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Overview of Email Marketing

Why

Email marketing is a broad category of services that encompasses everything from one-time emails, to newsletters, to systems that analyze customer behavior and tailor messages with tremendous precision. Here's a rundown of the kinds of messages you can send using email marketing services: …More

• Newsletters. Send company newsletters once a day, once a week, once a month, or once a year. Send different newsletters to different segments of your list, such as customers, employees, or investors; or covering different topics.
• Acknowledgment Emails. Send notifications that you've received a communication, that a transaction has been processed, or that a package has been shipped.
• Direct Email. Marketing communications that are simply messages, not regularly scheduled newsletters. They could be triggered by event promotions, coupons, discounts, new product announcements, earnings reports, milestones, or any other reason for reaching out to the mailing list.
• Reminder Emails. These emails might remind customers about an event they indicated they wanted to attend. They might also serve as reminders about an action that hasn't yet been completed, such as items left in an online shopping cart, or a registration that hasn't been verified.
• Notification Emails. Subscribers to some systems can specify when they'd like to be notified about certain tasks. These are used, for example, for low-balance notifications by banks, or notifications that a new comment or message has been posted or sent.
• Timed Messages. These are often used in "lead nurturing" or "drip marketing" to check back with prospects on a timed schedule with a series of messages designed to increase engagement.
• Autoresponders. These are email addresses that automatically return a preprogrammed message in response to any email received at that address. An example would be an email address such as contest-rules@company.com, which would instantly send rules to a contest in response to any email sent to that address.
• Lifecycle Messages. Messages that are sent depending on a person's level of involvement with the marketer. For example, lifecycle lists are often divided into prospects, customers, and lapsed customers. Different email messages are then sent out depending on the person's position in the cycle.

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How

You might have heard that email marketing is illegal. It's not. Like everything else, it's governed by the laws of the land where the marketing takes place. …MoreFor example, laws against making fraudulent statements apply to commercial email. In the United States, email marketers are required to follow the rules outlined in the CAN-SPAM Act or be subject to possible fines.

Perhaps the most important prohibition in the CAN-SPAM Act is that it's illegal to send unsolicited commercial email (UCE, or "spam"). Unless others have agreed to receive email from you, or "opted-in," it is illegal to send them a commercial pitch. Because of this law, many email marketing services require you to prove that the people on your list opted-in. Some email marketing services will ask you to write to everyone on your list and have them subscribe in order to verify that you have their permission to communicate via email. «Less

What

You should avoid services that offer to sell you email addresses. No reputable email marketing service will allow you to import a list of purchased email addresses, because there's no way to guarantee that the people on that list opted-in. That doesn't mean you can't market to people who aren't already on your list. You can often send marketing messages through companies that have large opt-in lists. But buying email addresses for the purpose of email marketing is not a best practice and could get you into legal trouble.

You should also avoid vendors who've been reprimanded for violating email marketing rules. By searching for the vendor's name along with the word "blacklist," you should be able to quickly find out if a company is listed on any of the major blacklists of known spammers. If the vendor is on a blacklist of spammers, there's a high likelihood that messages sent through that vendor will get trapped in spam filters and will never reach the people on your list.

Trends

Email marketing is the art and science of communicating a marketing message using email. It involves creating compelling marketing messages, gathering email addresses of prospects, using software to deliver messages to prospects, and tracking the results of email marketing campaigns.

But is it effective? Absolutely! A 2011 study from Ziff-Davis showed that email marketing is the most effective marketing technique used by businesses-with twice the performance of direct mail marketing and five times the return of television advertising!

Forty percent of businesses expect to spend more on email marketing next year. At the same time, Forrester Research shows that people have a better attitude about receiving email marketing communications than they used to. From 2006 to 2010, the percentage of people saying they received "too many" email offers dropped from 77% to less than 50%.

Businesses report that they consider email marketing to be somewhat effective or very effective with respect to the following:

• Building brand awareness
• Supporting offline marketing programs
• Increasing website traffic
• Increasing sales revenue
• Improving customer relations and retention

Experienced marketers report that the shift to mobile delivery of email to smartphones and tablets is the biggest change happening in the industry, so be sure to ask about mobile optimization when signing up with an email marketing service.

Another trend is timed messages or drip campaigns, where messages are automatically sent to subscribers on a scheduled basis.

