E-MAIL MARKETING AND ITS ADVANTAGES AND DISADVANTAGES

E-MAIL MARKETING AND ITS ADVANTAGES AND DISADVANTAGES

By

Miss. P. PIRAKATHEESWARI, Lecturer in Commerce,

Sri Sarada College for Women (Autonomous), Salem – 16.

E-mail marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fundraising messages to an audience. In its broadest sense, every e-mail sent to a potential or current customer could be considered e-mail marketing. However, the term is usually used to refer to:

• sending e-mails with the purpose of enhancing the relationship of a merchant with its current or previous customers and to encourage customer loyalty and repeat business,
• sending e-mails with the purpose of acquiring new customers or convincing current customers to purchase something immediately,
• adding advertisements to e-mails sent by other companies to their customers, and
• sending e-mails over the internet, as e-mail did and does exist outside the Internet (e.g., network e-mail and FIDO).

Researchers estimate that United States firms alone spent US$400 million on e-mail marketing in 2006.

What sort of email?

1. Email is a very powerful marketing tool. In spite of spammers abusing the medium, email can still be used and is still valued by users for timely, rich and enticing information and advertisements.   In its broadest sense, the term covers every email you ever send to a customer, potential customer or public venue. In general, though, it’s used to refer to:

• Sending direct promotional emails to try and acquire new customers or persuade existing customers to buy again
• Sending emails designed to encourage customer loyalty and enhance the customer relationship
• Placing your marketing messages or advertisements in emails sent by other people

Forms of E-Mail Marketing

There are three main forms of email marketing as the electronic equivalent of:

• Direct mail
• Sending people a print newsletter
• Placing advertisements in subscription magazines and newspapers

Why is email marketing so popular?

Email marketing is so popular because:

• sending email is much cheaper than most other forms of communication
• email lets you deliver your message to the people (unlike a website, where the people have to come to your message)
• email marketing has proven very successful for those who do it right

Why it works

Email marketing works for a variety of reasons…

• It allows targeting
• It is data driven
• It drives direct sales
• It builds relationships, loyalty and trust
• It supports sales through other channels

Modern email marketing services and solutions support database integration, segmentation and various other tricks and techniques for improving the targeting of outgoing messages. Advanced methods generate on-the-fly emails customized down to an individual recipient basis.  And every email campaign you send out generates a heap of actionable data you can use to refine your approach and messages.

Email promotions and offers generate immediate action: sales, downloads, inquiries, registrations, etc. Informative email newsletters and other emails send people to offline stores and events, prepare the way for catalogs, build awareness, contribute to branding, strengthen relationships, encourage trust and cement loyalty.

Types of E-Mail Marketing

There are three types of email marketing:

1. Direct email

Direct email involves sending a promotional message in the form of an email. It might be an announcement of a special offer, for example. Just as you might have a list of customer or prospect postal addresses to send your promotions too, so we can collect a list of customer or prospect email addresses.  We can also rent lists of email addresses from service companies. They’ll let we send your message to their own address lists. These services can usually let we target your message according to, for example, the interests or geographical location of the owners of the email address.

2. Retention email

Instead of promotional email designed only to encourage the recipient to take action (buy something, sign-up for something, etc.), you might send out retention emails.

These usually take the form of regular emails known as newsletters. A newsletter may carry promotional messages or advertisements, but will aim at developing a long-term impact on the readers. It should provide the readers with value, which means more than just sales messages. It should contain information which informs, entertains or otherwise benefits the readers.

3. Advertising in other people’s emails

Instead of producing your own newsletter, you can find newsletters published by others and pay them to put your advertisement in the emails they send their subscribers. Indeed, there are many email newsletters that are created for just this purpose – to sell advertising space to others.

Advantages

E-mail marketing (on the Internet) is popular with companies for several reasons:

• A mailing list provides the ability to distribute information to a wide range of specific, potential customers at a relatively low cost.
• Compared to other media investments such as direct mail or printed newsletters, e-mail is less expensive.
• An exact return on investment can be tracked (”track to basket”) and has proven to be high when done properly. E-mail marketing is often reported as second only to search marketing as the most effective online marketing tactic.
• The delivery time for an e-mail message is short (i.e., seconds or minutes) as compared to a mailed advertisement (i.e., one or more days).
• An advertiser is able to “push” the message to its audience, as opposed to website-based advertising, which relies on a customer to visit that website.
• E-mail messages are easy to track. An advertiser can track users via auto responders, web bugs, bounce messages, unsubscribe requests, read receipts, click-throughs, etc. These mechanisms can be used to measure open rates, positive or negative responses, and to correlate sales with marketing.
• Advertisers can generate repeat business affordably and automatically.
• Advertisers can reach substantial numbers of e-mail subscribers who have opted in (i.e., consented) to receive e-mail communications on subjects of interest to them.
• Over half of internet users check or send e-mail on a typical day.
•  Specific types of interaction with messages can trigger (1) other messages to be delivered automatically, or (2) other events, such as updating the profile of the recipient to indicate a specific interest category.
• E-mail marketing is paper-free (i.e., “green”).
• Tracking and response metrics enables tuning and optimisation of the E-mail marketing channel by a process of testing different variants and calculation of statistically significant results.

