Building and growing a relationship with your customers

Email is now working as an excellent tool to build and grow relationships with customers and clients. Recently Ellen Byron of the Wall Street Journal (Nov. 23, 2005 Page B1) wrote an informative article showing how effective emails have become as a business tool for a number of retail companies. Here are some interesting facts I found helpful from the article.

Retailers are getting more effective in using email by creating messages that offer compelling and interesting information along with promotional offers. They are able to create an execute targeted campaigns that drive results. For example the article talked about how J. Crew's was able to directly boost the sales online of winter coats last year when winter struck a large part of the country and J. Crew sent out email messages highlighting their coats online. They saw sales jump up directly that day.

The article also said that the Gap is cutting back on celebrity filled TV ads. They have shifted the money to online promotions and magazines. The Gap had been spending some $26 million on ads in November and December and when they tested the effectiveness, there was not a significant increase in store traffic. Instead the Gap is moving to email because the cost is so low and there is direct tracking of use and effectiveness.

The costs of email campaigns are reported to be averaging about 2 cents per message, once you have a database and a tracking service.

Some average numbers reported indicate that the email messages work. On average consumers open 33% of the messages. They ask to unsubscribe at an annual rate of 9%, and the readers click through to your web site about 11% of the time. This information is from Forester Research and their interviews with 137 online retailers. So using the average numbers, with an email campaign the cost of getting visitor to the web site is 18 cents (Cost for 1000 messages is $20.00 and that would drive 110 visits or 18 cents per visit).

One key issue is that your messages need to have interesting and meaningful content if you are looking to grow your customer relationship. If the messages you are sending out do not have any value for customers, that is going to negatively impact your unsubscribe rate and the rate at which people just ignore your messages.

Few retailers see emails replacing catalogs. Rather they are being used to supplement the catalog and motivate quick action.

One key step is to segment your mailing database into key customer groups that have similar needs and interests so your email messages are targeted and meaningful for that segment. Also, very helpful for a number of merchants is to keep track of past purchases and use that to help refine and focus your database segmentation.

With email marketing, you have a great way to drive focused and immediate buying actions from your customers, if you know their interests and are able to deliver them relevant and interesting messages.