Weighing in on e-mail's evolution

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To take the pulse of e-mail marketing, BtoB Senior Reporter Christopher Hosford contacted key e-mail service provider executives as well as analysts who follow the industry to solicit their views on cutting-edge e-mail marketing trends, the changing needs of marketers using this channel and its integration with other digital and offline marketing media. Participating in the virtual roundtable were Sara Ezrin, senior strategy consultant, Experian Cheetah Mail; Naylor Gray, director-global marketing, Frost & Sullivan; Bill Nussey, CEO, Silverpop; and Adam Sarner, research director, Gartner Inc. BtoB: How would you describe the health of e-mail marketing today? Bill Nussey: There's been a lot of talk about the death of e-mail because of its ubiquity and overuse. It all seemed to portend e-mail's obsolescence. But it's like the famous Mark Twain quote, “The rumors of my death have been greatly exaggerated.” The end of e-mail is highly unlikely, but things are moving toward a multichannel world rapidly. The reason is that people listen across multiple channels, and some people are more open to one channel versus another. E-mail as a component of multichannel marketing will thrive for years to come for b-to-b marketers. Sara Ezrin: We've seen tremendous increases in volume year over year across all verticals. And among b-to-b marketers, our volume is up 23% in the latest quarter compared with the same period last year. This indicates that marketers are relying more and more on e-mail as the direct-marketing vehicle of choice. Adam Sarner: That may be true, but in one sense, e-mail has not matured. When budgets are tight, marketers get what they believe to be cheap and effective e-mail blasts out the door. But the problem is, e-mail is getting less than a 2% response rate and declining because there's often little relevancy to the messages, with content that's much more about the company than what the customer is asking for. BtoB: Is e-mail, therefore, a popular but still unsophisticated marketing channel? Naylor Gray: I would say the level of sophistication is changing. There are more tracking capabilities now, where e-mails can be sent from different sources, such as sales, marketing or channel partners. And today, they all can be closely tracked via marketing automation. In a way, the economic downturn is helping fuel this shift to automation as companies cut back on people. Similarly, we're seeing a wholesale movement to demand-generation marketing, that integrates a lot of different things that may demand attention, such as webinars, white papers and other enticements to get people online, to register and to come out of the woodwork to identify themselves. From that standpoint, e-mail is common currency and very relevant. BtoB: As e-mail marketing becomes more tightly entwined with marketing automation tools, it sounds like its level of sophistication is rising as well. Nussey: Yes, as data increasingly is being used to drive campaigns. So it's not just about sending out a newsletter anymore but also by adding a note saying, “We noticed you haven't used this feature of our product before, so here's an offer to try it and, if you like it, we can add it to your contract.” Because the complexity of b-to-b products exceeds b-to-c, the opportunities for cross- and up-selling is great. Gray: Tracking tools are definitely helping. In the past, marketers would track only if the e-mail was opened or forwarded, or maybe [if] a click-through took place. But that data would just exist in a silo and be associated only with that campaign. Today it's possible to have all your different e-mails recorded against a customer profile. Now the marketer can see, for example, that various people in his company—for example, sales, marketing and the channel partners I mentioned earlier—sent a person a variety of e-mail messages. That marketer can see that three of six e-mails were opened, and that certain, particular ones were forwarded to other people. Now he's able to build a profile of this prospect, based on what Eloqua founder and Chief Technology Officer Steve Woods has called the prospect's “digital body language.” The prospect is signaling digital indicators of interest. There are also passive signs of disinterest, such as e-mails never opened, deleted without being opened, not responded to and so forth. These things also can tell us something. Marketers need to listen not only to the opens and forwards, but also to the deafening silence of the nonresponders. BtoB: How do you see e-mail being integrated into other marketing channels? Sarner: The danger is when e-mail stands alone in isolation and just gets shot out with no connection to other channels, with no context about someone who was just on your Web site, or with no bearing on his recent conversation with your call center. Without these connections, marketers can have no understanding of who will respond to which offer and why. It becomes a fishing