Email Marketing and Small Businesses: Waste of Time or Worth The Effort?

marketingprofs.com - Stop me if you’ve had this conversation before with a small-business owner:

You: “So that’s a broad overview of what we do. We can definitely help you out with whatever you might need in the email marketing space.”

Them: “Well… how much do you cost?”

You: “It really depends on what you use us for, whether it’s software, creative or something else. Do you have a budget set aside for this type of thing?”

Them: “Not really.”

You: “OK. How much money do you invest in marketing?”

Them: “We don’t really have any money set aside for that.”

You: “Oh.”

“You” are the email marketing person. You’ve made your pitch, given the 10,000-foot view of your assortment of services, and provided a cost-effective and much more financially sensible way to spend marketing dollars. “They” are the small business owner (SBO), who either has no idea about what email marketing is all about or has only a rudimentary knowledge. They have heard of email and figure they should be doing something, but they’re not sure where to start.

For email marketers, how to deal with the SBO is an ongoing challenge. I always try to be optimistic in the early stages of these talks, since it takes a lot of small pebbles to fit around the giant rocks in the sales bottle I’m trying to fill. You never know when the person on the other end of the line has the next big idea that will catch fire and, as a result, create a fanbase of information-seeking consumers.

Obstacles

In my experience, there are three main obstacles to introducing email marketing to a small business.

1. Budget

No matter who you’re dealing with, the question of cost will always be a factor. Every dollar counts when it comes to a small business, from pens to water to benefits to that arcade game you buy from the pizza shop going out of business. So the SBO often worries about the expense before the benefits.

2. Education and Experience

There is a chart that a coworker and I designed to help us classify prospects and how much of an educational investment we’d have to make in bringing them on. Featured on one axis was experience and on the other education. Some people were very experienced with email, but had no real education on what a successful campaign was. Some people were well educated, having done research on the subject, but had never deployed a campaign themselves.

For the most part, the SBO falls low on both counts, simply because email doesn’t fall high on the priority chart when you’re opening up the doors to a new restaurant. Email marketing is one of those deals that come after a Web site, unfortunately months after people have already become consumers of the product—and, with the right offer, could be easily enticed to come back. This leads to direct mail and, then, a colossal waste of money and resources.

So when you’re trying to explain paying for something that traditionally is understood as free (Hotmail, AOL, etc.), it can become difficult to get the SBO to understand the next step. In addition, when you try something new and don’t have experience, it can be a bit scary. You don’t want to err so badly that you suddenly alienate your client base, but you also don’t have to the time to fully commit to doing things the right way. How can you win?

3. Desire

The best marketers are those who want to do a great job, rather than feel like they have to do a great job. Desire will turn a good marketer into a great one, and a lackluster campaign into an award-winning one. However, most SBOs don’t desire to do great email, but feel they should be doing something because “everyone else is.”

If SBOs don’t embrace the concept, how can we expect them to pull off successful campaigns?

Surmounting the Obstacles

Have no fear, though. There are ways to get around those obstacles.

Sing to their stinginess

One of the easiest selling points of email marketing is its cost-effectiveness. Pay by the month, pay by the campaign, do whatever makes you comfortable. If they’re saying they have no money, tell them that email is the stopgap in flushing money down the marketing drain, and that if done right email will help their sink overflow. (Note: The overflowing sink isn’t a great analogy with plumbers… so try something else.)

It’s the metrics, baby!

Are they going to do ads in the local paper? Stop them. Running a series of :30 jingles on a radio station? Stop them. Letting their crazy nephew walk around town in a sandwich board? Stop… well, let them do it—and then stop them.

Paint a simple analogy: If you put an ad in the paper/TV/radio, will you know whether people keep going back to it, point to it, or tell other friends about it? With email, you can track all that and more. Know your prospects’ actions, and then cater your marketing around it. Feel free to add in the cost/benefit again, too!

Be honest

I’ve told several potential SBOs, “Just so you know, this might not work out.” Some are stunned, while others appreciate the honesty. Quite simply, there are some smaller companies that we just don’t have the bandwidth to work with… because of time, budgetary resources, or needs. They need more than we can offer at a price we can’t justify. But that’s OK. We’ll refer them to one of our partner email consultants who has more one-on-one time available.

If you’re honest and upfront with every prospect you come in touch with, that’ll alleviate any potential trust issues down the road. And trust is a huge part of any partnership that a small business encounters.

***

Helping the little guy win some battles can be a great feeling, especially when it means that you’re helping make their dreams come true.

