By Andy Wood, managing director, GI Insight
Today’s consumers are heavy email users and the flow into their inboxes is only increasing. In the UK alone, consumers received more than 1.7 billion emails in the first half of 2010 – up 50% from the year before – according to the most recent Direct Marketing Association email benchmarking report. This poses a problem for marketers: namely, how to capture the attention and secure the loyalty of a consumer who already receives vast numbers of emails.
The latest research by GI Insight reveals that more than half (53%) of UK consumers deem almost all the emails received from companies irrelevant to them. This is a disappointing result for email marketers, suggesting many enterprises are missing out on the opportunity to cut through the bulk of poorly targeted communications and failing to engage consumers with relevant, personalised messages. Indeed, far from generating loyalty, organisations risk driving customers away and, ultimately, losing their business.
For email to work as an effective medium for retaining and growing the business of loyal customers, analysing consumer data and using that obtained insight to inform communications is vital. The potential of email as a marketing medium is only fully realised if messages are accurately segmented, targeted and personalised. To do this, firms need to take into account customer preferences and behaviour in order to approach them at the right time, in an appropriate tone, and with the correct offer. Furthermore, marketers also need to know if email is more effectively employed in conjunction with communications through other channels for particular customers and whether a customer is, in fact, even worth investing the time and effort to pursue.
When a company fails to deliver relevant messages, most consumers will eventually unsubscribe, closing a window of opportunity and cutting off a useful avenue for ongoing relationship building. Companies must therefore ensure they analyse customer data properly and, critically, use that analysis to inform and tailor their email marketing. In doing so, firms will be able to offer more relevant and targeted promotions and incentives which, in turn, help grow a customer relationship. This equips marketers with an important route for customer retention activities and even brand building while providing ongoing opportunities to steer consumers towards more frequent purchases – and even shifting them to higher margin buys.
The good news coming out of this recent research is the proof that email is still clearly well-suited to customer management activities. Despite more than half of consumers saying marketers are missing the mark with their emails, the figures reveal that most consumers are still willing to receive email messages from firms with whom they have an existing relationship. Indeed, the survey shows that 73% of respondents have given companies they’ve purchased from before permission in the last year to email them – indicating that consumers remain willing to give brands they know and are comfortable dealing with access to their inboxes and a chance to grow the relationship with them.
When it came to cold contact from brands that consumers have no relationship with, on the other hand, the survey revealed that email is a far less welcome point of contact. Only 51% of respondents report giving firms they’ve not bought from before permission to email them in the last year. The research thus suggests that email has the greatest potential amongst existing customers and is better employed to generate loyalty and build value among those consumers rather than as a prospecting tool.
To earn and maintain the right to contact consumers via email – and, in turn, gain the chance to build customer allegiance and worth – the message is clear: companies must deliver more than a series of carpet-bomb communications and avoid the trap of sending out mail which is totally irrelevant to many. The fact that nearly three quarters of customers are still willing to receive marketing emails suggests consumers have not been terminally put off receiving messages. Indeed, so long as firms sharpen their targeting, tailoring and personalisation, email retains the potential to be an extremely successful means of generating lasting and profitable relationships with customers.