Articles - Written by Arthur Hughes - 1 Comment
Bonding Click by Click
cessful database marketing has always been based on communications. There is no point in building and maintaining a database unless you use it to create personal communications to your customers, based on information in the database, and designed to increase loyalty, retention, referrals and cross sales.
Before the internet, such communications were rare. Personal letters were expensive, and retention building outbound phone calls were out of reach for most marketers. The web has changed everything. Now you can afford to do many interesting and profitable things that you never could do before. Let’s see what some marketers have done to use emails to build sales and loyalty.
Quris (www.quris.com) helped a major retailer to accumulate 220,000 customers who asked for email newsletters about new movies. Quris decided on a six month test program, setting aside a random control group of 16,000 who got no emails, even thought they asked for them. The retailer does not sell direct. Customers have to come in to one of their stores to buy their products. Customers have to be registered to buy, so Quris had a very good way to track the results of their efforts.
Quris began the program with an opt-out message to be sure that no one would think that spam was involved. From this they created an opt-in test universe of 170,000. Half got emails and half got emails with coupons for buy one, get one free. The results were really fantastic.
Overall, during the six months, those who got the emails bought 28% more than those who did not. Those who got coupons responded better than those who did not. Previously active customers became more active than they had been. Many inactive customers were reactivated.
This case is solid proof, if anyone needs it, of the power of email database marketing. But, wait. There’s more.
Miles Kimball has been sending out catalogs since 1935. In the spring of 2003 they worked with DoubleClick (www.doubleclick.com) to create an email test with their catalog mailings. Vicki Updike, VP of Marketing selected 40,000 customers who had used their web site to order items from their paper catalog. She divided them into two exactly identical groups: 20,000 got emails in conjunction with three different catalogs over a two month period. The other 20,000 got only the three catalogs. Those who got the emails bought 18% more than those who got only the catalogs. This is exciting stuff. It is going to change database marketing forever.
Airlines have been sending out monthly statements showing how many miles you have accumulated. With tens of millions signed up, the statement costs have been of serious concern. Recently most of them have been sending their statements by email. Saving? About $0.80 per member per month, or hundreds of millions of dollars per year. My email from American this week begins: “Arthur Hughes, here is your personal edition of AAirmail” It features information about flights from Fort Lauderdale, which is where I live. This is relationship marketing!
These examples only scratch the surface of the impact of emails on the database marketing world. In the past couple of years, marketers have used emails for:
- Last Minute Specials
- Low cost item promotion
- Viral Marketing
- Follow up messages
- Micro Sites
Let’s look at a few of these.
Last Minute Emails: In the past few years, airlines have been sending weekly personalized last minute emails designed to sell empty seats. These have been working. Such messages were impossible before the advent of email. Why? Because direct mail is too slow. These emails can be sent out on Thursday to sell seats on Saturday flights. Direct mail could not possibly work. But even more important, these emails to air miles members help to maintain the relationship, retention and loyalty of members, even if they do not grab at the last minute specials.
Low Cost Items: Everyone in the direct mail business knows that you cannot successfully promote low cost items using direct mail. If the product costs less than $30, and your response rate is 2%, you will go broke. Emails change the equation. Universal Music (UMG) has had great success using emails to promote their CDs which sell at retail for less than $20. On the case of each CD sold, UMG puts a web site for the artist (such as www.sherylcrow.com). Arriving there, fans get a chance to listen to some of Sheryl’s music, and to register as a fan. Those registered go into a database from which they will receive emails about Sheryl’s concert tours and new CD releases. In recent promotions, UMG used email to reach 1.4 million fans achieving an 11.2% response rate. Fans went to the web site, registered and downloaded. 50% of these reported that they bought a CD at retail as a result.
Viral Marketing: Emails also make it possible to expand your database by enlisting customers as recruiters. More and more emails are asking customers to recommend others who want to read the same message. They provide a place for customers to email information to their friends which would be very difficult to do with direct mail. A major rifle manufacturer sent an electronic white paper on a revolutionary new product to 200,000 registered owners. Owners were encouraged to email the white paper to their friends by entering their friend’s emails on the web site linked to the email. As a result, the manufacturer acquired the names of several thousand new potential customers.
Follow Up Messages. Amazon began it, and now every good web site uses the same techniques. When you order something, you get an instant email saying, “Your order has been received. Thank you.” Later you get an email saying “Your order was shipped today.” These are relationship building messages that would be impossible with direct mail. They maintain loyalty. They are a powerful way to use database marketing and emails.
Micro-Sites. A micro site is a temporary web page set up for a particular promotion. Customers arrive there as a result of an email which says click here somewhere in the text. At this site, the customer can do whatever the email was supposed to get you to do: register, update your profile, buy a product, find a dealer, or download a coupon. Any data entered into a micro site goes directly into a database – in fact it is part of the database. The beauty of a micro-site is that it is very inexpensive to set up, and does not involve all the committees and expense involved in making changes to a company’s main web site. Micro sites permit the text of the emails to be very short, which gets more of them opened and read. As an example of a recent micro-site, here is an email we sent out to people who heard me speak in Chicago:
The beauty of this type of email is that you can learn within a few hours, how many people received your email, how many read it, clicked on items of interest or downloaded the information. This is real linking of emails with database marketing.
In summary, I think that the internet and emails are the best things that have happened to Database Marketing since they invented relational databases. Emails have made true relationship marketing possible.
Arthur Middleton Hughes, vice president of The Database Marketing Institute, has presented 28 seminars on database and email marketing. Arthur has also authored several books includingStrategic Database Marketing 4th Edition (McGraw-Hill 2012). He and Andrew Kordek, chief strategist and co-founder of Trendline Interactive, are hosting a two-day Email Strategy Study Group in Fort Lauderdale March 26-27, 2013, featuring group competition for email marketers responsible for subscriber acquisition, lifetime value, ratings and reviews, boosting their email budget, and doubling their ROI. To learn how to attend the Study Group,click here.
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