Interactive Seven 2009 Supplement - Marketing Week

MWIB_260209_p013 19/2/09 17:20 Page 13
INTERACTIVE EMAIL
E-love to
keep that
20% warm
Forget the doom mongers,
there is a small core of people
who make up most of
your revenue and they are
quite smitten with you.
You’ve persuaded them and
they are happy to spend
their hard-earned money
with you.
Experian recently carried
out a report into online
retailing entitled Engaging
Online with the Empowered
Customer. It revealed a
juicy nugget of information:
70% of revenues were generated
by just 30% of customers.
For marketers who remember Pareto’s classic 80:20 rule, these
statistics ring true. The rule has become a tenet because it never
seems to lose its currency while markets change and develop.
Even if you grow your base of customers, you will presumably
have more turnover, but 80% of revenues will come from only
20% of them. The intuitive reaction is to target the “one-off”
purchasers in order to encourage them into the 20% group.
Here’s how the Pareto maths add up. Say 10,000 customers
contribute £1,000,000 of income. If the rule holds, then 2,000 of
them will contribute £800,000 (£400 per head) and the remaining
8,000 will contribute £200,000 – £25 per head. If you want to get
another £100,000 of income, what looks easier? Getting your
2,000 loyalists to spend another 12.5% (£50 each), or recruiting
another 4,000 new customers?
So, the smart option for recessionary times is to get passionate
about your best customers. Now is the time to thank them
and give them the incentive to spend more with you, or at least
spend at the same level. Make sure they “opt-in” to a dialogue
with you. Don’t be too coy – remember these are the ones that
love you. Then start talking. What about a discount on their
next purchase? A free gift? Be daring: ask them to recommend
you to their friends. This is where e-marketing can help. It’s a
low cost and immediate way of keeping in touch. No long development
cycle, and with the benefits of complete “trackability”,
and the option to run test matrices to see what works.
A balance between email-based marketing, and onsite or
online-based campaigns needs careful consideration. I would
recommend that you look at your online sales and find your top
20%, then get a four-to eight-week programme of communications
going with them. Use a range of offers and techniques.
And, if it works, think about rolling it out to the other 80%.
You’ve invested in some key customers, and it’s paid out.
Now’s the time to cuddle up close until the economic frost
starts to thaw.
Mark Wooding, Managing Director, Soprano,
One Hardwick’s Square, London SW18 4AW. T: 020 7198 8423,
E: mark.wooding@sopranodigital.com, W: www.sopranodigital.com
Optimising
the potential
As email marketing is cost-effective
and measurable, its prospects look
positive, even during recession, but
marketers must focus on improving
content if its potential is to be
fully realised. By Sarah Forsey
Despite email marketing’s proven success, good communications
principles are not always applied with the same precision and
effort as they are with other promotional techniques. Brands
are often of the opinion that because production costs are lower
than in other media, email marketing can be approached with less thought.
The ease with which email can be created and sent also adds to a rather
blasé “one-size-fits-all” attitude, but it is important to remember that
although emails are simple to send, they are difficult to get right.
When email’s potential as an interactive channel to approach both
new and existing customers was first recognised, there was an explosion
of unsolicited mail. Companies sent out untargeted content to all customers,
while hopeful marketing teams crossed their fingers that this
might work.
This blanket mail-out approach, borne from a dream of minimum
effort and maximum return, has created a difficult challenge
for the modern email marketer. Public opinion of email marketing
is low as a result of people being bombarded with a stream of irrelevant
and intrusive mails. Spam filters and software have not completely
stopped consumers receiving a
large amount of junk and
unwanted mail. Marketers must
first improve attitudes and regain
client trust, differentiating themselves
from the spammers, in order
for click-through and, ultimately,
response rates to grow so that
email’s success can be maximised.
Relevance and personalisation
should be first to be considered in
any email campaign. Relevant
emails will be welcome. “Marketers
must start collecting more data
about the interests and behaviour
of their email subscribers and use
a variety of data segmentation techniques
in order to produce timely,
tailored and relevant one-to-one
Skip Fidura: Any content that is pieces of communication,” says
irrelevant or ill-timed will be seen Skip Fidura, digital director of
as spam in the eyes of consumers email marketing platform dot-
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