A major priority for email marketers is better list segmentation-the ability to divide a list by such factors as how recently a purchase was made, how often the customer buys, the average size of a customer's order, and other factors. Be sure to ask your email service provider how your list can be segmented, and how many variables you can track ("custom fields").

Combining list segmentation and drip campaigns results in lifecycle segmentation, where the messages are customized and scheduled based on how recently prospects engaged, and how active their involvement has been. Email marketers using lifecycle segmentation report five times the results of those sending identical messages to everyone on the list.

Social sharing features have extended the reach of email marketing messages, making it easy for people to "like" or share your emails. Almost all email marketing services now include social-sharing features in their monthly packages at no additional cost.

Choosing a Vendor

1. How large is your list?

   Most email marketing services price according to the size of your mailing list, or "house list." There are many no-frills services that are free for less than 500 names. When you go over 500 or 1,000 names, prices start from $5 per month to $20 per month, and go up from there. For lists with more than 10,000 names, prices are often over $100 per month.

2. How often do you plan to mail?

   The second major factor besides the size of your list is how often you plan to mail to a list. Some services price by the number of messages sent. For example, a rate of 5 cents per message would cost you $50 every time you mail to a 1,000-person list. If you plan to email to your list several times a month, you might look for a plan that charges by the size of the list and not the number of emails.

3. What add-on services appeal to you?

   The third factor in helping determine the right email marketing vendor relates to the extra services you need or want for your business. Some companies offer assistance with the copy-that is, writing effective email pitches and subject lines. Other companies will help with the creative-that is, designing good-looking messages. Some services can test different versions of a message before mailing to the whole list. And several email marketing programs are integrated with customer relationship management programs (CRM) that facilitate greater tracking capabilities and more strategic engagement tactics, such as lifecycle marketing.

Calculating Costs

• Free Plans. Some of the software and services used to manage email marketing campaigns are available free of charge. For example, many email service providers will allow you to manage a mailing list of up to, say, 500 contacts, for free. However, you can cause yourself a lot of legal trouble with email marketing if you don't know what you're doing. It's usually worth it to pay for a service that has a good reputation.
• Basic Monthly Plans. Expect to spend between $5 per month and $20 per month for an email marketing service that will handle up to 1,000 contacts and provide excellent tools to ensure your compliance with email marketing laws. Your basic plan should include some ability to segment the list, along with tracking important stats such as the delivery rate, bounce rate, open rate, and clickthrough rate.
• Extra Charges for Large Lists and Frequent Mailers. You can expect to pay as much as $100 per month if your mailing list is over 10,000 names, or you send more than 10,000 messages per month. Most companies will quote an additional price-per-contact for a very large list, or a price-per-message for very busy mailing lists.
• Optional Testing, Analysis, and Management Services. Best practices in email marketing include testing different subject lines and messages first before mailing out to a large list. Many firms offer tools to make testing subject lines or messages easy. They automatically analyze the different response rates and adjust the mailing based on the analytics. Another optional service is spam analysis. Email messages are rejected for a variety of reasons, such as a wrong email address or a full mailbox. Spam analysis software examines bounced messages to determine the reason the message bounced, rather than just deleting every bounce from the mailing list. Cross-platform testing is a way to see how compatible a message is with a variety of devices before actually sending the message. These sophisticated optional services can significantly improve the results.

Purchasing Tips

• Make sure you can transfer your existing contacts to your new service. Your new email marketing service will want you to verify that the people already on your list have opted-in. If your first mailing has a bounce rate or complaint rate that is too high, the service might suspend your account. To avoid this, try to identify bounces or complainers and remove them from your mailing list before you transfer to the new service.
• Test the new email service before committing to it. Many email marketing services have a free trial period or will allow you to use the service without charge if you have a small mailing list. You can test the service during the free trial period by using just a small fraction of your list. Then you can import your entire list once you're satisfied that the service meets your expectations.
• Conduct a reputation check before signing with a vendor. If an email marketing firm is violating the CAN-SPAM Act, it won't take long for the firm to get a reputation as a spammer. So-called blacklists are quick to list any company that has a pattern of sending unsolicited commercial email. When a company gets on a prominent blacklist, emails sent by the company often get trapped in spam filters. Check to see if the vendor you want to use is on a major blacklist, and avoid those that are.

Comparison Checklist

Some of the key factors you should take into consideration when comparing vendors are listed below.

