white paper~email mktg

7/31/2019 White Paper~Email Mktg

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W H ITE PA PER | 2 0 0 4

E-mail Marketingas a Relationship

StrategyThe Four Steps to High Im pact

E-mail Marketing


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Ma rketers agr ee: Toda ys business lan dscape has dram at ically chang ed. Faced with

consumer frustration over spam ,comp etitive e-marketing technologies and recent legislation,

companies are struggling to establish the right mix,m edia and messaging to effectively con-

nect w ith p rospects and custom ers. For e-mail marketing in p articular, new rules signify th e

end of m arketers si t t ing on t he fence,w ait ing unt i l next q uarter or next year to im prove

e-mail init iatives.

For years, m any decision m akers knew th ey shouldpay more attention to t heir e-mail cam-

paigns to capture ongoing value.But the channel was too po pular with custom ers,to o easy

to imp lement and com paratively inexpensive to m erit drastic action. Com panies were left

on their own t o determine to wh om ,w here and when to send e-mail marketing campaigns,

oft en relying on results from increased m essaging volum e or flashy creative. Organizations

now realize these strategies no long er wo rk.

Yet d espite new challenges,e-mail m arket-

ing remains a highly powerful customer

relat ionship m edium. Viewing the current

business environment as an opportunity,

success relies on t he abilit y to d ifferentiatean e-mail marketing approach by design-

ing i t in the context of a custom er-based

bu siness strateg y.Todays com panies must

focus on creating clear, strategic decision

cri ter ia around their e-mail market ing

efforts to ensure that they are not only

effective,b ut also intelligently building t he

custom er relationship.

E-mail Marketing as a Relationship Strategy is a guide for combining leading customer

relationship strategies with best practices within e-mail marketing. It begins w ith a look atth e mod ern e-mail marketing landscape and an examinatio n of its sharpest challenges.This

is followed by Four Steps to High Im pact E-mail Marketing, designed to help d ecision

makers surpass the challenges and achieve success.Throughout the report are examples

of b est-in-class e-m ail marketin g app roaches,in cludin g a case study from Skechers USA,Inc.

E-m ail Marketingas a Relat ionship Strategy

CONTENTS

Tracking th e Trend s:The Ongoing Prom iseof E-mail ...................................3

Case Study:Skeche rs USA, Inc..................5

Four Steps to High ImpactE-mail M arketing

1. Think CustomerExperience...........................6

2. Make Privacy Protectiona Part o f Your BrandProm ise................................7

3. Ensure RecipientsKno w You ............................8

4. Mea sure Imp act ................9

Con clu sio n ............................10

Tools and Resources..........11

Glo ssary .................................12

200 4 Carlson M arket ing Grou p. Pepp ers & Roger s Group is a Carlson M arket ing Grou p co mp any. All ri gh ts pr ot ect ed an d reser ved.

FOUR STEPSto High Imp act E-mail Marketing

1. THINK custom er experience

2. M AKE privacy protection apart of your brand prom ise

3. ENSURE recipients know you

4. M EASURE consumer impact


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3

E-mail M arketing as a Relationship Stra

WHITE PAPER2004

200 4 Carlson M arket ing Grou p. Pepp ers & Roger s Group is a Carlson M arket ing Grou p co mp any. All ri gh ts pr ot ecte d an d re served .

The e-mail story is one of rapid global adoption and fast-

emerging oppo rtuni t ies. Thoug h i t had existed for two

decades in no n-comm ercial forms, e-mail caught f ire in the

1990s to become a universally accepted communication

channel.The year 1995 marked the arrival of the electronic

age as the quantity of e-mails sent outnumbered written

po stal letters.

Adopt ion, along with th e inherent benefits of e-maillow

cost, ri f le-shot m essaging, greater eff iciency, measurabil i ty

and high response ratesenticed marketers to seize the

comm ercial opportun i t ies of the channel . Opport uni t ies

rose as e-mail became capable of reaching prospects and

custom ers wh erever, wh enever and in whatever form th e

recipient preferred,from PC to wireless device,HTML or text

format. Full of promise, e-mail marketing grew into a mu lti-

bi l l ion d ollar industry.

A changing e-m ail landscape

That prom ise is still there, bu t m arketers mu st address severalchallenges. The sheer volum e of offers in th e marketp lace is

one. The average U.S. consum er is hit b y rough ly one m illion

m arketing m essages per year across comm unication s med ia,or

about 2,750 each day.1 E-mail marketers must break through

the d in to comp ete for a share of the customers attention .

Alternative e-marketing technologies are also impacting

e-m ail. For in stance, RSS (Rich Site Sum m ary or Really Sim ple

Synd ication) allows users to retrieve m essages from com pa-

nies that provide in formation feeds. These feeds bypass

e-mail f il ters that can p revent content from being delivered.

