While e-mail marketers continue to wrestle with important, practical issues such as how often to contact customers, which customer segments should receive particular messages and how to make those messages as relevant as possible, they are now faced with an entirely new set of challenges brought on by mobile technology and the growing popularity of social networking.
Senior Reporter Carol Krol hosted a roundtable with three b-to-b e-mail experts—Christine Buscarino, director of online marketing for Office Depot; Daryl Nielson, commercial e-mail marketing manager, TSG Customer Communications at Hewlett-Packard Co.; and Brian Ellefritz, senior manager-global direct marketing at Cisco Systems—to discuss how these issues affect marketers and what they are doing to respond to the changes. The following is an edited transcript of the conversation.
BtoB: What are the big challenges you are facing in e-mail marketing?
Understanding the best frequency and the reach to the customer is something we're really thinking a lot about. We realize that relevancy in messaging is extremely important, but what is the threshold of weekly touches that you can make to a customer without being looked at as over-mailing? You have to be really good at your e-mail segmentation, at understanding what your customers will respond to and, ultimately, what they are really looking for from you.
As we get more targeted and more segmented, we are finding that e-mail governance becomes increasingly challenging as we deal with smaller and smaller populations of the database. We have an increasing number of internal dilemmas about who gets to market to any given population when. It's all in the same quest to become more targeted and relevant. We have a number of different programs targeted at different kinds of individuals. In the old days when we used to just unleash the hounds and everybody got to talk to everybody, we knew we were creating bad experiences, but at least we didn't argue amongst each other. We just made bad experiences for customers. Now, when we are trying to make great experiences, we have internal conflict.
The area we are struggling with right now is the cost of personalization. We have good processes and methods in place to do the personalization, but what is that breaking point when you get too personalized, where it's costing you more to do that? The other area we are struggling internally with is, “What is it the customer wants to hear versus what does the product line want to tell the customer?” The product groups are saying, “Tell everybody about storage, or tell everybody about servers or tell everybody about our PCs.” And we say, “Can we talk about what it means to the customer?” It's an arm wrestle that we are having. We are trying to represent the voice of the customer, and the business units are trying to meet their bottom line.
BtoB: What are the trends in e-mail marketing?
Our customers are becoming a lot more mobile. It's important to be able to get the relevant message to them quickly and in the fashion that's best for them —whether it's through their BlackBerry, or their mobile phone or their desktop computer. Traditional e-mail can become very lengthy. We try as retailers to get a lot of information in front of them.
As you start adapting your messaging and your marketing to different devices, you have to make sure for that mobile customer—who obviously doesn't have the time or doesn't have the access to their computer—that that message is conveyed and is relevant to them, and it's ultimately accessible for them. That lengthy e-mail can't be 15 to 20 offers anymore. It has to be an offer that's relevant to them and something that can be read through their BlackBerry or through their mobile phone.
We think there are opportunities in the tech area where people want answers and want people's opinions on products and solutions out there, and that's where they tend to go rather than the vendor doing that. They're using social networks. [It] will be a big issue that we will have to address, and that will probably come up this year. We will have to figure out how to do it and then address it in 2009.
BtoB: How does e-mail fit into that? Is e-mail going to drive them to social networks?
E-mail will drive them to it. And if they wanted information—like if they subscribed to that forum and they wanted that information sent to them—then [e-mail] would be a place they could get that. Instead of having to go out on the forum and look at it, they can maybe get the e-mail sent to them.
BtoB: Akin to an RSS feed?
I was sitting down with my daughter this weekend, and I said, “Help me with Facebook.” She demonstrated that when she is in Facebook with her friends, she does not use her e-mail inbox at all. All the collaboration and dialogue with her community doesn't happen within the e-mail client. It happens within another set of tools.
One of the things for us to grapple with is as communities get built around similar tools online, once people drop into a dialogue and they are willing to share among other people wrestling with the problem, this kind of crosses the boundaries of marketing scenarios versus sales and service scenarios. There will be other kinds of collaboration tools used. One of the things that we are very mindful of this coming year is what is e-mail's—our traditional view of e-mail's—role in the mix of tools that people are using to discover, dialogue, ask questions, get answers and respond.
BtoB: Are benchmarks helpful to you in e-mail marketing?
We do value benchmarks highly, but we tend to lean on very specific benchmarks that are very close either to our industry or ones developed within our own company. The broader you go, where you just look at a b-to-b number for response rates, for instance, out of the Direct Marketing Association, those tend not to be as targeted and helpful.
I would agree that we really look at our industry more specifically versus universal benchmarks to try to gauge our customers' level of interest versus what the masses that use e-mail are seeing in their results. What's really more important to us is our internal customer experience measures. If what we are hearing from our customers is they are happy and enjoying the features and the benefits that they are getting from Office Depot, that to us is more important than what somebody in the industry's results may be. It's more about customer experience versus industry benchmarks when it comes to more mature programs like e-mail.
One of things that we are starting to do is look at the types of e-mails that our competitors are sending out to customers so we can gauge that and see what types of offers they are doing. That's an area that we are looking into this year. It's going to be one of our key measurements. We've typically done it about once a year, but now we are going to do it monthly.
BtoB: How does your mobile strategy differ from or integrate with your e-mail strategy? Do you have a separate strategy when it comes to sending e-mail to mobile devices?