The email marketing business is more effective and targetable than any other mass medium. And it is relatively easy to get started. So the small business owner can spend more time thinking about all these new revenues he has and less time banging his head against a wall trying to figure out why his radio ad isn’t working.

The tricky part is getting them to understand that.

Email Appending Is More Than a Process

marketingprofs.com - Email address appending has been in use since the late ’90s, and if my inbox is any gauge there’s a rebound in its use. I’ve recently received emails from catalogers, publishers, and major marketers with which I’ve done business in the past, asking permission to send me emails. And that’s the first key to successful appending, since it is meant only for existing relationships.

Most marketers have email addresses for less than half their customers and prospects. If this is the case for your company, it might make sense to explore email appending.

Let’s first look at the process, and then we’ll examine how one publisher implemented its communication plan.

 

How the Process Works

Many companies offer email appending services. The larger services have 70-90 million records with name, address information, and email address. You provide them with names and addresses of customers or prospects, and they match your file against their database.

You should use fairly tight match criteria and match on an individual-name—not on a last-name or household—level.

Match rates for business-to-business will be in the 10-15 percent range and consumer marketers can expect 25-30 percent.

Some appending companies will send the first email for you, and others will simply provide you with all the matches for you to send. The first email is called the “permission pass.”

You’ll want to wait at least a week after the permission pass to collect any bounces or opt-outs. Typically, you’ll see low opt-outs, normally in the two-percent range.

The Permission Pass

There are some mandatory elements that should be included in this email. You should explain the existing relationship, tell recipients you would like to now communicate with them via email, and give them a clear opportunity to opt out.

Many e-commerce marketers will also include a special offer in the permission pass email.

I mentioned that I wanted to use a publisher as an example. I’m a former subscriber of its publication. Its permission pass email used the simple but strong subject line “[Publication] Requests Your Permission.” That’s a great start. As the recipient I immediately recognized the publication.

The publisher’s email was all text, although it used HTML-lite and the message was easy to read and had some style. I give the message negative points for not including any graphics such, as the publication’s logo.

The first paragraph got right to the point. “As a former [Publication] reader, we respect your time and value your business. Occasionally we would like to send you email communications containing special offers & exclusive invitations from [Publisher].”

The rest of the email included a chance to opt out and a toll-free number to contact customer service. The online marketing manager signed it. I found it refreshing to receive an email signed by a person.

The First Regular Email

It is likely that some recipients did not open and read the initial permission pass. A mistake that many marketers make is to add all the names to their regular sending schedule. Those who did not read the message may wonder why they now receive newsletters and other offers.

Our publisher did not make this mistake. Above the header, in small type, its first email said: “You received this email because you are signed up to receive information from [Publication].” And, the subject line also alluded to my relationship: “Welcome Back Rate for Former [Publication] Subscribers—26 issues for $20!”

Since I’m an expired subscriber, it makes sense to try to convince me to re-subscribe. The message was in HTML, included prominent placement of a sample magazine cover, and had two calls-to-action in red to “Try 4 Risk Free Issues Now.”

The Next Six Emails

I received about two emails a week from our publisher. Each one has information above the header in small type about why I am receiving their communications.

Here’s a summary of the emails received with the subject line and comments:

1. Welcome Back Rate for Former [Publication] Subscribers—just $.77 an issue. The email was sticking to the company’s mission to get me to re-subscribe. The creative was different from my first email’s.
2. 2008 Leadership Conference Invitation. This was a third-party email from one of the company’s advertisers. At the top, the message in small type explained: “You received this email because you are signed up for special offers from [Publication] advertisers.” I was surprised that I was receiving other offers, and went back to review the initial language in the permission pass. It did mention special offers and exclusive invitations. I think the language could have been clearer, though.
3. Welcome Back to [Publication]! Get 4 Free Trial Issues. The creative was the same as my first email’s; only the subject line had been slightly tweaked.
4. “Welcome Back Rate for Former [Publication] Subscribers—26 issues for $20!” The creative was the same as email 2, with subject line changes.
5. GREENER GADGETS CONFERENCE—February 1st 2008, New York City. This was another third-party advertising email. The use of caps in the subject line is not a best practice.
6. Special offer for former [Publication] subscribers: 4 Risk-Free Issues. This email featured a new creative presentation, and the salutation in the email was personalized with my first and last name.

All in all, our publisher did a good job with the permission pass and subsequent emails. I liked the use of varied creative presentations and small changes to the subject line for the main offer. I would have preferred a clearer explanation that I would receive advertising emails. My only other comment is that the publisher cross-promote its site, e-newsletters, books, and other offerings rather than just focusing on re-subscription.