February 07, 2009

E-Mail Strategy

Which of the following three strategies would you recommend to management?

Strategy #1:
  • Two e-mail marketing campaigns per week, untargeted, delivered to the entire list, no promotions or offers (THIS IS THE CURRENT STRATEGY).
  • List Size = 100,000.
  • Average Sales Per E-Mail = $0.10.
  • Average Opt-Out Rate = 0.25%.
  • Average New Subscribe Rate = 0.35%.
  • Average Weekly Demand = $20,000.
  • Average Weekly Profit = $7,000.
Strategy #2:
  • Two e-mail marketing campaigns per week, untargeted, delivered to the entire list, each with a free shipping offer.
  • List Size = 100,000.
  • Average Sales Per E-Mail = $0.20.
  • Average Opt-Out Rate = 0.20%.
  • Average New Subscribe Rate = 0.40%.
  • Average Weekly Demand = $40,000.
  • Average Weekly Profit = $9,000.
Strategy #3:
  • One e-mail marketing campaigns per week, untargeted, delivered to the entire list, no promotions or offers.
  • List Size = 100,000.
  • Average Sales Per E-Mail = $0.15.
  • Average Opt-Out Rate = 0.15%.
  • Average New Subscribe Rate = 0.30%.
  • Average Weekly Demand = $15,000.
  • Average Weekly Profit = $5,250.
Strategy #4:
  • One e-mail marketing campaigns per week, untargeted, delivered to the entire list, each with a free shipping offer.
  • List Size = 100,000.
  • Average Sales Per E-Mail = $0.25.
  • Average Opt-Out Rate = 0.15%.
  • Average New Subscribe Rate = 0.35%.
  • Average Weekly Demand = $25,000.
  • Average Weekly Profit = $5,625.
Strategy #5:
  • One e-mail marketing campaign per week, ten versions highly targeted only to the "active" e-mail list of 20,000 addresses, with free shipping offers given only to the 10,000 who like free shipping offers.
  • List Size = 20,000.
  • Average Sales Per E-Mail = $0.50.
  • Average Opt-Out Rate = 0.10%.
  • Average New Subscribe Rate = 0.20%.
  • Average Weekly Demand = $10,000.
  • Average Weekly Profit = $2,500.
Which of the five strategies would you employ? If you chose strategy #5, describe why you would choose this strategy.