Enablin g p ull instead o f pu sh techno logy, RSS allows users tosubscribe on ly to m essages they want . Expert s estim ate that

RSS is a year aw ay from m ainstream use.

The projected growth of Internet Service Providers (ISPs)

creating default settings to remove HTML ads from e-mail

new sletters must also b e considered.M icrosoft Ou tlook 2003,

for examp le, already op erates th is way. Unless users choose

oth erwise, any e-newsletters received will no t d isplay HTML

graphics.Along with eliminating an eye-catching advertising

medium,this will prohibit marketers from accurately measur-

ing the receipt o f HTML versions of th eir newsletters.

Arguably the greatest challenge facing e-mail marketers

to day is spam. Jup iter Research repo rts that t he average U.S.

online consumer received 3,920 unwanted commercial e-mail

messages (UCE) in 2003.2 This deluge has made the job of the

legitimate marketer more comp lex.In a stud y conducted b y the

Pew Internet & Am erican Life Project,60% of respon dent e-mail

users say spam h as redu ced th eir e-mail use in a sign ificant w ay

and 52% o f respon dent s say spam has made th em less trusting

of e-mail in general.3

Spam has in turn dr iven

regulat ion, most notab ly the

CAN-SPAM Act , which went

into effect on January 1, 2004.

The act has helped to slow

unscrupulous marketers by

regulating th e use of e-mail tosolicit con sum ers. But CAN-SPAM and th e e-mail m essage

deluge has made the job of the legitimate marketer more

complex.Compliance is costing companies valuable resources

in the forms of t ime,m oney and p ersonnel.New technologies

such as filters and b lacklists are making deliverability m ore

difficult. As the legislation takes hold w ithin th e marketing

departments of legitimate companies,spammers are skirting

regulation and finding new ways around anti-spam tech-

nologies,such as zombie spam and ph ishing.

Posing solutionsSom e believe a do-no t-e-mail registry is th e answer.Alth oug h

a registry w as called fo r by CAN-SPAM, a Jun e 2004 repor t b y

th e Federal Trade Com mission stated t hat a registry wo uld n ot

stop spam. In fact, conclud ed th e FTC,t he registry could lead to

more UCE as spammers could use it to capture new e-mail

addresses. Rather, emp hasized FTC Chairman Timo thy Muris,

send er authen tication system s are required for det errence.

3

Trackin g the Trends:The Ongoing Prom ise of E-m ail

Nucleus Researchfound that companieswill experience $ 1,934in lost produ ctivity peremployee in 200 4 dueto spam, which is overtwice the 2003 level.4


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WHITE PAPER2004


In l ine wi th the FTCs cal l , the push to solve spam has

broug ht a series of authent ication tools from the p rivate sec-

tor aimed at separating th e spamm ers from legit imate mail-

ers. Com panies are turning t o op en-p roposed Internet stan-

dards such as Sender Policy Framework (SPF) to commercial

solutions such as Microsoft Caller-ID (which is slated to

merge into SPF to create Sender-ID) and Yahoo!s

Dom ainKeys.By storing record s in t he Dom ain Name System

(DNS), th ese tools identify w heth er a server is perm itted t o

send e-mail for a particular do main. Recently,fo ur to p ISPs

Microsoft, America Online,Yahoo ! and EarthLink jo ined fo rces

to create common technical standards around authentica-

tion. Nevertheless, states the FTC, authentication solutions

may take two years or m ore to t ake hold.

Meanwhile, compliance costs and the persistence

of spam threaten to sap the productivi ty of legit imate

m arketers. Nucleus Research found that despite regulation and

spam -blocking t echnologies,com panies will experience $1,934

in lost p roductivity per employee in 2004 due to spam, more

than twice the 2003 level.4 Mo reover, Jup iter Research revealed

that t he cost of erron eously blocked e-mail (messages sent t o

recipients who have given permission to receive it) will reach

$419 mi l l ion in 2008, up f rom $230 mi l l ion in 2003.

Creating opport unity

While th ese challenges are steep, th ey also offer op po rtu nities.

As th e regu lation du st sett les,and ant i-spam t echnolo gy catch-

es up w ith d emand, savvy marketers can act on new strategiesfor using e-mail to augment custom er relationships.And e-mail

marketing show s no signs of slowing dow n. Jupiter Research

projects e-mail marketing spending to reach $6.1 billion in

2008, tripl ing the 2003 num ber. By identifying custom er-

focused, e-mail marketing strategies, marketers will be in a

strong position to capitalize on t he next p hase of e-mail oppor-

tun ity,using e-mail as a powerful relationship tool.

