Yet despite this, many brands continue to view email as a channel through which to only confirm an order or flag up a potential problem. Of course, there are some notable exceptions, but there are many more examples of brands failing to use email marketing in a proactive and targeted fashion. Worse still, they're missing out on a fantastic opportunity. "Email marketing is DM on steroids," says Gail Dudleston, managing director of digital agency twentysix. "We work with one retail client whose email marketing campaign alone generated more than £20 million in revenue over a 20-week period. So the potential for email marketing is phenomenal."
"Email marketing offers limitless opportunities to engage with a customer, cross-sell to them, or simply reward them for loyalty," agrees Nick Christie, UK country manager for Epsilon, an email-marketing provider. Yet marketers miss too many opportunities when it comes to email.
For a start, many brands fail to communicate with customers outside a transaction - even when they have something interesting to tell them, such as the launch of a new product or service, or the start of their sale. But as long as the content is relevant, consumers will want to hear about it, believes Christie. "We did some work with Proctor & Gamble's Pampers brand, emailing pregnant women and mothers with advice based on where they were in their pregnancy or how old their baby was." The returns for such campaigns can be fantastic - the Pampers emails had open and click-through rates of 60 per cent and 20 per cent respectively.
This type of campaign is a tremendous way to raise brand awareness and drive visitors to a brand's site; P&G, for example, saw a 300 per cent uplift in visits. "For companies that may not be selling something directly and who may have site advertising as a revenue model, email marketing provides an opportunity to charge advertisers more because they have more eyeballs on their site," adds Christie.
In competitive markets, branding via email marketing provides an opportunity to differentiate a company's products and services. Zavvi, the UK's largest independent entertainment retailer, not only needed to raise its profile when it emerged from the management buy-out of Virgin Megastores but also ensure it stood out in an already competitive sector. "One thing that's really important to us is to be seen as being knowledgeable about our area, even if it's not something that will immediately lead to a direct sale," says Suzanne Jiggens, CRM and new-media marketing manager at Zavvi. So when the NME award nominations were announced, the retailer emailed customers who had opted in to receive marketing communications (and specifically marketing communications around music) to tell them about it.
Zavvi is able to communicate far more effectively with customers using email since implementing campaign management software from Neolane, because it can now track the same customer from in store to online and vice versa. "Before we were doing very little: every now and again we'd send a newsletter to our customers through our e-commerce platform provider, but it was very ad hoc and we didn't really get that many results from it," says Jiggens. The fact Zavvi is now able to talk to its customers and build a relationship with them based on their preferences is one of the main ways in which it is avoiding missed opportunities.
Brand benefits
Many brands, however, don't even use the opportunity of sending a confirmation or transaction email to customers to advertise to them. This is another missed opportunity, because, while there are some data-protection issues to be aware of - brands can't market to consumers unless they have opted in to receive marketing communications - it's also a good time to reiterate the brand benefits, cross- or up-sell. "Add more branding to transactional emails and try to get a referral out of them if you can through recommend-a-friend services," suggests Dudleston.
Likewise, she recommends sending automatic trigger emails throughout the customer lifecycle, particularly for products or services with long delivery dates. "It's good because consumers know exactly where their stock is and when it will arrive. If something relevant to the purchase comes in - such as the latest accessory - you could also email the customer to ask if they want it tagged to their order. It's all about relevancy," she says.
Personalisation - whether through addressing the email to a specific customer or delivering offers based on their preferences - is another effective way of increasing the success of email marketing campaigns. "The benefit of email marketing is that it's easy to make different, personalised versions of the same email down to the product and call to action, so it's almost one-to-one marketing," says Dudleston. But too many brands still use the scattergun approach of sending one mass email to many people, with limited results.
Zavvi sends more than 400,000 emails a week to interested customers and around 25 to 30 per cent of respondents have declared their preferences after logging on to the website. "So if someone has told us he is specifically interested in buying games and we know he is buying Xbox 360 games, there is no point in telling him about PSP games in the newsletter," says Jiggens. In some of its best performing campaigns, this has delivered Zavvi a return on investment of 23:1.
Segmentation works hand in hand with personalisation to make email campaigns as relevant and targeted as they can be. Many brands have online 'preference centres' where users can tell them what they want to hear about and how often. Based on this information, marketers can then target groups of customers by their preferences and give customers control of the frequency and types of communication they receive - thereby minimising the possibility of over-communicating or communicating the wrong information.
Highest returns
Alongside personalisation, integrated multi-channel campaigns are seen in the industry as delivering the highest returns. One trend Jiggens has noticed is that customers often tell Zavvi about their preferences but their buying behaviour reveals a very different picture. By joining up different marketing channels, brands should, in theory, be able to gain a much clearer picture of each customer based on what they say and do. "Usually, it's because they're buying gifts for someone else - so a mother might have said she's interested in DVDs but will buy a lot of games on the site for her son," she explains.
Admittedly, there are challenges around this - integrating data from multiple sources and ensuring constant compliance with data-protection legislation is never straightforward - but the benefits it brings are worth it. For instance, integrating web analytics results with email marketing campaigns can reduce the number of abandoned shopping carts and deliver richer insights into customer behaviour.
Integrating email campaigns with offline marketing channels can also be hugely successful, although it's not used by brands as often as it should be. "For one of the retail banks, we used a teaser email campaign to link into a piece of DM pre- and post-campaign," says Dudleston. "To run a teaser campaign through DM is very difficult because of postage timings. But, with email campaigns, you know exactly when it will get there and it can be highly targeted."
Email marketing might be less established than DM, but that's no excuse for not taking advantage of the opportunities it presents as an advertising channel for marketers. Given the relatively low investment required to run an email marketing campaign - or, more importantly, the return on investment a personalised and targeted email campaign can deliver - marketers would be foolish not to grab any email marketing opportunities they can before their competitors beat them to it.
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