Eight Tips for Enhancing Email Opt-In
DMA E-mail Authentication Resource Directory

Small Investment In Email Marketing Creates Big Return

Despite all the time and resources that retailers are pouring into their paid and natural search programs and the efforts they're making in understanding new alternatives such as social networking, e-mail marketing continues to thrive.

E-mail remains a fundamental and highly productive marketing tool for almost all web retailers. In fact, 73% of chain retailers, catalogers, virtual merchants and consumer brand manufacturers taking part in Internet Retailer's latest monthly survey -- his one on e-mail marketing-- spend 5% of their marketing budget or less on e-mail marketing, yet just over half of respondents, 50.6%, report that 6% or more of their sales come from e-mail marketing, with 25% saying the proportion is over 11%.

Here are some more findings:

  • Virtually all of the merchants taking part in the survey --92.6%-- expect to increase their opt-in lists. Retailers also anticipate conducting more frequent, but segmented, e-mail campaigns while controlling expenses and performing most services in-house.
  • 18.4% expect to grow their opt-in lists by more than 50% within the next year, while another 25.1% will increase their lists by 16% to 50%.
  • Web merchants use e-mail to communicate frequent information updates and product promotions to their best customers-63.8% of retailers conduct up to three e-mail campaigns each month and another 25.2% conduct between four and eight campaigns. 62.8% also indicate that they've increased the frequency of e-mail campaigns in the past year.
  • E-mail marketing consultants consider an open rate of about 20% and a click-through rate of 4% to 5% to be a highly effective e-mail campaign. 26.5% of participants in the survey report open rates of 20% or more (11.2% reported 20% to 25% while 15.3% said more than 25%), while another 11.8% report open rates of 16% to 19%. 14.6% report e-mail open rates of less than 5%, with only 6.2% with open rates of 1% or less.
  • Along with relatively high e-mail open rates, click-through averages are growing. 17% report e-mail click-through rates of 16% or more, while 28.9% report click-through rates of 6% to 15%.
  • Overall 20.2% of companies in the survey report e-mail sales conversion rates of 1% to 2%, compared with 26.5% with conversion averages of between 2.1% and 4%, 14% with conversion rates of between 4.1% and 10%, and 3.2% with sales conversion averages greater than 10%.
  • 20.6% also indicate that sales conversions as a direct result of better e-mail marketing have improved by up to 5% in the past 12 months, with 7.2% reporting conversion increases of more than 10%.
  • In spite of the great measurability of e-mail marketing’s effectiveness and the focus on metrics, nearly one-fifth of respondents reported that they do not know how their e-mail marketing performs.
  • E-mail marketing is seen by most web retailers as an internal operation that can be managed without outside help—55.9% of web retailers do not use a third-party e-mail service provider. Most online merchants also operate their e-mail marketing programs with minimal staff. 46% of companies dedicate only one part-time employee to coordinate and manage their e-mail marketing programs, compared with 29.7% with one full-time employee and 21.9% with 2 to 5 employees. 76.5% of retailers also have no plans to add to their e-mail marketing staffs in the next 12 months.
  • 54.7% of web merchants segment their e-mail marketing lists and break down their opt-in names in various demographic categories.
  • 49.1% of online retailers in the Internet Retailer survey segment their lists by repeat buyers and another 42.1% segment first-time buyers. 33% segment their lists by purchase frequency, followed by 19% that segment recipients by average ticket, 14.7% by age, 12.9% by sex and 12.3% by household income. 78% also list “other,” indicating that there are many ways to break down a customer file.
  • 41.6% of all retailers taking part in the research spend less than 1% of their total annual marketing budgets on e-mail. That compares with 31.3 % that spend between 1% and 5%, 13.8% that commit 6% to 10%, 5.6% that spend from 11% to 15%, 3.8% from 16% to 25% and 4.1% with e-mail budgets that account for 25% of their overall marketing budgets.
  • A full 26.9% of retailer respondents derive 11% or more of their sales from e-mail marketing. And another 23.8% get 6% to 11% of their sales from e-mail, leaving 49.4% who report less than 5% of their total sales comes from e-mail programs.

Read the full article here (includes screenshots of the survey results at the bottom of the pages).

Source: Internet Retailer

Need help optimizing your email marketing results? Get in touch!
comments powered by Disqus