Wh at is CAN-SPAM ?

Cont rolling t he Assault of Non-Solicited Pornography and

Market ing Act , a lso known as CAN-SPAM, became

effective Jan. 1, 2004. It has several provisions to clearly

identify e-mail senders while giving recipients control

over receiving f utu re messages. Som e specifics of t he

federal law include:

Prohibit s using misleading from or subject headers

in e-m ail m essages.

Requires marketers to iden tify t heir ph ysical location

by including t heir postal address in the text of t he

e-mail m essage.

Requires an op t-out link in each m essage,w hich m ust

also give recipients the op tion of t elling senders to

stop all segmen ts of their m arketing campaigns.

Allows for suits to b e broug ht by ISPs, state atto rneys

general and t he federal governm ent.

Carries penalties of u p t o $250 per spamm ed e-mailmessage,w ith a cap of $2 million th at can be trip led

for aggravated violations.There is no cap on penalties

for e-mail sent w ith false or d eceptive h eaders.

Defend ants can also face up t o five years in pr ison.

150

200

250

300

2000 2001 2002 2003 2004 2005

E-M AIL ADVERTISING SPENDIN G IN THE U.S., 20 00 -200 5

(IN M ILLIONS)

Despite growing constraints facing e-mail marketing, companiescontinue to increase spending on e-m ail advertising, finding it avaluable customer relationship manag ement tool.

Source:eMarketer,April2004


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Skechers USA, Inc. prides itself on its young, hip l i festyle

brand. Known for i ts t rendy footwear, including oxfords,

sandals, sneakers and boot s, the Manhat tan Beach,

Calif.-based com pany sells pro du cts in departm ent, specialty

and outlet stores in more than 100 countries and via the

com pany s Web site.In 2004,e-mail market ing em erged as an

increasingly critical component of the Skechers business

model and brand promise by driving online sales as well as

retail store traffic.

E-mail marketing actually m atches with the b rand image

we are creating in t he m arketplace, says Geric Joh nson, th e

comp anys vice president o f direct marketing. That con-

sum er is Internet savvy and in to m odern form s of com mu ni-

cation.We felt a consum er would demand that a trusted andrelevant lifestyle brand must be considered a legitimate

source for apparel, so w e want to interact w ith consumers in

th e ways they p refer.

Building the Skechers brand

For Skechers, sim ply having an inform ational Web site w as

not sufficient enoug h to d ifferentiate the brand; e-mail mar-

keting actually became a brand statement.While we have

always had some basic form of e-mail com mu nication to con-

sum ers, i t became crit ical to ou r new business model w hen

we eliminated our catalog communication in the fal l of2001, explains Johnson.To continue grow ing business with-

out th e catalog,Skechers agg ressively emb raced e-m ail mar-

keting to d rive consumers to p urchase via the skechers.com

Web site or at retail stores.

Yet, Skechers existin g e-mail app lications and servers were

not adequate to support this growth mod el, fal l ing short of

serving consumer expectations.At the t ime, our in house e-

mail server would no t suppor t anything b ut a text m essage,

we h ad no camp aign analytics oth er than a tracking vehicle

that would allow Skechers to associate e-mail campaigns

somew hat t o an in crease in sales, says John son.I needed t o

know mo re information: How m any consumers were receiv-

ing, cl icking and op ening th e e-mails? What were they pu r-

chasing and wh at were th eir needs?

Beyond standard capab ilities;

beyond standard results

Skechers conclud ed it w as imp erative to upg rade e-mail mar-

keting to p rovide intel ligence and im prove commu nications

wi th th e consumer. The comp any chose RightNow

Technologies permission-based e-mail solution , RightNow

Outbo und. Skechers uses Outb ound with RightNow Service

to p rovide a consolidated view of all inboun d and out bou nd

consumer interactions.

Recognizing a need for a collaborative customer-focused

application t hat wo uld integrate Web service and out boun d

custom er com mu nicat ions, Skechers began i ts journey.

Johnson explains, In 2003, we emp loyed HTML, analytical

tracking and testing.These services wen t b eyond our existingin-house capabil i t ies. In Apri l 2004, we d ispatched ou r f irst

e-mail marketing camp aign, sent to 600,000 individuals.

The object ive of the campaign was to dr ive t raf f ic to

Skechers 125 retail stores as well as increase com m erce

throu gh th e site.

Johnson claims an impressive 25% open rate from the

camp aign. In addi t ion, the campaign was 25% more suc-

cessful in terms of resulting sales increases than the best

camp aign we conducted wi th our in-house appl icat ion, he

says.Today, Skechers permission-based datab ase of nam es

consist of more than 800,000 consumers registered atSkechers.com or collected at the point-of-purchase in retail

stores and subm itted via produ ct registration cards.

