How Permission-Based Email Drives Sales, Leverages Customer Relationships and Creates Powerful Brand Loyalty
By Joel Book, Director of eStrategy, ExactTarget
Executive Summary
In his critically acclaimed 1999 book, Permission Marketing, Internet marketing pioneer Seth Godin introduced the world to a new approach to marketing and customer relationship management based on the simple but powerful concept of permission-based communications. Now, five years later, as companies strive to communicate more effectively with customers and prospects, permission-based email has emerged as the marketer’s most potent and cost-effective tactic for driving sales and building powerful brand loyalty.
This white paper examines the expanding role of permission-based email in marketing and customer management operations. Moreover, it provides a framework for using this customer-centric tactic to dramatically reduce customer defection and improve profitability by keeping customers connected with the brand.
By Joel Book
Marketing, in recent years, has undergone a dramatic revolution. The days of one-size-fits-all mass marketing have disappeared. Instead, organizations have implemented and executed well-planned multi-channel marketing solutions that combine Brand Marketing and Customer Marketing strategies to deliver brand messages and product offerings that are both consistent and cohesive across channels. The results? Higher response rates. More repeat buyers. Increased revenues. And improved marketing ROI. In short, more juice for the squeeze.
Brand Marketing tactics – like print advertising, marketing events and search engine marketing – are used to create brand awareness and drive customers to a retail store or website, where they can register their product preferences and request to receive relevant information and offers. With this information, marketers use Customer Marketing tactics, such as personalized direct mail, to drive action. But increasingly, marketers are turning to permission-based email for this job.
The benefit of using permission-based email for customer marketing is its ability to finish the customer acquisition job started by brand marketing. According to Forrester Research, approximately 70 percent of the $200 billion spent on marketing in the U.S. each year goes toward building brand image and awareness through channels such as TV, radio and print advertising. Jim Nail, a senior analyst at Forrester, believes that permission-based email can “build momentum towards purchase by giving the prospect the information needed to become a customer.”
“Our research proves that consumers are using the web for information and communication,” said Nail. Once the customer has been attracted to the web site, permission-based email can move a prospect through the consideration and preference phases all the way to purchase – a task traditional marketing channels do not do as quickly or efficiently.
And as Seth Godin noted in Permission Marketing, the reason permission-based email works so well is because it “encourages customers to participate in a long-term interactive marketing campaign in which they are rewarded in some way for paying attention to increasingly relevant messages.”
How Permission-Based Email Improves Marketing Effectiveness
In today’s media-fragmented marketplace, effective marketing requires a communications strategy that drives brand awareness and customer action at each stage of the brand relationship lifecycle. In increasing numbers, organizations are deploying a multi-channel approach to keep customers connected with their brand.
An integrated multi-channel marketing strategy – as illustrated in the diagram below – aligns the business-getting process of brand marketing with the business-keeping process of customer marketing. And permission-based email is fast becoming the “linchpin solution” for integrating brand marketing with customer marketing.
Leading business-to-business and business-to-consumer marketers – including Cambridge SoundWorks, Carlson Wagonlit, Liberty Mutual, Sherwin-Williams, General Mills, Honeywell, Anthem Insurance, Cognos and Home Depot – all use permission-based email to drive new and repeat buyers. Why? Because it works.
A recent study by McKinsey & Company titled “Harnessing the Power of Email” provides compelling evidence of why permission-based email makes sense. Among the study’s findings are three important observations: 1. Email response rates are 15% vs. 1% for direct mail 2. Email costs 3 -10 cents per email vs. $2 for direct mail 3. Email generates 80% of responses within 48 hours
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