Sounding off on the future of e-mail

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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 Association’s 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 it’s flat is because we have an integrated on- and offline communications strategy. We’re not using it for acquisition, so it’s 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] it’s probably flat to maybe up a little bit, depending. We’ve seen good uses of it, for example, to drive a registration to Webinars in business-to-business situations. But I don’t believe that e-mail is direct mail online like some folks have been saying for a long time. I just don’t buy that.

BtoB: What’s the difference?

Penn: [Direct mail] works. It’s tactile. It’s an experience. It’s something that you can spend some time with. Yes, it’s invasive, but if it’s done properly it is something that has a much greater impact. E-mail is often seen as just a pest.

Romanow: I’m in the analytics area so I don’t often look at the budget surrounding e-mail. I can’t tell you whether we’ve gone up or down in terms of budgets. I can tell you that we’ve 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: We’ve had actually some pretty good luck with Webinars. We’ve used both direct mail and e-mail to drive traffic. It’s so much easier in e-mail to click and get your registration page, sign up and you’re done. We have experimented with pre- and post-direct mail. Post-direct mail e-mail is the one that gets the most registration because that’s when people finally decide. It’s a last-minute urgency purchase. We don’t 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 they’re 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 they’d 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: We’ve had a conservative approach from the beginning. It really hasn’t 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. We’re doing one-to-one communications.

Beard: For us it’s an opt-in. Then, it’s 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: We’re dealing with customers where you have a long-term relationship with a never-ending sales cycle that’s at one stage or another. If you look at the lifetime value of the relationship, the cost of that customer deciding now—based on oversaturation of communication—to 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 we’re blue in the face and we’re 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, it’s much less likely that customers … are going to regard your message as spam.

Hughes: It’s virtually impossible to regulate spam. It’s such a sprawling, massive, invasive organism. We have an ongoing communications program with our installed base of customers and we’re judicious about how much we send them. We’re 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: It’s 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, we’re really not [using HTML e-mail]. It’s 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 end—the 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. We’ll want them to run in concert with each other so that they look and feel the same, but we don’t necessarily see that we’re getting a good bridge between the two. It’s 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. … 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 we’re sending have to do with reinforcing behavior and changing behavior.

Beard: That’s our approach as well. It is a medium first to reach out and touch them and talk to them, but we’re not trying to drive lead generation off of it.

Penn: What I found that’s interesting is that first with the Internet—and then e-mail coming on its heels in terms of trying to grow and become a medium in and of itself—there was always this using offline stuff to drive online engagements. I’m seeing the reverse of that, where we can use online to drive offline engagements. It’s a complete paradigm reversal.

Hughes: I think the next level is co-branding, where you’ve 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. We’re doing a fair amount of that already, but it’s 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 we’re also doing.

Penn: That’s what e-mail is all about: it’s data. It’s a great conduit for making data relevant and getting insight and information.

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