The secret to Skecherssuccess? E-mail marketin g com mu -

nications are meaningful and relevant, from a content, new

prod uct o r offer perspective, says Johnson.We cont inue to

make an effort to respon d to wh at custom ers want and need.

For us,e-m ail marketing is a true com pet itive advantage.

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WHITE PAPER2004

CASE STUDY: Skechers USA, Inc.

E-mail marketing actually matches with the

brand image we are creating in the m arketplace.

Geric Johnson, Vice President of Direct Market ing

Skechers, USA, Inc.


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WHITE PAPER2004


Comp anies comm it ted to prof i tably get t ing, keeping and

grow ing customer relationships are moving b eyond regulatory

comp liance and using e-mail more p roactively.E-mail market-

ing remains a very effective tool for cultivating profitable and

loyal relation ships, says Mart ha Rog ers, Ph.D., foun ding part ner,

Peppers & Rogers Group.It is imperative,however,that compa-

nies integrate e-mail marketing efforts within t he context of an

overall customer strategy that interacts with a customer how

and w hen t hat custom er prefers.The Four Steps to High -Impact

E-mail Marketingp rovides com panies with actionable insight

from strategy and execution, to m easurement and results to

raise e-mail cam paign s to t he relationship strategy level.

Step #1 : Think Customer Experience

When used to imp rove the custom er experience rather th an

strictly as a sales too l, e-mail becom es part o f a larger

relat ionship-bui lding plan. In tod ays regulatory c l imate,

e-mai l market ing ini t iat ives must be predicated upon

know ing the custom er base and com mu nicating w ith tho se

customers in a credible way that sustains their interest.

Sending out a large num ber of campaigns witho ut consider-

ing it s imp act on customer relationships,does not g uarantee

higher response rates. While i t m ay produce a short-term

lift, i t w il l more l ikely alienate recipients and weaken the

customer experience.

6

Key Steps to High Im pact E-m ail Marketing

1. GATHER CUSTOMER DATA(both internal and external)

Contact inform ation

Offer,interaction and privacy preferences

Purchasing behavio r

Custom er interaction history

2. DERIVE CUSTOM ER INSIGHT Custom er needs

Custom er value

Custom er feedback

Offers or products customer

will n eed next

3. SUGGEST PROACTIVE ACTION Ensure robust privacy prot ection policies

Develop customized e-mail m arketing campaign sbased on customer n eeds

Refine campaign s based on results and custom er insight

Train m arketing and sales staff o n the value of ap plyingcustomer insight

Report ing & Feedback

Decision-support

Analysis Action

High-impact e-mail marketing relies on leveraging customer insights throughout the e-mail marketingcampaign lifecycle. By applying customer-focused approaches to e-ma il marketing, companies can bett ergenerat e the positive customer experien ces driven by long-ter m, loyal relationships.

4. EVALUATE RESPON SE

Track click-throug h and open rates

Pilot campaign s to test

custom ized content versions

Test content-to-promotion ratio

Elicit direct customer feedback

Gauge level of custom er engagement

CUSTOM ER INSIGHT D RIVES E-MAIL M ARKETING ACTION


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WHITE PAPER2004

Effectively managin g a custom ers experience an ind ivid-

uals total interactions with a brandrequires integration and

relevance. Ideally, marketin g, sales and service shou ld operate

from a central customer profile and use integrated business

rules to m anage custom er interactions. From here, e-mail mar-

keting camp aigns would reflect an individuals most up-to-date

preferences and relevant offers.

While personalization techniques have improved e-mails

relevancy for recipients, mo st campaigns have not m oved

beyond identifying the recipient by name and making an

offer b ased o n a t ransaction analysis. Raising th e relevancy

bar m eans custom izing e-mail campaign cont ent b ased on

an ind ividuals expressed n eeds. Understanding custom er

needs drives insight int o w hy the custom er buys, not just

wh at she bu ys. E-mail can then become m ore relevant in

term s of tim eliness and target ed offers to t he recipient.

When ut i l ized prop erly, e-mail strength ens the custom er

experience and acts as a catalyst for ongoing customer

interaction. In this way, e-mail marketing campaigns act not

only as sales tools, but as building blocks of more p rofi table

and lasting relationships.

Step #2 :

M ake Privacy Protection a Part of Your Brand PromiseThe most valuable representatives of a firms brand are the

prospects and custom ers wit h wh om a comp any interacts. A

recent b enchmark stud y conducted by th e Ponem on Institu te

found that o nly 36% of m ajor U.S.corpo rations view p rivacy as

an impor tant part of th e com panys brand image.When tied to

privacy protection ,b rand can become synonym ous with trust.

