The Messaging Times

One of the benefits of working with a company whose products are used in over 160 countries by individuals and organizations of all types and sizes, is that you get to talk to some really interesting people. Recently, I talked to the Harlem Globetrotters and a guitarist for the Oak Ridge Boys, both GroupMail customers.

More often than not, the questions come from our not-so-famous (but equally important) customers, like one gentleman who asked if GroupMail could send messages to a list of six million email addresses that he had acquired [yesterday]. Of course, my first inclination was that this list of six million was acquired by some means other than opt-in, permission marketing. I explained that technically, the software allows users to create groups of an unlimited size, but that processing messages to such a volume of recipients would necessitate a robust mail server among other things. It turns out, he wanted to just send them through a free mail server like Hotmail without spending any money on anything but the software.

For the sake of all of us, I dissuaded him.

Another call was a bit more realistic in scope. A woman had an opt-in list of 5,000 recipients and wanted to use GroupMail to send personalized HTML newsletters to her list on a monthly basis. Her ISP (one of the big ones) has an email sending policy that prohibits customers from sending more than 200 messages per day through their STMP mail server. They also block Port 25 so GroupMail’s Direct Send mode wasn’t an option. Bulk Send mode doesn’t allow personalization, so that wasn’t an option for her either. I explained that GroupMail or any other desktop email marketing software doesn’t circumvent the email sending policy of her ISP. I suggested that she:

1. Contact her ISP to see if they have a business account that allows more messages to be sent each day (Comcast, for example, allows residential customers to send 1,000 messages per day while their Business customers can send 24,000 per day);
2. use a secondary outgoing mail server, like AuthSMTP, to route her messages through; or
3. acquire a web hosting company who offers full SMTP services and process your messages through your domain-hosted server. Sometimes, domain-hosted SMTP servers are more liberal with their email sending policy than large ISPs

Again, she didn’t want to spend any money on sending her messages out.

As your email list grows, so does your budget. While email remains to be the most cost-effective method for communicating directly with your prospects and customers and provides the best ROI; it’s not free. Aside from the costs required for email marketing software and access to a supporting outgoing mail server, effective email marketing requires time and effort on list maintenance, design, testing, delivery and measurement.

Effective email marketing doesn’t have to be expensive. But it certainly isn’t free.

Update: Seth Godin discussed another cost of email marketing today in his post, Friction

Email marketing enjoys the best Return on Investment (ROI) of any online marketing channel. In 2007, the average ROI for email was around $49 dollars for each dollar spent. In 2006, it was around $52 and in 2005 it was as high as $57 on average. While the ROI for email seems to be dipping year after year, it continues to be a reliable earner and a solid investment.

But why is the ROI dipping year after year?

Spam could certainly have something to do with it. The increase in email filtering systems and other anti-spam mechanisms make it more difficult to get messages delivered to inboxes today, affecting delivery rates. And when delivery rates are affected, so too are opens, click-throughs and conversions. But there is another reason why the average ROI in email isn’t moving in the other direction.

It’s too easy.

And when something is too easy, we often tend not to work hard at it. By taking the easy road and continuing with the batch and blast mentality of the 20th century, we fail to capitalize on the opportunity that email marketing offers. By not investing adequate time and resources in developing effective email marketing strategies and practices, we are accepting sub-par performance.

Stephanie Miller discusses how our complacency with email marketing today can lead to problems in the future – not only in terms of ROI, but with our brand, reputation and trust.

“…Here’s the challenge. We send out a message, we get revenue. That’s good! But that isn’t the end of the story. Sending out messages that are irrelevant to most of your file has other costs. Look at your unsubscribe rate. Check the complaint rate (subscribers clicking the “this is spam” button). Both will rise when you send irrelevant or too frequent messages. The cost to replace these subscribers and maintain your file accuracy will cut into that incremental boost. Plus, in every case we’ve seen, the non-responder rate (subscribers with no opens or clicks) also goes up dramatically.

It’s not so hard to see why. When we abuse the trust that subscribers give us and send boring messages or more email than could possibly be relevant, subscribers tune all our messages out. They may not actually unsubscribe or complain to the ISPs, but they “emotionally unsubscribe.” They unsubscribe with their delete button. These subscribers are now lost to us.

Add up all that collateral damage, and your ROI may be much less or even negative…”

continue reading

There’s no reason that your email marketing ROI isn’t $85 for each dollar spent. Just like other benchmarks, you aren’t bound by annual ROI averages – unless you accept them as good enough.

Last year, I wrote an article about different metrics that are used to measure the effectiveness of email marketing campaigns. I stopped short from discussing how to track conversions using web analytics tools.

“…One thing that all marketers share is their penchant for measuring things. How many people responded to a certain creative campaign? Did more people click through on our email newsletter after we changed from HTML to text? What was the conversion rate on our new landing page? The bottom line is that measuring the results of marketing campaigns is important; and not just to marketers.

Here are three different measuring sticks that you can use to keep track of how effective your marketing campaigns are, from initial click to ultimate conversion…” continue reading

Russell McDonald from iMedia Connection picks up where I left off by explaining more specifically how web analytics tools can be used to provide relevant measurements for the conversion activity of your email campaigns.