Targeted Email: From Spam to Choice Part 4
Bruce McCracken continues his series on targeted e-mail by speaking with the experts on the criteria companies should use when deciding how and when to implement an e-mail marketing campaign.
In the February 2003 report, "What Works™: Best Practices in Marketing Technologies," Kent Allen, research director, E-business/E-CRM for the Aberdeen Group of Boston, writes, "E-mail builds brand awareness (via rich media), helps acquire new customers (via viral marketing), improves customer relationships (by creating bi-directional dialogue), and creates consumable value (via newsletter marketing). And in most cases, e-mail accomplishes these and other objectives more cost effectively than does traditional direct mail."
In the March 2002 report, "Marketing & Branding Forecast: Online Advertising and E-mail Marketing Through 2007," Jupiter Research submits, "E-mail marketers will spend $1.4 billion in 2002, growing to $8.3 billion in 2007. Retention campaigns will dominate the volume of non-spam e-mail marketing messages over the next five years. Indeed, each online consumer will receive more than 1,500 retention-based e-mail messages in 2007." The figure below details the spending growth of e-mail marketing.
It is no longer a question of if, but how to implement an e-mail game plan. Implementing a permission-based e-mail strategy involves decisions by the enterprise on which of three approaches to choose. Essentially, the choices are to buy an application and do everything in-house, sign on with an application service provider (ASP), or hand everything off to an outsource provider. Of course, there can be any combination of these three. The major key in making this decision is assessing the resources the company has internally and its core competencies.
In deciding how to implement an e-mail strategy, an enterprise must determine the relative strengths and weaknesses it has in infrastructure and competencies. Additional factors include the target audience and the nature of the business.
Kevin Scott senior analyst for AMR Research of Boston explains, "As companies are making decisions on targeted e-mail, they need to assess their core competencies. One of the follies is that everybody thinks they are a good marketer. It is hard to tell if you are not a good marketer. Companies that aren't typically marketers may have the personnel already but not have the expertise in handling e-mail, especially managing the lists. Another factor is managing the in flow that comes back."
David Daniels, senior analyst for Jupiter Research echoes similar sentiments. "The biggest problem that we see is the level of sophistication with the marketer. To date we've seen that, largely, most marketers do not have the level of sophistication necessary to advance their marketing results, and simply providing the marketer with technology is not the answer."
An assessment of the strengths and weaknesses of the organization can be found by contacting consultants, outsourcing providers, trade associations, and university business schools. Getting more than one opinion will help neutralize the ulterior motives of those trying to sell their services. Of course, talking with peers to learn from their experiences is extremely beneficial.
The enterprise must be willing to listen and have an open mind. Nobody likes to be told that they have an ugly baby, but sometimes it must be accepted that the kid is far from eye candy. The naked truth may be that the enterprise does not have the creative people on board to design an effective e-mail campaign. If that is the case, the firm must determine if they are willing to increase the head count to shore up the deficiency.
Scott adds, "Not having the creative services is one of the biggest reasons for people wanting to outsource. It takes something special to be a creative person. They might not have expertise in campaign design, customer segmentation, the preamble of the execution."
Allen opines, "It is not a hardware or a technology issue, but more tied in with the sophistication of the end user. One of the barriers and challenges, especially for small companies, is getting e-mail managed and validated. It might not be too hard to build a new database, but where it gets tricky is with larger companies that may have a large portfolio of brands. There may be a separate customer list for each brand. Marketing is getting more sophisticated and integrated in with other marketing initiatives."
The IT and infrastructure are other factors. Can IT comfortably handle the new task with the current hardware array? Do they have expertise and personnel to undertake it? Allen submits, "It is less easy to tackle the data management issues and that is why we are seeing more and more ASP offerings that deliver not only execution technology but help to deliver data management."
The figure below from the January 2002 AMR Research report "Turning E-Mail Campaigns From Trash to Cash" reflects the spending ratios in categories comparing outsourcing versus purchasing an application. By evaluating the differences, a firm can gauge which approach might be optimal based upon their strengths and weaknesses in the respective categories.