As trust increases,custom ers will share mo re inform ation w ith

a companyinformation that comp etitors do n ot h ave.

Most companies know that permission marketing is a neces-

sary and valuable first step, bu t add itional practices are required

to tie privacy protection to brand. Respon sible Inform ationStewardship (RIS) is a more comprehensive organizational

approach to m ove beyond com pliance and treat privacy, infor-

mation security and data protection as an op portu nity to b uild

the trusted relationships that increase revenue,red uce costs and

strength en brand . RIS guid elines ensure that a comp anys infor-

mation use and handling p ractices are aligned w ith b oth busi-

ness goals and w ith t he preferences of consum ers, emp loyees,

investors and business partners.The key practice elements of RIS

are process management, education and training, mo nitoring,

comm unications to emp loyees and custom ers,and enforcement.

Given consum ers sensitivity to spam and tod ays regulatory

environm ent,p rivacy protection and e-mail m arketing initiatives

mu st go hand in h and. Comp anies can use this advantage to

uncover the needs of prospects and customers to create more

prod uctive e-mail camp aigns. Specific marketing standards can

be aligned w ith RIS principles to provid e a framewo rk from w hich

to d esign e-mail marketing campaign s.These include:

Refusing to share custom ers inform ation w itho ut first

receiving exp ress consent.

Raising emp loyee awareness of regulation s aroun d

privacy prot ection as well as all com pany p olicies th at

go above and b eyond comp liance.

Collecting t he privacy preferences of ind ividu al

custom ers and m aking t ho se preferences available

across the marketing d epartment .

Providin g custom ers access to t he inform ation

the comp any has about th em.


7

Black & Decker b uilds wisely

To boost custom er acquisition and retention, hom e

improvement product manufacturer Black & Decker

saw an opportunity to communicate directly with

consum ers,rather than o nly throu gh it s retail product

distr ibution netw ork. With i ts targeting and cus-

tom ization ability,high response rates and lower cost,

Black & Decker chose e-mail to com m unicate it s core

brand values and build custom er loyalty.

The com pany designed a phased e-mail m arketing

program that began with a database acquisition

initiative, targeting relevant profile groups b ased on

seven key questions abou t th eir do-it -yourself habit s

and where they lived.The campaign resulted in click-through rates of 27%, with more than 90% of those

users that clicked t hrough completing the q uestion-

naire. Users that opted into the e-mail subscription

were then categorized according to their do -it-your-

self expertise and a schedule of com m unication s was

customized for each target group.5


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Posting a clear privacy protectio n po licy regardin g th e

use of inform ation across channels,includ ing e-m ail.

Regularly audit ing p rivacy policies against internal

bu siness pro cesses in add ition to m arket standards.

Opt-in a s a way o f life

With RIS prin ciples in hand ,t he first step in creatin g any e-mail

marketing strategy is building a responsive opt-in database.

Enterprises that have been successful in building opt-in data-

bases often rely on a com bination of tactics. Best p ractices

include:

Leveraging existing marketing programs to let

prospects and customers know about the valuable

information you r comp any wants to share.

Avoiding b uying l ists that claim to be opt -in. True

perm ission-b ased lists are difficult and expensive to

develop and maintain,t herefore they are mu ch too

valuable to sell.

Including a link to you r Web sites registration p age

with in e-mail marketing comm unications.

Using other channels trade shows, sales force, etc.

to d irect peop le to you r Web sites registration p age.

Providin g clear instruct ions to m ake it easy forindividuals to opt -in as well as opt -out.

When an individual opts-in, request a l imited num ber of

dem ograp hic qu estion s as well as a needs-based survey

to g auge individuals buying or usage m otivations.Ask

how frequently they w ant to receive e-mail marketing

communications.

Processing bo th h ard and soft b oun ces after each

camp aign to keep your op t-in l ist clean.

Step #3 : Ensure Your Recipien ts Know You

It used to b e that a m arketer could create an e-mail camp aign,personalize the message and press send,fairly confident that

mo st m essages wo uld reach th e intend ed recipients. Today,

these tactics are not enoug h t o d rive impact.Given consumers

frustration wit h m essaging and the rise of spam-filtering tech-

nolog y, increasing the odd s of recipients receiving, open ing

and acting on your e-mails has never been more imp ortant .

Accordin g to Forrester Research o n wh y U.S. online hou se-

hold s open m arketing e-m ails,52% of survey respo nden ts say

they open e-mails because they recognize the sender.6 Over

time,a trusted and profitable customer relationship can then

becom e a m arketers most effective ally in in creasing e-mail

campaign deliverability and respo nse.

