Untargeted e-marketing loses most customers
In the marketing world, email is regarded as one of the cheapest and most effective channels for getting a message directly in front of the intended consumer because it offers the ability to personalise the message, time its sending precisely, and trace its progress through open rates, according to Andy Wood, managing director for GI Insight.
But cutting though the vast amount of email that consumers receive, and actually getting customers' attention, is no easy task, according to recent email benchmarking figures from the UK's Direct Marketing Association (DMA), which show that UK consumers received more than 1.7 billion emails in the first half of 2010 (up 50% from the year before).
The latest GI Insight research found that more than half of UK consumers (53%) say almost all of the direct email they receive from companies and other organisations is irrelevant to them. This finding highlights that far too many companies are overlooking the potential to individualise and tailor email, thus missing out on an opportunity to cut through the bulk of poorly targeted communications and engage consumers with relevant, precisely honed messages.
It would seem that most organisations are still not applying to email the same analysis and targeting they would for more expensive channels such as direct mail and are satisfied with using this medium as a 'cheap' blast-out channel for generic 'Dear customer' messages and offers.
Differences in the level of personalisation applied to email directed at different demographics were also analysed. Marketers were found to be targeting 35-plus aged consumers less accurately than the younger demographics, indicating that brands are not reaching out to families and professionals as effectively as they could via email.
Better, sharper targeting is, however, reported to be found in emails to individuals from higher income households: only 22% of the very highest earners surveyed (respondents with household incomes of £150,000 or more) regarded the majority of email they receive as irrelevant. The survey also found women are in fact a little more likely to receive better targeted emails than men, with 50% of women declaring that the majority of email messages they receive from organisations is irrelevant compared to 55% of men.
There was a very positive conclusion to be drawn from the survey: despite the failure of many brands to target their email marketing, consumers have not been terminally put off receiving communications through the medium. 73% of the respondents declared that in the past year they have given companies they have already purchased from permission to email them. This result reveals that although targeting of email marketing has been overlooked there remains plenty of ground for optimism that, where a relationship with consumers already exists, a strong enough bond has been formed for them to overlook the occasional lack of targeting and welcome properly tailored and personalised communications and offers.
On the other hand, the survey also indicated that email is more effective as a retention medium than a prospecting tool. The responding consumers said that, if they have never bought from a firm before, they are much less likely to give permission to email with only 51% of respondents reporting that during the past year they have opted to receive emails from a company they have never purchased from before. So while consumers are more willing to trust brands they have previously bought from, allowing them permission to email, they are far less open - although not entirely unwilling - to having new companies and organisations to contact them via email.
In order to use email to its full potential and to strengthen the bond between customer and organisation, firms need to show that they value their customers and are aware of their interests and preferences. Sending customers relevant, targeted email communications shows that their personal information is valued and that providing them with the products and services they need is important to the company.
By closely analysing customer data and leveraging the insight obtained to more precisely target and personalise email, it is possible to ensure that consumers keep accepting email communications from a brand and are encouraged to purchase more and more often - and even switch to higher margin products.
Marketers need to take into account customer preferences and understand their behaviour in order to approach them at the right time, in an appropriate tone, and with the correct offer. They need to know if email is more effectively employed in conjunction with communications through other channels for particular customers and whether, in fact, a customer is even worth investing the time and effort to pursue.
Drilling down into customer data provides important insight, allowing brands to deliver relevant promotions and incentives which help grow the customer relationship and encourage the consumer to consider purchasing items they have not purchased from the firm before, or even to make a higher cost type of purchase. If, instead, consumers keep receiving irrelevant communications from a brand they have entrusted with their email address, their disappointment may lead them to do more than just unsubscribe - it could cause them to break off their purchasing relationship with the firm entirely.