(14min 54) Email marketing is going through a change. With so many companies bombarding us each day, the open rates of campaigns is on the decline.
Today on BTalk Australia Phil Dobbie talks to John Merakovsy, the Australian general manager of Experian CheetahMail about how to ensure that your campaigns are focused and relevant.
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See also:
Do’s And Don’ts Of Email Marketing
Email Marketing A Powerful Tool
The 5 Cardinal Sins Of Email Marketing
- Today’s Transcript
Phil Dobbie: Hello, I’m Phil Dobbie. Today on BTalk Australia, we look at permission-based marketing. One to one marketing has come a long way, thanks to email, now it’s starting to get more personal. John Merakovsy is the general manager of Experian CheetahMail in Australia. John, we’re a lot more particular about what we receive these days, aren’t we? A misdirected email can do more harm than good I think.
John Merakovsy: Oh, that’s absolutely true Phil and I think that the challenge for everyone (individuals, consumers and businesses) is that we’re drowning in email. And how to make those emails actually relevant if you’re a business, to your customers and how to actually filter what’s relevant and what’s not in your inbox, are the real challenges facing people today.
Dobbie: Yeah and a lot of those emails we just don’t open, so I’d imagine because of that email marketing is perhaps less effective these days than it was a few years ago, for example.
Merakovsy: Well, it’s interesting. A couple of case statistics there. There’s certainly the historical open rates for emails are declining. If you look at it today, we’re probably talking in the order of 20 percent open rates. And that varies incredibly really, when you look at the bell curve as to whether we’re talking about transactional messaging, such as order confirmations versus pure cataloguing product pictures. What you find though and what most email marketers will say is that email is still their most effective communication channel. And that’s from a duller point of view. Return on investment on email marketing is somewhere in the order of $45 return for every dollar invested. So it’s still an incredibly valuable and incredibly powerful channel.
Dobbie: The fact that it’s so cheap though, isn’t that also part of the problem? Because the old fashion, the old days of direct mail when people, it was so quaint, wasn’t it? You used to stick stuff in envelopes and people used to go to their letter box and open it and it was quite expensive. I mean these days, obviously, the cost of email is a lot cheaper. So isn’t the temptation there to bombard people and that’s why the open rates of these emails are starting to decline?
Merakovsy: You could say that. We turn it around the other way at CheetahMail and turn a problem into an opportunity for business. And that is because so many people are actually doing the load and blast and just sending millions of emails out because it’s so cheap.
Dobbie: Normally for Viagra, of course.
Merakovsy: Of course. But let’s not talk about spammers. I mean we’re even talking here about those that are using commission-based marketing let alone the spammers.
Dobbie: Yeah.
Merakovsy: The key though is that it presents businesses with an opportunity to actually take email marketing to a new level. And that is to actually understand the customer and use the technology to drive a, well we’ll say a relationship with the customer. That is, send them email that is relevant to them.
Dobbie: Right.
Merakovsy: And that presents a real opportunity because I think email marketers that are really embracing this level of sophistication are developing much better relationships with their customers. Now, when we talk about our business’s relation with its customer, what we’re talking about a business optimising the lifetime value of that customer. And that means there’s benefit to both sides. The business is actually driving the dollar value of that relationship to its highest level. And the customer is only receiving information about products and services or any other information that that customer deems is relevant. And what that means is it generates a level of trust. That customer knows when it gets an email from whomever it may be, which ever business or supply or information provider, it knows that that email is relevant and therefore those open rates are much higher than if like the bulk standard email messaging.
Dobbie: So how are you targeting this? Is this because the customer has specifically asked, they’ve ticked a box to say I want information about this? Or is it by tracking their behaviour and saying hey, look, it looks like you’re going to be interested in this based on what you’ve done in the past?
Merakovsy: It’s actually both Phil, yes. Essentially, preferences are one very good way of doing so. And there’s certainly email marketers in Australia doing it to some degree where you register for, on a particular site, and you nominate what you’re interests are, whether it’s music books or otherwise. And then the subsequent email that you receive are special offers only in those subject categories that you’ve nominated are your preferences. Now interestingly, when you actually look at people’s behaviour versus what they actually nominate they’re interested in, there’s not always a perfect alignment. And that’s where things like web analytics come into play. There are products like Omniture and Coremetrics and, to a less degree, Google Analytics, that allow organisations to actually look at what people are browsing, as in individuals, are browsing on their website, perhaps transactions that didn’t go through. Let’s say they got to the purchase page, shopping cart and they abandon their shopping cart. All that information in the analytics can also be used to drive subsequent email marketing. So that’s an area that some people are less comfortable with because it has an element of the big brother about them, watching what they’re doing. But used properly it means you can actually absolutely provide most relevant information to a customer based on what they say they want and also based on their past purchasing history and their viewing behaviour.