Key basic deliverability practices include creating a uni-

form from l ine to guarantee

easy recipient recogni t ion

and identifying a process and

platform to deliver e-mails in

a consistent form at. Working

pro actively wit h ISPs to follow

white-listing policies and cre-

ating reverse name domain

system s goes above basic requirem ents to ensure th at w hat

get s sent reaches th e app rop riate inbox.


WHITE PAPER2004

According to a recentForrester Researchstudy, 52% of surveyrespondents saythey open e-mailsbecause theyrecognize the sender.6

FACTORS THAT D RIVE U.S. ON LINE HOU SEHO LDS

TO OPEN M ARKETING E-M AILS, 200 2 & 2 003

(AS A % OF RESPONDENTS)

2002 200

Recognit ion and Relevance

I recognize the sender: 50% 52%E-m ail fro m a co mp an y I ag reed t o g et e-m ail fro m : 52% 50%

E-m ail about a product Im interested in: 49% 40%

Som ething friends or fam ily m ight like: 23% 26%

Delivery

E-m ail received at hom e: 24% 18%

E-m ail received at work: 11% 18%

I get it first th ing in the m orning: 6% 6%

I get it during lunch or dow n t im e at work/ school: 5% 4%

Subject Line

The sub ject line includes a prom ot ion: 21% 11%

If the sub ject l ine i s personal ized to include my name : 12% 9%

If the subject line is clever or am using: 12% 8%

If the subject line contains the word free: 13% 7%

Sender recognition an d relevance,more than enticing subject linespromotions,m otivate customers to open e-mails from m arketers.

Source:Forrester Research, Ma rch 2004

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Step #4 : Measure Impact

Consider this:While a 10% click-through rate is strong,what

about t he 90% who did n ot respond? Performance metrics

such as open and click-through rates or direct revenue will

remain valuable to ols for measuring campaign effectiveness.

But as e-mail is t ied fu rther t o relationship strategy, mar-

keters m ust ask new q uestions to gaug e cam paign effective-

ness:Ho w relevant w as th e cam paigns cont ent t o recipients

needs? Was it targeted at prospects or customers offering

the highest value? Did i t enhance or di lute brand?

Strength en or weaken the custom er experience?

Fresh qualitative measurement practices will help mar-

keters answer these questions. Som e sug gested best prac-

tices include pi loting and testing. Over t ime, the company

can benchm ark perform ance to ensure e-mail camp aigns are

meeting custom er needs and providing a posit ive custom er

experience consistent with

other channels.

The best way to determ ine

i f campaigns are meet ing

custom ersn eeds is to ask th e

custom ers d i rect l y. From

there, ref inement o f fu turecampaigns can take place.

A f irst step i s p i lo t ing the

cam p aig n s t o g au g e h ow

well the customized content with in th e e-mails is matching

up with recipients needs and preferences. Testing the con-

tent -to-promot ion rat io i s another example.D id the e-mai l

contain too m uch of a hard sell? Did the cont ent provide t an-

gible value to the recipient in addit ion to t he offer? Anoth er

valuable practice is creating feedback loops. Some firms

regularly convene a test grou p of customers to act as an

advisory board for th eir e-mail marketin g strategy. By elicit-ing d irect feedback, marketers can mo re confid ently assess

the im pact of ind ividual camp aigns on valuable custom ers

and refine futu re efforts.

In an increasingly pragmatic world, comp anies mu st

understand how to assess the return on investment from

managing t he custom er experience through e-mail market-

ing. These metrics wil l depend on a companys business

mo del, organizational characteristics, the channel in w hich

the customer is having t he experience,etc. In some com pa-

nies,these areas are already calculated. Collectively,how ever,

they contribu te to g auging t he effectiveness of how a com -

pany is delivering against the customer experience in the

context of prod uct, people and process.The impo rtant th ing

is to set m etrics and m easure over tim e.



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TheStreet.com:M ore th an p ressing send

With 16 subscription-based e-mail produ cts and

one million e-mail subscribers,financial-services

content provider TheStreet.com depends on

content relevance and deliverability as a core

comp onent o f its business m odel.

Its new sletter,RealMon ey, allow s subscribers

to view content according to a subscribers

investment style:Investor,Trader or Standard.

Addit ionally, the organization established a

comprehensive set of approaches to ensure

deliverability:

Main tains relation ships wit h key ISPs and

follow s white-listing policies.

Insists t hat subscribers add TheStreet.coms

from address to their add ress books.

Sets up a reverse name d om ain system

so ISPs can recognize the sender.

Creates feedb ack loops w ith AOL,so

if an A OL sub scriber clicks on AOLs spam

butt on, that subscriber is imm ediately

removed from the list.

Honors opt -out requests in th ree days.

Has written CAN-SPAM requirements

distributed to advertisers.7

By eliciting direct

feedback,marketers

can more confident ly

assess the imp act

of individual campaigns

on valuable custom ers

and refine futureefforts accordingly.