Disadvantages

Many companies use e-mail marketing to communicate with existing customers, but many other companies send unsolicited bulk e-mail, also known as spam.

Internet system administrators have always considered themselves responsible for dealing with “abuse of the net”, but not “abuse on the net”. That is, they will act quite vigorously against spam, but will leave issues such as libel or trademark infringement to the legal system. Most administrators possess a passionate dislike for spam, which they define as any unsolicited e-mail. Draconian measures—such as taking down a corporate website, with or without warning—are entirely normal responses to spamming. Typically, the terms of office in Internet companies’ contracts permit such actions; therefore, the spammer often has no recourse.

Illicit e-mail marketing predates legitimate e-mail marketing. On the early Internet (i.e., Arpanet), it was not permitted to use the medium for commercial purposes. As a result, marketers attempting to establish themselves as legitimate businesses in e-mail marketing have had an uphill battle, hampered also by criminal spam operations billing themselves as legitimate ones.

It is frequently difficult for observers to distinguish between legitimate and spam e-mail marketing. First, spammers attempt to represent themselves as legitimate operators. Second, direct-marketing political groups such as the United States Direct Marketing Association (DMA) have pressured legislatures to legalize activities that some Internet operators consider to be spamming, such as the sending of “opt-out” unsolicited commercial e-mail. Third, the sheer volume of spam has led some users to mistake legitimate commercial e-mail for spam. This situation arises when a user receives e-mail from a mailing list to which he/she subscribes. Additional confusion arises when both legitimate and spam messages have a similar appearance, as when messages include HTML and graphics.

One effective technique used by established email marketing companies is to require what is known as the “double opt-in” method of requiring a potential recipient to manually confirm their request for information by clicking a unique link and entering a unique code identifier to confirm that the owner of the recipient email address has indeed requested the information. Responsible e-mail marketing and auto responder companies use this double opt-in method to confirm each request before any information is sent out.

A report issued by the e-mail services company Return Path, as of mid-2008 e-mail deliverability is still an issue for legitimate marketers. According to the report, legitimate e-mail servers averaged a delivery rate of 56%; twenty percent of the messages were rejected, and eight percent were filtered.

Due to the volume of spam e-mail on the Internet, spam filters are essential to most users. Some marketers report that legitimate commercial e-mail messages frequently get caught and hidden by filters; however, it is somewhat less common for e-mail users to complain that spam filters block legitimate mail.

Companies considering the use of an e-mail marketing program must make sure that their program does not violate spam laws such as the United States’ Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM), the European Privacy and Electronic Communications Regulations 2003, or their Internet Service Provider’s acceptable use policy. Even if a company adheres to the applicable laws, it can be black-listed (e.g., on SPEWS) if Internet e-mail administrators determine that the company is sending spam.

CAN-SPAM compliance

The CAN-SPAM Act of 2003 authorizes a US$11,000 penalty per violation for spamming each individual recipient. Therefore, many commercial e-mail marketers within the United States utilize a service or special software to ensure compliance with the Act. A variety of older systems exist that do not ensure compliance with the Act. To comply with the Act’s regulation of commercial e-mail, services typically require users to authenticate their return address and include a valid physical address, provide a one-click unsubscribe feature, and prohibit importing lists of purchased addresses that may not have given valid permission.

In addition to satisfying legal requirements, e-mail service providers began to help customers establish and manage their own e-mail marketing campaigns. The service providers supply e-mail templates and general best practices, as well as methods for handling subscriptions and cancellations automatically. They also provide statistics pertaining to the number of messages received and opened, and whether the recipients clicked on any links within the messages.  The CAN-SPAM Act was recently updated with some new regulations that went into effect on July 7, 2008.

Opt-in e-mail advertising

Opt-in e-mail advertising, or Permission Marketing, is a method of advertising via e-mail whereby the recipient of the advertisement has consented to receive it. This method is one of several developed by marketers to eliminate the disadvantages of e-mail marketing.

            Opt-in e-mail marketing may evolve into a technology that uses a hand shake protocol between the sender and receiver. This system is intended to eventually result in a high degree of satisfaction between consumers and marketers. If opt-in e-mail advertising is used, the material that is e-mailed to consumers will be “anticipated”. It is assumed that the consumer wants to receive it, which makes it unlike unsolicited advertisements sent to the consumer. Ideally, opt-in e-mail advertisements will be more personal and relevant to the consumer than untargeted advertisements.

A common example of permission marketing is a newsletter sent to an advertising firm’s customers. Such newsletters inform customers of upcoming events or promotions, or new products. In this type of advertising, a company that wants to send a newsletter to their customers may ask them at the point of purchase if they would like to receive the newsletter.  With a foundation of opted-in contact information stored in their database, marketers can send out promotional materials automatically. They can also segment their promotions to specific market segments.

Conclusion

Responsible email marketing is based on the idea of permission. This is a complex issue and the subject of intense debate in the marketing community.  It’s important to stress that anyone considering email marketing must read up on the subject of permission and spam. If you don’t understand the importance of permission and the risks of ignoring it, then we could be heading for commercial disaster.  It’s actually relatively easy to ensure that the address lists we use or build yourself are permission-based.