October 01, 2008

E-Mail Marketing Gone Wild

If you don't subscribe to Chad White's Retail E-Mail Blog, you have an opportunity to learn more about e-mail marketing. Where else are you going to find out what the popular retailers are doing with their e-mail marketing programs?

During the past two weeks, I looked through his "subjectivity scanner", trying to calculate the percentage of e-mail subject lines that focus on price/discounts/sales/free-shipping/promotions. Here's what I found:
  • 61% of the e-mail marketing messages focused on price, discounts, sale, free shipping, bogos, or promotions.
  • 39% focused on merchandise, disproportionately skewed to L.L. Bean, Lands' End, and Williams Sonoma.
Folks, how do we ever expect our customers to take us seriously, when six in ten messages tell the customer NOT to pay full price? We get upset that Wall St. drank the easy money kool-aid, now take a look at our own behavior?

E-mail marketing is fundamentally broken. We are poisoning our customer files, teaching customers to never pay full price anywhere. Why should a customer pay full price from the catalog when they can wait for the perfect promotion from an e-mail campaign?

Merchants should be taking us to the woodshed for a good 'ole fashioned paddlin'. We're poisoning their products with our endless quest for inflated open rates, click-through rates, and conversion rates. Heck, why don't we simply offer the merchandise for free???!!!! That would drive the metrics in the right direction, wouldn't it?

Until we, as an industry, stop trying to get an easy buck all in the name of best practices and inflated metrics, we won't be viewed by peers or customers as offering a respected marketing channel.

7 comments:

  1. If you're one of the 4 in 10 trying to maintain a healthy file, you are at the same time fighting for the attention of customers who are receiving the other 6 messages that dilute file value. At that point, it's not about trying to boost email KPIs, but about not getting lost in the sea of sale messages and losing actual sales, that drives you to jump on the discount bandwagon. How do you resist that temptation?

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  2. What about seasonality? We try to keep our email product focused but in off seasons and economic downturns we see revenue down dramaticaly. There are only 3 kpi's I watch. Unsubscribe, Abuse complaint and Revenue and only 2 of the 3 do I want low...

    ReplyDelete
  3. Jim, let me turn the argument a bit. I titled this post "E-Mail Marketing Gone Wild", and out of nowhere, I have all of this traffic that I wouldn't normally have. I didn't say "Save 20% Off Of Any Of My Books And Free Shipping If You Read This Article". I found a way to write a subject line, coupled with semi-interesting content, that caused increased readership of this article.

    I do not discount my Multichannel Forensics projects. I have a set price, and 6 in 10 folks who ask for a proposal walk away from me after seeing the price. Folks tell me that my competitors offer them discounts. Good!

    You suggest that you're trying to not get lost in a sea of sale messages, that you're trying to not lose actual sales. Do you have metrics that tell you that your e-mail messages are getting lost? Maybe you do. And without a doubt, you lose sales if you don't offer discounts and promotions. Does your CEO actually want those sales? If that is the strategic direction of your CEO? Did your CEO ever tell all employees that s/he wants your brand to be a leader in the world of discounts and promotions? If s/he said so, then have at it. I would seriously question, however, why your CEO has not lowered all prices by 20% automatically, if this is a viable strategy.

    Fred, there's no reason you cannot do promotions as part of a seasonal strategy --- like doing free shipping during the Holiday season. There's one thing in being strategic, offering a promotion as part of a holistic corporate strategy. It is another thing to offer promotions simply to artificially increase revenue.

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  4. Glenn7:13 PM

    Kevin,
    Ordinarily, I'd agree with you but what you call "artificially increase revenue" some of us marketers these days call doing whatever it takes to get very dour customers to reach into their pockets and take out their wallets. Unfortunately, many retailers have been forced to do some drastic things these days to get their register to ring. (I've seen 20% off & Free Shipping emails from retailers the past few months who in better times wouldn't have been caught dead hitting the email send button on any type of promotion.)

    Did you see the car sales figures yesterday? Nearly all automobile manufacturers are reporting 33% less sales on 50% less showroom traffic. Even with employee pricing promotions, it's hard to sell product when people are not remotely interested in buying.

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  5. There's no doubt that marketers use discounts and promotions to clear merchandise, when faced with -20% comps vs. last year. Heck, I've done it, too, the toolkit to move merchandise isn't that big.

    But I did the same study eighteen months ago, when things weren't so dire, and the split was 50% / 50%.

    E-mail, as a marketing channel (not all marketers at all companies), is grossly skewed toward propping up terrible $/e-mail numbers with discounts and promos. We wonder why catalog response rates are so awful --- they should be awful when you get two e-mails per week from a brand offering to give you perks to buy today.

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  6. Anonymous1:23 PM

    I wholeheartedly agree with you Kevin. Mine that data, people! We shoot ourselves in the foot when we train customers who would buy from us anyway to buy from us only when we offer discounts. Especially in these lean times, we should be using our data to target people with an offer that they'll actually respond to, rather than just widely casting the discount net and hoping we'll catch some revenue. Besides, being smart is good for morale. I felt so relieved when my management seemed to finally "get it" and throttle back on the knee-jerk discount reaction to lower sales figures. In the long term, the smart things that we do to bring customers in will pay off the most.

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  7. Of course, my goal is not to pick on the e-mail marketing manager --- my goal is to help the Executive team think about the strategic place e-mail marketing holds --- sort of like what you point out in your comment.

    Too often, it is the channel that is used to make a quick buck.

    ReplyDelete

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