9


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ConclusionThe prom ise of e-mail m arketing remains stron g.To capitalize

on t his opport uni ty, marketers must adapt to a shi f t ing

e-mail landscape. New e-marketing technologies, consum er

frustration over spam and regulation are forcing decision

m akers to re-evaluate how th eir e-mail camp aigns are creat-

ed,d eployed and m easured.

The solution is to ful ly incorporate e-mail into a custom er

relationship strategy. Similar to a cal l center, Web site, or

direct mail camp aign, e-mail is a tool for managing the cus-

tomer experience and cult ivating profi table relationships

w ith in divid ual custom ers.By craftin g clear,strategic decision

criteria aroun d custom er needs, marketers can ensure that

e-mail campaigns are not o nly effective on a camp aign-by-

camp aign b asis,b ut also building a custom er relationship.

Peppers & Rogers Groups Four Steps to High Impact

E-mail Marketing detai led in t his report provide the g uide-

l ines for making t his a reali ty. To bring tog ether e-mail

marketing and relationship strategy, comp anies mu st: Think

custom er experience;Make privacy protection a part of their

brand promise; Ensure thei r recipients know them ; and

m easure imp act.As marketers apply th ese guidelines to their

com pany s e-mail practices and camp aigns,th e results will b e

h igher camp aign p er formance, st ronger brand and an

imp roved customer experience.

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Peppers & Rog ers GroupPepp ers & Rog ers Group is a m anagem ent con sulting firm ,rec-ogn ized as the w orlds leading authority on custom er-basedbusiness strategy. Found ed in 1993 by Do n Pepp ers andMartha Rogers Ph.D.,th e firm is dedicated to helping comp a-nies grow th e value of their business by growing the value oftheir custom er base. With expertise th at cuts across verticalindust r ies, our par tners, consul tants and subject mat terexperts have a deep understanding of the most powerfulvalue levers that drive business results.Our goal is to developand execute strategies that create im med iate return on invest-ment and long-term custom er value.

Led by 1to1Magazine,Peppers & Rogers Groups ind epend entmedia division reaches 250,000 readers weekly with the latesttrends,insights and b est practices driving custom er strategy.

Peppers & Rogers Group is a Carlson Marketing GroupCom pany,headquartered in Norw alk,Conn.The firm has a totalof 14 offices on six cont inent s.

For m ore informatio n visit: www.1to1.com

Right Now Techn olog iesRightNow Technologies is the leading on demand CRM com-pany focused on customer service and e-mail marketing.RightNow improves operational effectiveness with easy-to-implem ent t echnology, replicable best practices drawn fromthe industry's broadest base of successful implementations,and engagement terms that create accountability for deliver-ing q uantifiable results.

RightNow has delivered these benefits to more than 1,000custom ers wo rldw ide such as: Air New Zealand, Ben & Jerry's,Briggs and Stratto n, British Airw ays, Cisco, Dolby Laboratories,Inc ., Pioneer, Raymar ine, Reming ton , Sanyo, Special izedBicycles and m ore than 150 pub lic sector clients including t heSocial Security Adm inistration and the State of Florida.

Foun ded in 1997,Right Now has offices in Bozeman, Dallas,San M ateo,New Jersey,Lond on, Sydney an d Tokyo.RightNo w'sprod ucts are available in 13 langu ages wo rldw ide.

For m ore inform ation visit: www.rightnow.com

1John Hagel and Marc Singer,Private Lives,M cKinsey Quarterly 2000.2Jup iter Research,March 18,2004.3Pew Internet & Am erican Life Project,Spam:How it is hur ting e-mail anddegrading life on the Internet, October 22,2003.4Nucleu s Research,Spam :The Serial ROI Killer,June 8, 2003.Based o n a survey of em ployees at Fort une 500 com panies.

5Marketing Week,February 26,20046Forrester Research,Factors that Drive U.S.Online Households to OpenMarketing E-mails,2002 & 2003 (as a % of respon dent s),M arch 2004.7Direct,February 1,2004.