Dobbie: Now, for all of this, with email, with the relevantly recent privacy legislation, you have to say that you want to receive those emails. So you have to have registered with the company. So if you go to, and of course, you’ve got to have the email address anyway. So let’s take the example you gave where you’re halfway through a purchase process and for some reason, you don’t complete that process. Is it legitimate for you to approach, it does have an element of big brother about it, doesn’t it? Is it legitimate for you to approach that customer then to say, hey look, looks like you were trying this but you didn’t finish.
Merakovsy: If they are a pre-existing customer and therefore have already opted in to other communications and other purchases then you certainly can. So essentially, if they’re a customer and you’ve gotten to that page but you haven’t entered your details and you’re not a customer, that’s the real key issue. There must have been prior consent before any implied or otherwise, based on that individual’s behaviour.
Dobbie: Now as we get smarter about this, there’s a lot more system integration, a lot more system work isn’t there? So I mean there’s, and from my experience in email marketing in the past, one of the big problems was being you’ve got a standalone email solution. And then you’ve got a big CRM system, which is where a lot of the customer data is sitting. And you really want information to pass in both ways, don’t you? You want the CRM to supply some of the data that you’ll use to segment an email shot. At the same time, you want to pass the information back to the CRM system to say that this customer is being emailed. Is that getting easier or harder, that sort of integration between systems these days?
Merakovsy: Oh, look Phil, I’d say it’s getting easier. I mean I’ve been in the IT space for a long time and I’ve been involved in many, many systems integration projects. And to be honest, I’d say most of them are over done. It’s not that difficult particularly with the technology available today. So the likes of the CheetahMail can integrate into Sebel, into a Salesforce, basically any CRM. It’s really just a simple matter of understanding what data and when and how it’s transferred from the CRM into the email system. What data you collect in the email system, such as the opens and the click throughs and any other behaviour, and exporting that back in. So it’s not a difficult process at all. But certainly, it’s well worthwhile, because the segmentation is really the key to sending relevant information. And when I say segmentation, I’m not just talking about the old style demographics. I mean, demographics are still of some relevance, but you find today if you look at people’s behaviour based on demographics, it’s again, not a perfect alignment. What you expect a 55- to 65-year-old generation to be doing online and how they represent themselves and what they think and feel is not necessarily any different from other demographics. So that’s why we have to understand the customer in terms of their individual preferences and their behaviour.
Dobbie: And trigger events, I guess, are important as well. I know for churn, for example, a trigger is very important and you’ve been talking about enhancing or lengthening the lifetime of the customer. So preventing churn obviously, is important for that and a lot of that can be related to triggers. A couple of bad things that have happened to a customer means that something really should be done to try and prevent that. I guess that’s an important part as well these days, isn’t it?
Merakovsy: Certainly is. And in fact, those types of event-based trigger messages have a much higher response rate. I mean at the most basic level, a triggered message is something like a welcome message. You register to a site, you buy something, you’re immediately sent a welcome message. Borders, for example, do these extremely well, where you walk into the store and you’re asked for your email address and immediately, it sends you a discount coupon for 25 percent off a book in a particular category. That is incredibly powerful and has a much higher open rate than any other form of sort of blast email. Now you can use any form of trigger if you like. You could say 30 days after the last purchase, in a particular product category, send the people a reminder email. Or send them an additional offer and additional incentive. An example of an organisation that’s doing that extremely well in Australia is, in fact, Microsoft Xbox, who happens to be a CheetahMail customer. And they’re really doing with email marketing a great, great sophistication that we really haven’t seen a lot of companies doing here. They’re really separating their audience into prospective customers and customers. And based on where they are in the purchasing life cycle, whether they’re a console owner or a prospective console owner, they’re actually sending very different messages and very different triggers. And that’s great for the individual, because again, they’re only getting information that’s relevant to them.