Long term, our e-mail and our mobile strategies will be quite different. We are using text messaging basically for introduction of new products and offers. We do a lot of mobile marketing for sweepstakes and prize reminders for our most recent gift of the day sweepstakes. Over the next year you will start to see it become more of a business tool where it could potentially allow a customer to know when their order is ready or the availability of a product or a price drop.
BtoB: Are you doing that through e-mail or are you actually getting the cell phone number of your current customer?
We are collecting mobile phone numbers through an opt-in separately from e-mail. Mobile rules are pretty strict. You must collect an opt-in along with the phone number versus not having an opt-out on file for e-mail. So we are being very cautious. We don't want to become a spammer, whether it's e-mail or mobile. A lot of services charge you for text messaging. I don't think it's fair to the mobile phone user if they get text messaging that they never asked for.
We just started an SMS opt-in service. Our early queries of customers showed a pretty lukewarm receptivity. What's probably going to expand their interest is the emergence now of smartphones, and creating a platform where you can render HTML, or near-HTML, kinds of messages and you are not limited to the SMS kind of style. We are starting to expand experimentation with messages that render well on mobile devices, but we have been not very focused on that to date.
BtoB: What are some specific examples of things you have done with e-mail marketing that have been particularly successful?
We have a very large sales force out there that meets with some of our larger enterprise customers. One of the things that we heard was the sales force wanted to leverage e-mail but didn't know how to go about it. We listened to the things that the sales force wanted to tell the customer. Was it a follow-up to a new customer visit? The status of a pending conversation? The status of an order? Placing an order?
We built them a tool that Office Depot controls so that we in marketing can control the overall shell of the message, the overall branding of the e-mail, but give the reps the capabilities to personalize it and put in some messaging that's relevant to the customer. We made it plug and play for the sales reps so that they could actually send a relevant message and deploy it themselves rather than waiting on a marketing group to send it. We are seeing some success there. I think at the most basic level it is about understanding how to use different channels your customers shop in—our customers shop at retail, they shop online, they shop through the call center, they shop through telephone account managers—and then building a customized segmentation approach that meets all those needs and speaks to all those customers in a different way, and then also takes into account those that shop in all of those channels and sending them relevant messaging.
We have done [similar] pilots with sales. We have seen some tremendous ROI with that. We have been successful at acquiring customers' names through the support process and then offering what we call our “e-alerts process.” We have done that over time and have been getting more and more names through the call centers.
We launched a program called Innovators, which is essentially a newsletter-based relationship marketing program, an e-newsletter that goes out to the small-and-medium business segment. We really had to work hard at making this the kind of program that could scale and manage itself in very different ways as it moves around the globe but still give us a common brand, a common set of messages and delivery of offers. I think in the simplest form, the way this appears to customers in smaller countries is as a monthly, or bimonthly or even a quarterly newsletter.
At corporate, we build a standard editorial calendar and a standard set of good quality content and offers. We distribute that out to the globe to each one of the countries or regions. In some countries where let's say they have a good online events program, they may tie that to the program and make that one of the entitlements about being in the program and use it as an acquisition tool. In other places they just use it as branding air cover because they have a decent database, but they don't really have a way to create good quality content every month. In the U.S., this thing appears like a very robust, multi- dimensional tool. In Belgium it might be a quarterly newsletter.
BtoB: What are the big opportunities in the b-to-b e-mail marketing space that you would like to take advantage of in the next six to 12 months.
With the overwhelming sentiment that the customer is in charge of the brand, we've got to build a new level of responsiveness and responsibility into our e-mail program if we are going to maintain a positive outlook from our customers and our prospects. This is creating a new amount of rigor around e-mail about being very service-oriented in our programs, and our deliverables and our messages, and realizing that if we don't do that in the long term, we are going to lose the opportunity to keep talking to these people. I think it's a huge challenge for us because it is going to be more investment, and it's going to be more difficult to manage. But I think it's also a huge opportunity because the people that get this right will have new opportunities to talk to their customers.
I think the job gets harder as the space gets more and more crowded and there is more communication, there is more information, and I think we have to get better at it. If we just keep status quo, then we are going to fall behind.
I keep on focusing on relevancy of messaging, but it's also making sure that the messaging is consistent across media. If the customer receives direct mail, if they receive a catalog, if they receive an e-mail, it's not a new message that they have received from Office Depot three different times. It's a relevant message, and they are consistent with each other. It's about becoming smarter about your messaging across your channels and the messaging that's ultimately important to your customers and gets them excited about your brand.
BtoB: What about spam and deliverability? What are the current challenges?
It's not an issue for us. We've got a great legal team that watches out for anybody taking advantage of us and looks at our strategies [to ensure] they are in line with what the regulations are, and we don't typically see any problem. On deliverability, we work very closely with our e-mail service provider to make sure that our e-mails are getting [to the recipient]. We have a very large e-mail base and we typically don't see large fluctuations in deliverability issues from week to week. If there is an issue, we are on it.
Deliverability is not really a problem. I think the critical factor for deliverability is your list hygiene and taking those bounces off and so forth.
We've done a pretty good job of managing our business practices, managing our lists, managing our infrastructure, and the brand has a good solid reputation out there. We kind of came late to monitoring our deliverability. We were delighted to see that it was really high when we took a look at it, and it maintains that status. So that's really not a big concern. I don't worry so much about spam causing our reputation to diminish. I worry a lot about whether people who legitimately don't want to receive our e-mail have a good, easy, legitimate way to indicate that to us. M