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WEB SITES

Pepp ers & Rog ers Grou pwww.1to1.com

eMarketerwww.emarketer.com

Forrester Researchwww.forrester.com

Federal Trade Comm issionwww.ftc.gov

MarketingVoxwww.marketingvox.com

ClickZ Netw ork: Solut ions for Marketerswww.clickz.com

Direct Marketin g Association

www.the-dma.org

Association for Interactive Marketin gwww.interactivehq.com

Marketing Sherpawww.marketingsherpa.com

Iconocastwww.iconocast.com

Wiredwww.wired.com

DM Newswww.dmnews.com

Virtual Insti tut e of Informationwww.vii.org

ORGANIZATIONS

Association for Interactive M edia (AIM)1430 Broadw ay, 8 th f loorNew York,NY 10018888-337-0008www.interactivehq.org

Federal Trade Comm ission600 Pennsylvania Avenue,N.W.,Washington,D.C.20580202-326-2222www.ftc.gov

Instit ute fo r Spam and Intern et Public Policywww.isipp.com

The Direct M arketing Association (DMA)1120 Avenu e of the Am ericasNew York,NY 10036(212) 768-7277

www.the-dma.org

REFERENCED REPORTS

Spam : How it is Hurting Email and DegradingLife on t he Internet.Octob er 2003,Pew Int ernet and Am erican Life Project

The Consumer Advertising Backlash.May 20 04, Forrester Research

The Stat e of E-m ail M arketing 2004.March 2004,Forrester Research

E-mail Marketing:Challenges and Opportunities.June 2004,emarketer

Spam : The Serial ROI Killer.Jun e 2003, Nucleu s Research

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Tools and ResourcesThe fol lowing l ist o f Web sites,o rganizations and reports wil l help p rovides a wealth of information on trendsand innovation on e-mail marketing,spam and related t opics:


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GlossaryConfirmed Opt-in A user has elected to receive e-mail

new sletters or stand alone comm ercial messages.A confirm a-

tion e-mail is sent, but the user is not required to take furth er

action in order to be included o n th e l ist.The confirmation e-

mail includes the opp ortun ity to remo ve their subscription.

Customer Experience The totality of a customers interac-

tions w ith a brands product, people and processes over t im e.

A companys most important non-replicable asset is its cus-

tom ers, so cult ivating t hat asset for results requires careful

management , just as a f irm w ould manage its capital invest-

men ts.Effective Custom er Experience M anagem ent (CEM) is

based o n fo ur p i l lars: Facil i tate consistent interact ions;

Integrate across channels; Create a relevant experience;

Cultivate custom er trust.

DNS (Domain Name System (or Service or Server)): an

Internet service that t ranslates domain names into IP

addresses. Because domain names are alphabetic, they're

easier to remember.The Internet however,is really based on

IP addresses. Every tim e you use a dom ain name, th erefore,a

DNS service must translate the name into th e correspo nd ing

IP address.

Double Opt-in A user has elected t o receive e-mail new slet-

ters or stand alone comm ercial messages. A confirmat ion e-

mail is sent t o th e user to w hich she mu st reply before th e list

own er may add t hem t o the l ist.

HTML (HyperText Markup Language): the authoring lan-

guage used to create documents on the World Wide Web.

HTML defines the structure and layout of a Web do cument by

using a variety of tags and attribu tes

Opt-in A user has actively elected to receive e-m ail newslet-

ters or stand alone com mercial messages by checking an opt -

in box. No confirmation e-mail is sent and the user is notrequired to take further action to b e included on th e l ist.

Opt-out A user must request no t to be included on an e-mail list

at the p oint o f collection or w ith subsequent comm unications.

Phishing Pronoun ced f ishing, the act o f sending an e-mail

to a user claiming falsely to be an established legitimate

enterprise in an attem pt to scam the u ser into surrendering

private information that w il l be used for identity t heft.

Responsible Inform ation Stewardship (RIS) The pro cess of

engendering t rust and confidence in how an organizations

leaders,em ployees and agent s m anage private,sensitive and

confidential information. It involves the alignm ent of stake-

holder informat ion preferencessuch as consumers,

employees, shareholders and th e general publicw ith b usi-ness,data and technology management practices across the

organization.

RSS (Rich Site Summ ary or Really Simple Syndication): an

XML format for syndicating Web content . A Web site that

wants to al low oth er sites to pub lish some o f i ts content cre-

ates an RSS document and registers the document with an

RSS publisher. A u ser t hat can read RSS-distribut ed cont ent

can u se the cont ent o n a d ifferent site. Syndicated content

includ es such data as new s feeds, events listing s, new s sto -

ries, headlines, project upd ates, excerpts from discussion

forums or even corporate information.

Spam Unsolicited commercial electronic mail or junk news-

grou p p osting s. Real spam is generally e-mail advert ising fo r

som e produ ct sent t o a mail ing l ist or n ewsgroup.

Spim Also spelled as spIM,spam over instant messaging (IM).

Spim is perp etuated by b ots that h arvest IM screen names off

of th e Internet and simulate a human u ser by sending spam

to the screen names via an instant message.The spim typi-

cally contains a link to a Web site that the spimmer is trying

to market.

Unsolicited Commercial E-Mail (UCE) See spam .

Source:Webopedia, Association for Interactive Mar keting

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