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