expedition, which is exactly like spam except it's permission-based. Nussey: The payoff of integrating is that, for b-to-b marketing e-mail is much more effective than for b-to-c. Unlike b-to-c marketing, where each function is highly siloed, most b-to-b marketing programs have all silos feeding sales. Everyone is trying to maximize this and make it easier to measure success. And because b-to-b marketing has sales involved so tightly, you can typically move a prospect from the anonymous stage of identity to the attributable stage much earlier, and translate that cookie into a person. Then, when that prospect does click-through from an e-mail to your Web site, you can attribute his behavior to his profile. For the future, you'll see a groundswell of multichannel-enabled e-mail that has no precedent today. BtoB: Everyone is talking about how e-mail can feed social media, as a form of viral marketing. How do you see this developing? Ezrin: E-mail is a main way to get the word out in other channels. For example, e-mail to mobile devices is driving traffic to Twitter. And e-mail service providers increasingly are adding links to post e-mail messages to Facebook. We do need more data on how the younger generation is using search for information on these social networks, but it's important also to have a corporate-owned presence on social media to start building relationships. We view e-mail as a way to advertise what companies are doing on social networks and to use social networks to enhance viral marketing, to get an e-mail offer in front of nonsubscribers through six degrees of separation. We're definitely seeing an increase in this form of viral marketing. So far, it's not that easy to track how far downstream your message goes, but there are services out there that do that. Nussey: I would say social marketing complements e-mail, and is far more important in the earlier stages of the b-to-b sales funnel. But once a customer is in a buying or post-buying process the marketer will want to use e-mail as a nurturing tool. There are indications that e-mail being forwarded in a social sense has an impact on b-to-b marketing, but it's different than b-to-c. The viral nature of forwarding, particularly inside a company, is more about sending an interesting e-mail to your colleagues, rather than to an inter-buyer community. Gray: There's legitimate hype around social media, but the over-hyped part is focusing only on the big brands, like Facebook, MySpace and Twitter. The next step is when marketers realize that they can have something that looks like these brands on their own Web sites. They can first use these commercial options to see how social marketing works, but I believe we'll see the real demand in the future for private-label social applications. And e-mail will be the common currency to make this happen. BtoB: E-mail seems enormously versatile. How else can marketers employ it effectively? Ezrin: E-mail service providers, for years, have deployed transactional e-mails; but I haven't seen b-to-b marketings taking advantage of this so much. For example, a transactional e-mail might also push subscription renewals, or suggest replenishment items or provide news about recalls. There are lots of different types of service messages that b-to-b companies can make that are not particularly being used via the e-mail channel today. Also marketers really need to move away from relying on e-mail as a traditional direct-marketing tool and to focus on integrating e-mail with behavioral marketing. This would enable the marketer to start using such behavioral data as click-through patterns, Web browsing habits, abandonment data and past-purchase information to dynamically serve up e-mail messages with the right offer or image based on these behaviors. To date this is used most often by e-commerce marketers, but it could be a great opportunity for b-to-b marketers if it got more adoption. Sarner: I agree that event-triggered e-mail marketing is underutilized. To use triggered e-mail effectively entails looking at what you sell, what's going on in the customer's buying cycle and life and, based on that, coming up with credible, relevant e-mail messages. Lead management is all about event-based processes. Say if a prospect watched an online video, or downloads a white paper or goes to a trade show, he might get e-mail about a webinar coming up. After lead scoring, these various events can produce a qualified lead. E-mail really isn't about sending out things, it's about the lead-management process. Too often e-mail is just this tone-deaf, one-way communication, and it turns people off. With the interaction with the customer in context with the e-mail, you can shift from a fishing expedition to a continuing dialogue. BtoB: Mobile devices in the form of smart phones are becoming ubiquitous. How do you see e-mail marketing exploiting these devices? Nussey: There's too much hype, in my opinion, about texting. There are segments of b-to-b communications where it works. But if you were to ask people