Avoid Becoming Collateral Damage
Updated · Jul 31, 2003
Cyberspace is a crowded place, and for many small e-tailers, getting their message heard is no easy task. And with the increase in spam only exceeded by the demand from the public to eliminate it, the risk of being a collateral casualty of the spam war looms huge for small businesses that rely on e-mail as a primary marketing strategy. For golf e-tailer Go Golf LLC of Albuquerque, NM, utilizing a specialized e-mail application service provider (ASP) has proven to be the difference between a being a successful dot-com and a dot coma.
E-mail: Essential Tool for E-Marketers
E-mail marketing is essential for a small, specialized e-commerce business in the minds of its customers, according to Neal Polachek, senior vice president of the Kelsey Group headquartered in Princeton, NJ. “They can be preemptive so that they can be remembered. To solidify a memory there must be some dialogue.”
In the results of its annual Local Commerce Monitor survey, which it conducts with Constat, Inc., The Kelsey Group reports that, for small businesses up to 100 employees, the percentage of respondents using e-mail is increasing markedly. The number of small businesses collecting or maintaining customer e-mail addresses has increased from 29 percent in the 2002 survey to 39 percent in 2003. Of those, the number that used those e-mail addresses to send informational e-mail increased from 30 percent in 2002 to 36 percent in 2003.
E-mail is an efficient, cost-effective marketing tool. “It is a definite value proposition that SMBs can’t look past, as e-mail marketing offers a positive ROI,” notes Polachek. “Through direct e-mail, [businesses] can communicate effectively and they need to.”
Targeted information of value to the customer, delivered via permission-based e-mail, increases the health of the relationship, and solidifies branding.
Struggling at the Tee-off
When golfbargains.com went online in 1996, e-mail efforts were difficult and unsophisticated, recalls Travis Erickson, director of IS. “We had been using real generic tools. It was cumbersome. Later down the road we purchased something to send e-mails, but it wasn’t very user friendly.”
A service provider followed but was unable to keep up with the growth and needs of golfbaragins.com. “The solution was fine at first for our smaller list, but as we started to grow the list started to become too much to handle, and they didn’t have any built-in tools to handle the maintenance,” said Erickson. “We had to do it in-house and it became rather labor intensive.”
Erickson discovered a solution to this problem in April 2001 in the form of ASP Roving Software’s Constant Contact, a Web-based e-mail marketing service for small businesses.
Erickson had a personal test for the ASP during a free trial. “In one afternoon I put together a small e-mail. I sent one to my AOL account that I knew was finicky — at that time much of the HTML sent to AOL would display coding. I was happy to see that it converted it into text for me.”
Constant Contact is programmed to recognize browsers in order to display e-mail properly, and Roving Software features a test lab to ensure it. Roving Software CEO Gail Goodman explains the company’s ongoing R&D: “We have accounts and PCs set up to cover 95 to 97 percent of the e-mail clients you are likely to encounter. We build our templates to work on all of those environments.”
Avoiding Spam Filters
The public outcry against spam has resulted in a violent backlash from Internet service providers (ISPs): The slightest hint of a complaint can get a bulk e-mail sender blacklisted, not to mention that e-mail must now make its way through the gauntlet of spam filters.
Serving not only as a provider and mentor of best practices, Roving Software has become the champion of golfbargains.com and other small enterprises, reports Goodman. “Our software does content checking and filtering, to check the campaigns before we send them with the same spam filtering technology that recipients are using.”
The ASP also coordinates with the ISPs, as explained by Goodman. “We work with ISPs and corporate mail administrators to educate them on the strengths of our policies and practices. We assist them in tuning the spam filters to ensure that legitimate e-mail is received.”
“The roll that Roving can play … is to become an agency acting on behalf of the small business,” said Polachek. “Why would Golfbargains.com want to walk into all of these ISPs when Roving Software is going to walk in for them? Their core business is not negotiating business deals with AOL.”
Erickson concurs and notes that the little guy can be mistaken for a spammer and become blacklisted with little recourse. “They might blacklist us, where with an established provider, they may not be so quick to push the button to get you blocked.”
The value of using the ASP became apparent for golfbargains.com and other small enterprises with the release of AOL 8.0. Spam filters with increased sensitivities and user controls proved to be weapons of mass destruction on the battlefield of the inbox. Roving went to AOL to seek remedy for the overkill that resulted.
“Of our abuse complaints, 97 percent of them are AOL and all are post-AOL 8.0,” says Goodman. She adds that, in the preemptive strike against spam, “There is the risk of the baby being thrown out with the bath water. A complaint rate that might have been okay twelve months ago will now raise a red flag.”
The threat of severe collateral damage was very real for Erickson. “The last thing we wanted to do was give any impression that we wanted to spam [customers]. AOL recently made some changes on their system that required Roving to reach out on behalf of their customers. They got it resolved.”
Avoiding the Rough
With a tight economy, sales in the golf business have been sluggish this past year. Speed, timing, and precision determines who succeeds says Erickson. “In this market, everybody finds out about the specials from the manufacturer at the same time. Who ever can act fastest sells the most.”
Erickson has tasted success, as the golfbargains.com opt-in e-mail list has grown from 8,000 to 100,000 in two years. “We have had a positive ROI on every e-mail. We average a twenty to thirty percent click-through on some of our better promotions and of that, fifteen to twenty percent have actually purchased.”
Targeted permission-based e-mail campaigns were responsible for a much-needed boost in sales. “Our general site volume for shoppers dropped dramatically this year. We would find a decent deal and shoot out an e-mail, then the site tracker would go nuts for a week or two on what ever we promoted. Without that e-mail capability, we would have been hurting this year.”
Erickson is satisfied with the results. “It would not be cost effective to bring something in-house. We would have had to add another person just to manage our database, reply to the customers and handle the bounce backs. Then there is this spam thing.”
Indeed. If the e-mail can’t get through to the customers, there is no chance for any ROI.