Print Checklist

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1. Basic Charges
   • Monthly base charge
   • Maximum number of contacts
   • Maximum number of emails/month
   • Free trial period?
2. Extra Charges
   • Extra charges per contact?
   • Extra charges per message?
3. Options & Capabilities
   • Storage for media used in email?
   • Social sharing enabled?
   • Messages optimized for mobile?
   • Manage list from mobile phone?
   • Tracking and reporting services?
   • Spam analysis?
   • Cross-platform testing?
   • List segmenting?
   • Number of custom fields?
   • Lifecycle segmenting?
   • Assistance writing messages?
   • Assistance designing messages?
4. Service & Support
   • Free live online assistance?
   • Free live phone assistance?
   • Training videos available?

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Glossary of Terms

• Blacklist: Used by Internet Service Providers (ISPs) to block emails from suspected spammers. Marketers who violate email laws or customs can find themselves added to blacklists, which can result in their email being completely blocked.
• Bounce Rate: The undeliverable rate for messages sent by bulk email. A bounce rate of 10% is common for monthly newsletters, even with a very clean or new list. A bounce rate that's too high indicates a problem with the quality of a list and can result in the suspension of mailing services by email marketing providers.
• CAN-SPAM Act: Passed by the U.S. Congress in 2003, this act prohibits sending unsolicited commercial email (UCE) and establishes rules for how commercial email messages must be formatted and what disclosures they must contain. All email marketers in the United States are subject to the provisions of the CAN-SPAM Act.
• Clickthrough Rate: The percentage of those who receive or open a bulk email message who then activate a hyperlink ("clicked through") for more information. It's a measure of how engaged a list is.
• Custom Fields: The number of variables that can be tracked in a segmented mailing list. The number of custom fields and the ability to do multiple sorts based on custom fields is a measure of how versatile a mailing list is.
• Direct Email: Any message sent to a contact's email address. Some people use the term to distinguish between regularly scheduled messages (newsletters) and all other messages (direct email).
• Drip Campaigns: Email marketing campaigns that use a sequence of automated, timed messages to stay in contact with prospects and entice them into taking an action.
• House List: The core or central mailing list maintained by an organization, as opposed to a rented or test list.
• Lead Nurturing: This refers to moving prospects along through ever-deeper levels of engagement with an organization. The prospect may start as a list subscriber and, through lead nurturing, become a valued repeat customer.
• Lifecycle Segmentation: This is a powerful blend of timed messages (drip campaigns) and list segmentation based on everything that's known about a contact. Messages are both timed and customized based on previous behavior by the contact. Lifecycle segmentation can dramatically improve the results of email marketing to a specific list.
• Mailing List: This term has two different meanings in email marketing. Some people use the term as a synonym for newsletter; newsletters are sometimes called "mailing lists." A mailing list is also a database of contacts.
• Mobile Optimization: There are two main ways the increasing use of mobile devices to process email has changed email marketing. The first is the need to design messages to be viewable and appealing on mobile devices. The second is making it possible for marketers to manage the back end of email operations from mobile devices.
• Newsletter: An online newsletter, email newsletter, or ezine is a subscription service for delivering messages using email.
• Open Rate: The percentage of those receiving a bulk email message who actually open it. Most email marketing providers can track whether or not a message is opened and whether or not a link in that message is clicked.
• Opt-In or Subscribe: To opt-in means to actively consent to receiving email messages from an organization. Most email marketing providers will only allow you to send messages to people who've subscribed or opted in.
• Opt-Out or Unsubscribe: Opting-out means leaving a mailing list service or unsubscribing from a newsletter. Under the CAN-SPAM Act, commercial email messages must include an easy mechanism for opting-out or removing one's email address from a mailing list.
• Segmentation: The ability to divide a list based on the attributes of those on the list. Segmented lists offer ways to break a list into smaller pieces based on many variables, such as the size and frequency of purchases.
• Social Sharing: Features built into email messages that make them easy to share with others. They include sharing messages with social networks, forwarding emails to others, ranking messages, rating messages, and other ways for easily bringing a message to the attention of other people.
• Spam: Spam gets its name from the processed, canned meat product. In email marketing, it means any email message that someone either didn't ask for or doesn't want. "Spamming" is the act of sending out these messages.
• Spam Analysis: Software that analyzes the reason an email has bounced. Knowing why email has bounced can help marketers improve their results while keeping good contacts on the list.
• Unsolicited Commercial Email (UCE): A more technical term for spam. It means just what it says: email with a commercial purpose that the receiver did not ask for. It's also called junk email.