whether they'd prefer to get product information via e-mail or a mobile device, the vast majority would choose e-mail. SMS texting is interruptive, hard to read and there are no graphics. Mobile in this sense has a role to play, but mainly as an alerting mechanism. But people are reading e-mail on smart phones, and I would argue that it's not a different channel at all. There are some rendering challenges, and really long messages could be a turn-off on an iPhone. But in general, the process, fidelity and content—all the things you've learned as a marketer—are the same on smart phones. I would argue that this is why e-mail will continue to thrive. Buyers of smart phones aren't saying they want to use a lot of SMS texting. They're saying, “Make my mobile experience identical to my desktop experience.” BtoB: How can marketers address deliverability? Ezrin: Deliverability is a big topic, but it really begins in the acquisition process. I find that most companies don't optimize the automatic “thank you” e-mail that's sent out for registering to begin with. These thank-yous can drive recipients to other aspects of a Web site, manage expectations about the content they'll see there and start building the value proposition about the e-mail program itself. If you manage the relationship like this, the customer is more likely to stay on your list. And if he does leave, it's more likely he'll opt out and not hit junk to leave. Gray: I agree that deliverability is always a problem and probably will be a bigger problem in the future. It's very possible to have a legitimate business relationship between two companies and have strict e-mail security—and still have your legitimate e-mail campaign filtered out. It's a constant challenge because e-mail is an imperfect way to communicate. The perfect way is person to person. Data hygiene is important in this context, as marketing eliminates the nonresponders from the list. But marketers also should consider what they're saying in their e-mails. Is nobody listening? Maybe the messages are bad, or communicated in the wrong way or had no content. This is another thing that's come out of the post-meltdown, this whole need for content. It's too easy to fall back on repeating the same thing over and over again. Sarner: I'd add that marketers should avoid renting e-mail lists. These lists could be worthwhile, but the problem here—even with permission-based e-mail lists—is you don't know how the recipients were originally opted in. If they inadvertently were opted in because they failed to uncheck a box on the registration page, for example, that will just make them angry. Internal lists are much more qualified. The fact is, e-mail marketing is more of a relationship tool than a prospecting tool. And because of that, there should always be a user preference page where the recipient can go to tell the company what e-mails they like and don't like. Amazon does a good job with this. Very few people complain about getting stuff they asked for. BtoB: In what other ways can e-mail's potential as a marketing tool be most effective? Gray: E-mail is definitely less effective today than it used to be because everyone uses it and it's highly competitive. By the same token, white papers and webinars aren't unique anymore either. Today, people have to differentiate themselves, by making it clear they understand who the e-mail recipient is, that his time is respected and that he won't be bombarded with things he doesn't want. One thing we'll see a big rise in is people engaging in activity outside the stream of information. Getting to the digital world is essential, because that's where the technology is to enable you to do all the profiling and other things to qualify people. E-mail can play a huge part here by, for example, getting people to come to a live event. Then you can give them collateral—and maybe offer them a white paper they have to register for. Likewise, with direct mail there is no magic counter that shows when somebody opened the envelope. But you can engage them with other tactics, such as follow-up e-mails, to drive them into an electronic environment, where Web sites and landing pages become important. Ezrin: One area I'm promoting in particular because of its ease of use is integrating e-mail with Web tools. For example, recommendation engines use an algorithm on Web sites to show a visitor a next logical product he should consider or articles he might be interested in reading based on previous behavior. Now we are leveraging that technology to pop up content within e-mail as well. Recommendation engines can be integrated in particular within transactional e-mail. In the past, cross- or up-selling within transactional e-mail tended to be more static, where you'd have to replace an image or call to action manually. But with recommendation engines you can automatically populate cross- or up-sell opportunities, depending on the situation. This could be a huge opportunity for e-mail marketers. M
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