeed, Citibank was so concerned about the implications of the Act that it froze all email marketing until it understood the issues. It knew the consequence of sending emails to people who don't want them can be nothing short of cataclysmic.

'There is nothing more damaging than email for destroying long-fought loyalty and brand association,' says Britta Baymen, email marketing manager at BT Retail. 'It really is as simple as that.'

But marketers are not abiding by the rules of customer acquisition, says David Geoffreys, the report's author and head of marketing at Pitney Bowes. 'Many websites we looked at had the "tick here" box to receive marketing emails already ticked,' he says. 'This is assuming consent and is illegal because they are not actively ticking to agree themselves.'

Invitation only

The problem can easily be remedied by forcing web users to tick the box.

But many marketers say this is one of the few straightforward interpretations of the Act. Existing customers are a moot point. The law only applies to sending emails to non-customers on the database, but even here there are arguments about the definition of non-customer.

Some believe it is perfectly clear. 'The guidelines permit continued use of an existing mailing list as long as it was compiled in accordance with relevant privacy legislation before 11 December 2003, that the mailing list has been used recently and the intended recipient has not already opted out,' says Guy Hanson, technical manager of marketing services at e-communication firm Mailcom.

Others - the DMA included - say marketers should re-email the entire database to check consumers' continued permission to be emailed, even though they offer the chance to opt out each time. The DMA views not offering 're-opt-in' as non-compliance, but many argue they will lose customers if the email's sole purpose is to ask whether recipients want to be marketed to.

The Information Commissioner has unhelpfully stated that he is less concerned about this than the exploits of repeated spammers. Indeed, it is estimated that just five or six companies are responsible for 75% of spam.

According to others, ignoring re-opt-in for existing customers can damage a company's reputation. The unfortunate reality is that even if permission was sought many years prior to the directive, consumers are unlikely to remember and will designate the email as spam.

'Marketers must bite the bullet to ask for new opt-in even if they think they don't need to,' says Paul Cook, chief executive of e-CRM provider RedEye, which runs email campaigns for clients including William Hill and The Red Cross. For each client RedEye re-emailed, half of the so-called customers did opt out, but since then click-through rates have doubled, revenue per email is five times higher and the company is reporting double the response from half as many emails.

Chris Grey, sales director at email list company TRG Strata, points to a similar experience with its client Ticketmaster, a concert ticket-booking website. 'Consumers had to tick not to have their address passed on to other companies that could market to them,' he says. 'With the new legislation we obviously made it opt-in, but took the brave decision to make it integral to the order. People couldn't complete their purchase until they had said yes or no to receiving emails from Ticketmaster or third parties. We had a 22% increase in people agreeing to have their emails being passed on.'

The personal touch

Some marketers are going a step further, monitoring customers' spending patterns or web browsing patterns and tailoring their emails to suit.

'The best way to work with the rules is to make emails as personal as possible,' says Mike Wade, head of supporter development at Oxfam. The charity started using email in 2000, to see whether it was a viable channel for donations and to test Gift Aid. One test email generated no gift donations at all, but an unusually high number of people clicked through to a microsite offering the chance to send a campaigning letter to Tony Blair. 'This told us that people need to be treated differently, and emails are now segmented between donors and campaigners,' says Wade.

Marketers soon find out that among consumers who do want to be contacted, opt-out is minimal. When mail-order underwear company Bravissimo emailed its customer base last year, on the recommendation of its agency, Tamar, opt-out was virtually zero. Bravissimo believes this is because email is used not just as a sales tool, but also to build a brand community. Emails are kept to a minimum.

BT's Baymen agrees: 'It's tempting to email everyone all the time, but all our emails are scrutinised by our data team, which makes sure customers are not over-mailed. We could potentially be targeting the same person for, say, broadband or managed services, so we prioritise the contact or stagger the email.'

At BT, the maximum is one email every fortnight. At Bravissimo, it is once a month. Both are lucky, as they don't need to buy prospect email names from outside sources, a practice that causes concern about just how watertight opt-in really is.

Under the EC Directive, it is the marketer that is responsible for ensuring the standard of opt-in of lists it buys, not the provider. However, there are many sources of cheap lists where the opt-in level is questionable.

William Corke, managing partner of Harvest Digital, manages email campaigns for MBNA and Birmingham Midshires. Despite the arguments, he regularly sources data from Interactive Prospect Targeting (IPT), where consumers receive prize draw entries in exchange for opting in. 'The growth of IPT shows this is a solid way of reaching people who don't mind sharing their email addresses for relevant offers,' he says.

No list is as watertight as those that specify topics about which consumers have requested information. One provider of such lists is The Preference Service, which surveys a million consumers every six months on behalf of clients such as VisitBritain, Beck's and Renault.

Managing director Thomas Adalbert boasts sales uplift in 60% of cases.

When the company receives an email address, it emails it back to confirm the opt-in. Thereafter, any emails sent to customers who have opted in will come from The Preference Service rather than the client. Most recently, the company has signed a deal with PureProfile, where the advertiser pays respondents £1 each time they respond to an email.

Initiatives such as these suggest that email marketing has a healthy future ahead if it. But marketers who flout the rules or best practice should be warned - consumers are hard masters. Upset them with one email too many, and your brand and reputation are bound to suffer.

TRENDS

- According to the DMA's Direct Marketing Census of 2003, new media spend grew by 17% to £525m.

- 65% of companies spend 1% to 5% of their marketing budget on email marketing; another 22% spend more than 5%.

- Email marketing is expected to cannibalise 13% of direct mail revenue by 2005.

- The average response/click-through rate is 5.4%. It is just 3.5% for rented opt-in lists, but 10% for brands' in-house lists.

- Almost 60% of email users can receive HTML email, which gets twice the response rate as text email.

Source: DMA, Jupiter research, Forrester Research

COMPLIANCE

- On average, only 52% of the top 50 companies in the banking, insurance, publishing, retail and telecoms sectors allowed subscribers to actively opt in to email marketing messages.

- The telecoms sector had the highest compliance with the directive, with 66% allowing opt-in.

- The two financial sectors - banking and general insurance - had disappointing compliance levels, at 50% and 46%.

- The retail sector fared the worst, having just 42% of companies showing compliance.

- The publishing sector was 57% compliant.

Source: Pitney Bowes

LEGAL EMAIL

There are two main rules in the directive, one for all email marketing and one for unsolicited messages to individuals.

1. Senders of email marketing must not conceal their identity and must give a valid address for opt-out requests.

2. Emails cannot be sent without prior consent. The strict opt-in rule doesn't apply if three other criteria are satisfied.

These are:

1. The recipient's email address was collected 'in the course of a sale or a negotiation for a sale'.

2. The sender only sends messages relating to 'similar products and services' for which the original sale or negotiation was sought.

3. When the address was collected, the recipient was given the opportunity to opt out and did not take it.