E-mail is a powerful tool for successful customer relationship marketing, but marketers for the most part continue to shy away from using it as an acquisition tool. That was among the conclusions drawn by a panel of marketers that BtoB assembled for a roundtable discussion about e-mail marketing during the Direct Marketing Associationâs Direct Marketing to Business conference last month in Lake Buena Vista, Fla.
Participating in the discussion were: Rachel Beard, manager of industry and direct marketing at Lexmark International; David Hughes, manager of database marketing at Canon U.S.A.; Steve Penn, CEO and executive creative director of direct marketing agency Penn Garritano; and Seth Romanow, director of worldwide analytics at Hewlett-Packard Co.
BtoB: Has your e-mail marketing budget, your spending plan, grown for this year? If so, by how much compared with last year?
Hughes: Ours is flat, and the reason that itâs flat is because we have an integrated on- and offline communications strategy. Weâre not using it for acquisition, so itâs part of an ongoing series of communications that are prebilled.
Beard: We are in the same boat. It was flat to negligibly up, so the intent was to try to get really surgical about how we are using it, to make sure we are deploying in the right places and to the right people with the right content as opposed to making it bigger.
Penn: [For my clients] itâs probably flat to maybe up a little bit, depending. Weâve seen good uses of it, for example, to drive a registration to Webinars in business-to-business situations. But I donât believe that e-mail is direct mail online like some folks have been saying for a long time. I just donât buy that.
BtoB: Whatâs the difference?
Penn: [Direct mail] works. Itâs tactile. Itâs an experience. Itâs something that you can spend some time with. Yes, itâs invasive, but if itâs done properly it is something that has a much greater impact. E-mail is often seen as just a pest.
Romanow: Iâm in the analytics area so I donât often look at the budget surrounding e-mail. I canât tell you whether weâve gone up or down in terms of budgets. I can tell you that weâve been looking at it much more judiciously.
BtoB: How are you using e-mail as a marketing tool?
Romanow: We use it to establish a relationship with a customer or prospect. There is a significant amount of prospecting that is done as well.
Penn: Weâve had actually some pretty good luck with Webinars. Weâve used both direct mail and e-mail to drive traffic. Itâs so much easier in e-mail to click and get your registration page, sign up and youâre done. We have experimented with pre- and post-direct mail. Post-direct mail e-mail is the one that gets the most registration because thatâs when people finally decide. Itâs a last-minute urgency purchase. We donât use it in acquisition.
Hughes: We try to use our database to the extent possible to engage customers with content that is very directed to their needs. Very rarely is it to sell something. It is more often to ensure that theyâre maximizing a product that they have already purchased.
Beard: We are rarely using it as a prospecting tool. It is [used] once we have had some level of engagement with an existing customer or a prospect.
Romanow: Newsletters are a powerful vehicle for us because customers actually pick what kind of content theyâd like. The open rate for newsletters is exceptionally high because people have chosen the kinds of information that they want to see.
BtoB: Spam continues to pose a big problem for marketers. Are you using e-mail right now or has spam forced you to stop?
Beard: Weâve had a conservative approach from the beginning. It really hasnât caused us to change that much.
Penn: Business-to-business marketers are a little bit ahead of the curve and naturally tend to be conservative in their use of e-mail. Weâre doing one-to-one communications.
Beard: For us itâs an opt-in. Then, itâs about looking at the people who ask for us to communicate to them [by e-mail] and making sure that we actually have relevant things to deliver to them.
Hughes: Weâre dealing with customers where you have a long-term relationship with a never-ending sales cycle thatâs at one stage or another. If you look at the lifetime value of the relationship, the cost of that customer deciding nowâbased on oversaturation of communicationâto opt out of all future communication is tragic. So we err on the side of being conservative.
BtoB: Do you think legislation is going to solve the spam problem?
Penn: So much of the true spam is offshore [that] we could legislate until weâre blue in the face and weâre not going to shut that down. I think that where we benefit as business-to-business marketers is that, particularly with customers where we have a relationship, itâs much less likely that customers â¦ are going to regard your message as spam.
Hughes: Itâs virtually impossible to regulate spam. Itâs such a sprawling, massive, invasive organism. We have an ongoing communications program with our installed base of customers and weâre judicious about how much we send them. Weâre constantly doing focus groups and surveys to detect any ripples of dissatisfaction with either the volume or the nature of the communication.
BtoB: Are any of you using rich media in your e-mail marketing beyond HTML or text?
Romanow: We use it in advertising. We use a lot of HTML e-mail with some good results.
Hughes: Itâs a matter of courtesy when, particularly in the b-to-b space, how does someone want to have their information delivered? A few years ago you had many companies where HTML was an issue. It still is.
Penn: Bandwidth is still an issue for a lot of people. Not everybody is hooked up to a T1.
Beard: No, weâre really not [using HTML e-mail]. Itâs really focused on the fundamentals.
BtoB: We keep hearing about integration, particularly with e-mail and direct mail. How much of that are you doing?
Romanow: Recently, we did an analysis of what drives Web traffic for HP. We really looked at the integration of online and offline activities. Surprisingly, there is a correlation there.
Hughes: Our online and offline content are each planned with the other in mind. The other thing is that we definitely have the back end tied with the front endâthe same branding look and feel, the continuity throughout.
The worst thing you can do is cannibalize your brand by having a disconnected message from one product group to another.
Beard: We have less so been mixing them in an individual effort or in a campaign. Weâll want them to run in concert with each other so that they look and feel the same, but we donât necessarily see that weâre getting a good bridge between the two. Itâs either/or.
BtoB: What are the trends you see in e-mail marketing?
Romanow: The big thing now is looking at the effectiveness and efficiency of your efforts. Marketing ROI is the big mantra. What works is being able to do A and B testing, to be able to go out with an offer or message, and then to also support it with another message and take a look at the differences. â¦ The point is to be able to get a true handle on the effectiveness of your e-mail and regular mail activities and to bring those pieces together. Then you need to be able to take a look at customer segments and use that information to begin to predict with your customers the sorts of behaviors that will make your communication more effective.
Hughes: ROI is certainly a key component and there are aspects where being able to measure is crucial. Most of the messages weâre sending have to do with reinforcing behavior and changing behavior.
Beard: Thatâs our approach as well. It is a medium first to reach out and touch them and talk to them, but weâre not trying to drive lead generation off of it.
Penn: What I found thatâs interesting is that first with the Internetâand then e-mail coming on its heels in terms of trying to grow and become a medium in and of itselfâthere was always this using offline stuff to drive online engagements. Iâm seeing the reverse of that, where we can use online to drive offline engagements. Itâs a complete paradigm reversal.
Hughes: I think the next level is co-branding, where youâve got the ability of brands that work together on co-branding with distribution, so that the content is brought to the end customer in a way that leverages the brand and leverages the channel of sales, be that a dealer or reseller. Weâre doing a fair amount of that already, but itâs only to the level of the brands sitting side by side. I think the next [thing] will be actually dynamically generating content and exchanging data, which weâre also doing.
Penn: Thatâs what e-mail is all about: itâs data. Itâs a great conduit for making data relevant and getting insight and information.