Tuesday, January 29, 2013
Are Your ROI Expectations Overheated?
Is adding email marketing to your media mix the cure for the ever-higher costs of print and postal service delivery? Definitely maybe. But first temper your expectations with a dose of reality: test, test, test.
An old-school direct mail catalog company recently asked for a cost estimate to implement email marketing to nursing professionals. The owner complained that print and postage costs are a #1 Excedrin headache. So in his perception email marketing in place of print catalogs was the cure.
Not so fast, buster. Is email really cheaper?
All things being equal, yes. All things are rarely equal between snail mail and email marketing.
First, the list.
Over the course of 35 years, this company established relationships with state licensing boards nationwide for the professionals who were its prospects. All the prospect data - name, address, phone, etc. - are gleaned from state licensing records. In terms of currency and accuracy, these lists are pure gold. What's more, most of the lists are free.
Email not so much.
Email addresses change more often and routinely contain more incorrect data due to misspellings or transpositions. A bounce rate of 20 to 25 percent is more normal than not. Moreover, due to aggressive spam filtering, email is also more likely to go awry, making delivery less reliable. This will take a big slice out of response rates compared to snail mail.
Email is also subject to more restrictions than snail mail.
Google or other Internet Service Providers (ISP) automatically shut down an email account when it sends a high volume and velocity of email in one day. This means that email requires specialized handling by a company such as Constant Contact, Emma or Lyris. While the cost per thousand of email specialists is no where close to that of print mail, it quickly flattens the cost advantage when coupled with other drawbacks.
Spam is one of these.
Regulations require that a direct mailer have permission to email a list; prospects must opt-in. Many recipients mark email solicitations as spam even after they have opted-in. This exposes you to the risk of being shut down by either or both your ISP and or your email software provider.
Higher bounce rate. Unreliable delivery. Tighter restrictions. Higher exposure to liability. All things are definitely not equal to snail mail.
Next, response rates.
Email solicitations generally don't get the readership, thus response rates, of snail mail catalogs. the very speed and immediacy which make it cheap and attractive to a mailer detract from its perceived value by recipients. Delete. Delete. Delete.
Snail mail is tangible. It feels important (even when it's junk.) It offers the recipient flexibility and time to think; she can read it now or stash it into her purse to browse later. It speaks to her convenience and says that old school is not always out of date.
Then there's force of habit.
When your customer is comfortable purchasing from a paper catalog and trusts purchasing by phone or mail, retraining her to use a new method takes time.
Time. Money. Not equal.
When you shift your point of purchase to the Internet, you open a wealth of opportunity and unleash the potential for a whole lot of pain.
How robust is your website? What impression does it create? How does it compare to your competitors? Is point of difference clear? Is it engaging? Is it "sticky?" Is it secure? How does it relate and coordinate with your print communications? Is it visible? Is it credible? Does it inspire trust and confidence? Is it manned to field questions 27/7? How will it affect the productivity of existing resources? Will it require additional manpower?
Simply adding a new delivery method to the media mix is not going to outweigh deficiencies in your website relative to your competitors. On the contrary, it will highlight them.
The goal of every marketing mix is synergy.
When all your marketing communications in whatever medium coordinate and integrate a distinctive, memorable, extensible message, the whole is greater than the sum of its parts.The effect on ROI is exponential.
Getting there requires an investment of time, money, patience and expertise.
Lists, offers, pricing, reliable delivery, readership, traffic, clicks, conversion to sale - all the factors that contribute to profitability are measurable, easily tested, improved (or abandoned) depending on their contribution to the bottom line. Best case results can be retrofitted into existing websites or maybe the old-school website needs a complete overhaul.
Test results give you direction and confidence in next steps.
Does this mean I'm against email marketing? Not at all.
Email marketing can be highly profitable. For example, a mundane newsletter aimed at Java programmers had piss-poor response rates, but generated advertising revenues of $1 million in the first year because it was so well positioned, credible and highly targeted.
I am madly against overheated expectations.