If you’re thinking of starting a business—or already have one—Internet direct marketing can play an important role in making it grow. Whether your business is brick and mortar, click and mortar or pure e-commerce, you increasingly will be expected to build customer relationships by understanding, engaging and providing individualized service to every customer. And a powerful way for developing these relationships is personalized Internet direct marketing.
Whether it’s a timely email reminder, a suggestion for a bottle of wine for a special occasion or a prompt update of a crucial software program, customers value personalized service because it can simplify their lives, save them time and acknowledge them as individuals. For your company, a communications program that engages your customers’ interest can help to differentiate your business from your competition so you can build long-term, profitable relationships.
Six Tips for Effective Email Marketing
While delivering customized messages to each individual customer was once too expensive to be practical, the Internet has rendered the incremental cost of contact insignificant. On the Internet, contacting 20,000 people costs no more than contacting 10,000 people. And each “contact” can be personalized.
Four Stages in the Dialogue
The process of building successful customer relationships falls into four stages, which I call:
- the awareness stage — getting a prospective customer’s attention.
- the permission stage — asking for their permission to stay in touch.
- the involvement stage — when the customer demonstrates involvement with you, normally by making a purchase.
- the loyalty stage — with repeat customers who tell their friends about you.
If you’re just getting started and don’t have any customers yet, you’ll want to focus most of your efforts on creating awareness. If you already have a customer base, you’ll need to balance all four stages.
“Young companies are wise to put time and energy into gathering customer data very early on in their development,” especially customers’ email addresses, says Adrienne Down-Coulson, senior director of client services at Netcentives Inc., a San Francisco-based loyalty and direct-marketing solutions company. “Without email addresses, they’re powerless to retain those customers they’ve spent so much money to acquire in the first place.”
Ms. Down-Coulson says her firm often encounters companies that have collected huge databases of customer information, “but then are forced to spend more marketing dollars trying to acquire their email addresses—and with that incremental spend, they generally won’t get as high a response as they might have liked. People will see better results by collecting email addresses at the beginning, even if they need to provide an incentive at the time.”
Make it easy for customers to interact with your site on their first visit. Once you’ve gotten their awareness, ask for their permission to send them an occasional email. And let them know why you want to send them emails and what you’ll be sending. Finally, make it equally simple for your customers to unsubscribe from your programs. Counterintuitive? Not really. Customers are much more inclined to give you permission and start becoming involved with you if they know that it’s going to be easy to disengage if you don’t “deliver on your promises.”
A Retailer Asks for Permission
eBags, a Denver-based online luggage and apparel retailer, works hard to ensure that its customers are engaged in a relationship and aren’t just targets in a marketing campaign. As a consequence, eBags is a believer in the importance of permission-based email. “We make it clear to consumers that they have the right to grant and take away email messages at any time,” says Jon Nordmark, the company’s chief executive officer and co-founder.
eBags began developing a comprehensive, personalized e-mail marketing program early on. The company’s launch was accompanied by a program to build its customer and prospect databases and then implement an effective strategy to contact the people whose names and e-mail addresses it had collected.
For eBags, building relationships with customers via the Internet is much more cost-effective, efficient and measurable than conventional direct marketing. Andrea Butter, former vice president of marketing at Palm Inc., a Santa Clara, CA-based hand-held computer company, was the initial force behind Palm’s successful Insync Online email marketing program. In the Dark Ages—the early 1990s—of online marketing, she, too, realized the power of asking customers what they want.
“Back then—this was before the Palm Pilot came out—Palm sold add-on software packages for handheld computers like the Newton and the Zoomer,” says Ms. Butter. “Sales were so slow that I was actually able to read every single product registration card. And I was completely surprised how many customers took the time to write personal comments—about how much they liked our software, a problem they had getting hold of it or suggestions for improvements.
“It was just a treasure trove of input,” she adds. “Here were customers who actively communicated with our company, and it was just killing me that I wasn’t able to tap into that and turn it into a dialogue that would keep the customer’s positive feelings about his purchase alive.”
Today, the Internet makes such a dialogue financially feasible, even for small companies. The more customer information they have, the better. What’s important is its relevancy. Target Your Approach
A highly targeted approach brings response rates that far exceed those achieved by using “mass mailing” email messages. “We’ve seen response rates go from an average of 3 percent to 15 percent when the communication is highly relevant to individual customers,” says Ms. Down-Coulson.
Used properly, the Internet is a direct marketer’s dream come true, transforming both prospects and casual buyers into long-term, loyal customers. Yet, online marketing differs radically from conventional direct marketing. It’s no longer about the old model of “telling and selling.” If you simply think of the Internet as a better, faster cheaper way to do traditional direct marketing, you’re walking in a minefield. Privacy violations and spam accusations are a sure part of your future.
To communicate with your customers effectively, you must think service. Mr. Nordmark says that if you ask what customers want, they’ll tell you. Listen to what they tell you and use it to deliver value and convenience and you’ve begun to build a solid foundation for lasting customer relationships.
“There’s a saying that happy customers are your best sales people, and it’s true. And the best time to begin communicating with them is in the honeymoon period right after the purchase” says Ms. Butter. “My advice to entrepreneurs would be to start communicating with customers the very moment they have a customer.”
Direct customer communication and marketing should be a part of any company’s plans. Apply the same old “broadcast” tactics of yesteryear and you’ll be unpopular with your customers at best, and violating your customers’ privacy and compromising the future of your business at worst. Internalize the new rules of Internet direct marketing and you’ll be building the foundation for a thriving business.