- Sending email messages with the purpose of enhancing the relationship of a merchant with its current or previous customers, to encourage customer loyalty and repeat business,
- Sending email messages with the purpose of acquiring new customers or convincing current customers to purchase something immediately,
- Adding advertisements to email messages sent by other companies to their customers
Researchers estimate that United States firms alone spent US $1.51 billion on email marketing in 2011 and will grow to $2.468 billion in 2016.
Types of Email Marketing
Email marketing can be carried out through different types of emails:
Email Newsletters are direct emails sent out on a regular basis to a list of subscribers, customers. The primary purpose of an email newsletter is to build upon the relationship of the company with their customers/subscribers.
Transactional emails are usually triggered based on a customer’s action with a company. Triggered transactional messages include dropped basket messages, purchase or order confirmation emails and email receipts.
The primary purpose of a transactional email is to convey information regarding the action that triggered it. But, due to its high open rates (51.3 percent compared to 36.6 percent for email newsletters), transactional emails are a golden opportunity to engage customers; to introduce or extend the email relationship with customers or subscribers, to anticipate and answer questions or to cross-sell or up-sell products or services.
Many email newsletter software vendors offer transactional email support, which gives companies the ability to include promotional messages within the body of transactional emails. There are also software vendors that offer specialized transactional email marketing services, which include providing targeted and personalized transactional email messages and running specific marketing campaigns (such as customer referral programs).
Direct email involves sending an email solely to communicate a promotional message (for example, an announcement of a special offer or a catalog of products). Companies usually collect a list of customer or prospect email addresses to send direct promotional messages to, or they can also rent a list of email addresses from service companies.
Comparison to traditional mail
There are both advantages and disadvantages to using email marketing in comparison to traditional advertising mail.
Email marketing (on the Internet) is popular with companies for several reasons:
- An exact return on investment can be tracked (“track to basket”) and has proven to be high when done properly. Email marketing is often reported as second only to search marketing as the most effective online marketing tactic.
- Advertisers can reach substantial numbers of email subscribers who have opted in (i.e., consented) to receive email communications on subjects of interest to them.
- Almost half of American Internet users check or send email on a typical day, with email blasts that are delivered between 1 a.m. and 5 a.m. outperforming those sent at other times in open and click rates.
- Email is popular with digital marketers, rising an estimated 15% in 2009 to £292m in the UK.
A report issued by the email services company Return Path, as of mid-2008 email deliver-ability is still an issue for legitimate marketers. According to the report, legitimate email servers averaged a delivery rate of 56%; twenty percent of the messages were rejected, and eight percent were filtered.
Companies considering the use of an email marketing program must make sure that their program does not violate spam laws such as the United States’ Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM), the European Privacy and Electronic Communications Regulations 2003, or their Internet service provider’s acceptable use policy.
Opt-in email advertising
Opt-in email advertising, or permission marketing, is a method of advertising via email whereby the recipient of the advertisement has consented to receive it. This method is one of several developed by marketers to eliminate the disadvantages of email marketing.
Opt-in email marketing may evolve into a technology that uses a handshake protocol between the sender and receiver.This system is intended to eventually result in a high degree of satisfaction between consumers and marketers. If opt-in email advertising is used, the material that is emailed to consumers will be “anticipated”. It is assumed that the consumer wants to receive it, which makes it unlike unsolicited advertisements sent to the consumer. Ideally, opt-in email advertisements will be more personal and relevant to the consumer than untargeted advertisements.
A common example of permission marketing is a newsletter sent to an advertising firm’s customers. Such newsletters inform customers of upcoming events or promotions, or new products. In this type of advertising, a company that wants to send a newsletter to their customers may ask them at the point of purchase if they would like to receive the newsletter.
With a foundation of opted-in contact information stored in their database, marketers can send out promotional materials automatically—known as Drip Marketing. They can also segment their promotions to specific market segments.