Chris Baggott's Email Marketing Best Practices

The real problem with open rates

A report came out from an ESP that discussed ‘industrywide’ declining open rates.   (click here to read article in eMarketer)

Basically this report outlined three growing problems that are contributing to this problem.   One of my favorites was: 

….A second factor is the phenomenon of file aging. The longer names are on mailing lists, the less productive they become. Over time, the less productive e-mail addresses become a larger part of a marketer's list.

What they don’t talk about is why older names become less productive.   I’ll accept some element of churn.  People leave.   But our research indicates that there is a much more controllable problem here….relevance.

I’ve used the American Airlines example plenty of times in this blog because it hits this problem right between the eyes.   I’m Gold.  I’m in the top tier of all their customers. I’m loyal.  And, I could get 5 or more emails a week….I don’t read any of them!  (Download american_airlines_examples.pdf )

You know why?  The emails have nothing to do with me:  Offers for credit cards (no, no and no!), exotic singles vacations (married with 4 kids…if they ever care to ask) and trip specials that never originate in Indianapolis (where I live)

My point is that file aging is a great explanation for why open rates for this ESP are declining into the low 20%’s.  Almost all retailers suffer from the same problem, and it's because they still are using email as a cheaper Mass Marketing Tool instead of a revolutionary Database Marketing tool.   

But the opportunity here is to fix this by being more relevant.  Only talk to your customers when you have something to say.  (if no specials from Indianapolis, then leave me alone) And when you do talk to your customers; talk to them about something they care about.

I watched Jerry McGuire last night (“I liked your memo”), and Jerry had the answer:  Less email, more focus on the customer!

Databases don’t build customer loyalty or profits

I'm re-reading my old standby...Strategic Database Marketing by Arthur M. Hughes.   As many of you know, this has been my bible since it was first published.  This is the third addition and I'm flattered to have some cases in this new updated version that now covers email as a database marketing tool.

Anyway, I'm just starting this today, and I'm already struck by the following statement:

Databases don’t build customer loyalty or profits.   

What builds loyalty and profits are creative marketing strategies using customized communications based on that database.

Simple, obvious.

Smart Marketing From GM?

Hat’s off to Mark LaNeve, GM’s VP for North American sales, service and marketing.   

GM is launching a monthly email to subscribers of its OnStar service.  (read release here) 

This is a perfect example of marketing that drives value both ways.  The customer benefits because they get a communication that is specific to their car.  The email will tell users the status of their engine, transmission, brakes, airbags and other components.  That seems like a good use of a database to me, and something that can be truely valuable to the car owner.

We’ve been working to get the attention of someone at AutoZone about this idea for a couple of years…ever since I heard the CEO say on CNBC there is about $60 Billion in un-done auto maintenance and repair each year.

I can only imagine how much incremental revenue GM is going to drive into it’s own shops each year with this program….and the customer is actually paying $16.95 to participate.   

That’s a heck of an opportunity for anyone in this business and congratulations to GM for being the first to recognize it.

ExactTarget & Marketing Automation

This week I’m going to be in San Francisco attending the big salesforce.com user conference.

ExactTarget will be launching two new products to work in a closely integrated platform for marketing automation.   Look for ExactMail and ExactAIM if you are our there.

Our key push this year will be to drive strongly into marketing automation the way it needs to be.

The problem with marketing as you know (because I say it over & over & over again in this redundant blog) is that marketing is too hard.

It’s too hard to buy and install enterprise software, It’s too hard to integrate various data sources, it’s too hard for normal marketers to execute and it’s too hard to deal with Marketing Automation “Software” that is really just professional services in disguise.

Pay attention this week, It’s going to be really fun!

Great Letter from OgilvyOne Leader

I usually don’t ever read letters to the editor but this one written by Rory Sutherland, Vice-Chairman and Creative Director of OgilvyOne was perfect.

In responding to a Fortune Magazine article called: Birth of a Salesman (Aug 8th) Confusion on Madison Ave. (click here to read)

Mr. Sutherland wrote: In “Birth of a Salesman” Daniel Gross suggests that many people currently in advertising are uncomfortable in a world where media consumption is increasingly decided and controlled by the consume. I agree. Bit I don’t agree that this new world would be incomprehensible to industry giants like David Ogilvy and Leo Burnett. In fact, Burnett and Ogilvy learned their trade when most money was spent on long-copy press advertising: If you did not interest or entertain your intended readership, then you had no readership. It is the intervening age—of broadcast, interruption based communication—that is out of step with today’s consumer-controlled media worlds, and it is the people who grown up in that world who find themselves most wrong-footed…….

It just reinforces that these are not new ideas, just forgotten...Boy, would I like to meet Rory Suth.

Should I send my e-mail under my domain name or under my service provider’s domain?

Chip had a great answer to this question today in BtoB that I thought I'd share:

Answer: E-mail recipients put more weight on who the e-mail is from than any other item when choosing which e-mails to open, which to delete and which to complain about.

Our “from address” testing shows an increase in open rates and click-through rates when the “from” name, “from” address and subject line are appropriately branded. It also shows a reduction in spam complaints.

An e-mail service provider should give you a choice of how your “from” address is managed. For example, possible options for XYZ Brand include:

Option 1: news@xyzbrand.com

Option 2: xyzbrand@xyzbrand.com

Option 3: news@xyzbrand.espdomain.com

Option 4: xyzbrand@xyzbrand.espdomain.com

In options 1 and 3 above, the “name” side of the e-mail address (left side of the @ symbol) isn’t branded. This is the first item I’d recommend testing in your business. We recently changed to option 2 (a branded e-mail name) for several clients based on statistically significant tests showing a response increase and a complaint reduction when compared to option 1.

Options 3 and 4 are typical implementations with an e-mail service provider (ESP). Both options use a subdomain of the ESP (espdomain.com), enabling the ESP to more easily support reply mail management or manage DNS issues, such as Sender ID or SPF authentication (since they maintain control of the root domain).

How does using an e-mail domain different from your own affect response rates and complaints? The jury is still out. However, a recent Gartner Group survey of 5,000 online buyers found that more than 1 million consumers were scammed out of $925 million in 2004 because of phishing attacks. Think that makes consumers aware of the brands their e-mails come from? Of course it does.

If consumer reactions to spam and phishing are any indication, it would seem the best solution is one that doesn’t obfuscate your brand in any way. Leverage your asset and use your name in your “from” name, “from” address and subject line.

Chip House is VP-privacy and deliverability at ExactTarget, an Indianapolis-based provider of permission-based e-mail marketing solutions.