Dobbie: Great where you’ve got that opportunity, isn’t it? To see how customer is actually using your product. That doesn’t work for everything, but if you’ve got a product which is connected to the internet and you can track their behaviour then you can obviously do a lot more. A little bit harder where you’ve bought something and taken it away, I guess.
Merakovsy: That’s very true. But again, that’s where you can use survey information and keep in communication with your customer. So there are other means of doing it. And this is the thing, email marketing is not just about online retailing. I mean, again I’ll use the Borders case study as an example. Borders, up until recently, certainly in the United States, didn’t have an ecommerce enabled site. It was all about driving traffic into the store and about the loyalty program. And I think it’s been the most incredibly successful email marketing program I’ve seen. In the United States, it went from 0 to over 20 million people on their subscriber list. And in Australia, or Australia, New Zealand and Singapore, it’s over 800,000 people as well, in something like two years.
Dobbie: As you get more sophisticated about this and particularly, when you’re not using email just for campaigns but you’re also using it for those trigger events we’ve spoken about, it’s going to get harder to manage, isn’t it? You could find yourself with hundreds of different, at any one time, hundreds of different emails that are being sent to customers. How do you keep control of that sort of thing?
Merakovsy: As a business, you mean?
Dobbie: Yeah.
Merakovsy: Reporting is the key.
Dobbie: Yeah.
Merakovsy: Reporting is really important. So for example, in our application, we have a variety of different reports for different types of audiences. So, one person looking at an individual mailing can understand the behaviour of the audience, the click throughs and the metrics. You then have campaign reports. So it’s this idea of having a campaign, for example, which might last 12 months and being able to understand exactly what’s happening across the span of that campaign. These are really important tools to have for an email marketer and really for any business trying to understand whether it’s overloading its customer and whether they’re responding accordingly.
Dobbie: So the key metrics, they still are open rates and click throughs, are there any other metrics which are important? And open rates are getting harder these days, aren’t they? Because a lot of preview panes, for example, in programs like Outlook, you might be looking at an email without opening it.
Merakovsy: That’s correct. And in that case, that won’t register as an open. That’s just a preview. I guess the key that people have been using are click throughs. But click throughs, without subsequent conversion or some form of transaction, it’s an indicator. We use, particularly with online retailers, anyone selling anything online, we use a metric called track to purchase and what that means is if, as a result of a click through to a website, some transaction has taken place, it actually reports back to our system exactly how many transactions have taken place and the total dollar value of the transaction. So you get this situation where you run a report on a particular email campaign and you can look at the hot spots, the links on that particular creative and it’ll actually tell you how many dollars worth of revenue were generated by click throughs on that particular link. Now that’s a powerful metric.
Dobbie: Now, of course, it doesn’t always happen straightaway. Someone might click through from an email to a particular site, think about it, talk with their partner and then go back maybe a week later and make a purchase. So is it still possible to track that sort of behaviour down the track?
Merakovsy: No, this is really within the session. So you’d probably miss that. So it may not be perfect from that perspective, but ultimately we’re talking about some form of indicative metric that gives you some guidance as to whether or not this campaign has worked or not.
Dobbie: Right, OK, finally, we’re in a rapidly evolving world. Is email still going to be the dominate form of communication, do you think, in say five years? I mean we have things like instant messaging and other ways that we’re communicating online. Do you think there’s longevity with email?
Merakovsy: Oh, this is an interesting area and one I’m particularly fascinated with. I’ve got three kids and always talk to their friends about email, for example. And they all tell me, we only use email to talk to old people. It’s dead, it’s gone. But interestingly when you actually drill down into whether they do use email, they do. They certainly do. They use instant messaging, they use MySpace, they use Facebook for all of their social networking. But when you look at what they use email for, yes they use it to send emails to their parents and to old people. But they also use it to communicate and receive email marketing messages with providers and vendors and people they buy from. So I think what actually is happening is it’s not that one is going to be the dominant over the other. It’s actually that we’re finding it’s changing, and certainly for this younger generation, we’re seeing that yes their social communication is moving away from email. But they’re still big email users. And will continue to be so.
Dobbie: Right, OK. Thanks very much for your time. A very old, it would appear, John Merakovsky, that’s for your time today.
Merakovsy: Thanks very much Phil.
