The UK market for email marketing solutions will be worth £148 million in 2005, up by almost 25 per cent on last year’s £120 million, according to a recent report into the subject by online information provider E-consultancy.
Until fairly recently, email marketing was seen as a cheap way of contacting a large number of prospects, but consumer and regulatory demands are forcing marketers to look at quality as much as quantity. This in turn has prompted many B2B marketers to consider whether email might be a useful component, one worth adding to their marketing mix.
However, they are rapidly discovering that selecting a system that will support high quality use of this new technology is no easy task.
In brief, there are three approaches that can be taken: a fully managed service outsourcing it all to an agency, using an online system provided by an email service provider, or a fully in-house system. Each have their advantages and disadvantages, and just picking the right partner is only the first stage in a long journey.
Pros and cons
Developing an in-house system is usually expensive in the short term since it involves acquiring expensive expertise and equipment. The upside is that ongoing future costs are lower. Todd Piett, segment manager at marketing solutions provider Unica, comments: “In general, an in-house email marketing system is best for companies that are looking to couple their email marketing with other marketing efforts. It removes the need for a lot of data migration between in-house data stores and an external database.”
Smaller companies may, however, find the upfront costs prohibitive. Those fortunate enough to have the necessary creative and database skills in-house may be able to run their own campaigns through an email service provider. They will have to pay an ongoing fee, but they will keep control of the data, the creative and the broadcast schedule, but they will avoid the investment in hardware, software and bandwidth, and they will be able to leave any IT problems to the service provider.
Often though, when getting started in a new area, it is advisable to work closely with the experts, and this is why so many companies are entrusting the implementation of their campaigns to the experts. Hiring a fully managed service provides the benefits of specialist advice and it also removes almost all upfront costs. It does however make it extremely important to select the right partner.
Not getting conned by the pros
The first stage is to develop a clear strategy. Work out what you want to achieve with your email marketing. Do you want to acquire new customers, or sell more to existing ones? How will you define success? Then audit your existing capabilities and see where the gaps lie. Armed with this knowledge you should be able to provide potential partners with a clear brief, describing your goals and the capabilities and expertise you require.
The brief should evolve throughout the selection process, and as it begins to take shape you ought to develop clearer ideas in areas such as whether your email content will use text, HTML or rich media. You will solidify ideas about data sources, about the frequency of your emails, and about the type of reporting you will require from your email partner.
It is essential to take up references. Email marketing is still a relatively new area and there are still many unscrupulous vendors waiting to take your money. There are though many more reputable providers of excellent services and it can be difficult to choose between them.
Ashley Friedlein, CEO of E-consultancy, offers this advice: “Firstly, don’t buy a system based solely on price. Secondly, the system should be a small cost relative to the amount you need to invest in list building, data cleaning, permission building, creative, planning, segmentation and so on. Too many people invest far too little in email marketing and look to a tool to somehow magically get it right for them. Thirdly, and most importantly, make sure the system you choose is easy to use, provides good reporting and analysis and integrates easily with your other systems.”
Implementation and integration
Before you sign on the dotted line you should also consider implementation, training, support and the effect of the new system on the rest of your organisation. Many marketers get excited by the potential of a new system and forget that it might take six weeks to install and then another three months to train everyone on how to use it. Also while the marketing department should be able to manage an outsourced solution on its own, the IT department will need to be heavily involved in the construction of an in-house system.
Mike Josephs, head of marketing for Sharp Systems Products Company – the business division of Sharp Electronics UK – recently selected an email system and offers this advice on implementation and integration: “The technology is always developing, so it is of paramount importance to find a supplier that is proactive in training and telephone support.
The system we selected is managed by the marketing department. As the database is externally based and runs as a separate stand alone system, our internal IT department has no need to be involved.”
The work begins
Marketers should not fall into the trap of thinking that by paying for an externally managed service they will avoid having to spend much time on their email campaigns. As email marketing has become less about quantity and more about quality of communication so it has become increasingly vital that marketers invest time and effort into the targeting, copy, and creative of their emails.
As Roberto Simi, managing director of Moonfish, puts it: “A common misconception with email marketing is that it is simply a cheap alternative to direct mail and requires very little expertise. In reality effective email marketing requires a great deal of skill and effort. Using creative, copy, effective targeting and data management to create a quality email is vital for success.”
In summary then, picking the right system to support your email marketing is difficult, and if you manage to pick the right one then the work has still only just begun. However, the fact that email marketing is growing so rapidly suggests that, if you do manage to put it together effectively, email marketing can really reap rewards, and so be worth all the effort.
Supplemental – Case study: Clifford Chance
With 29 offices in 19 countries throughout the Americas, Asia, Europe and the Middle East, Clifford Chance is the world’s largest law firm. Emails sent to its clients and prospects were in basic HTML and poorly branded. The firm was also unable to find out whether or not the email reached its target and if so what level of interest it generated.
In mid-2004 the firm bought Concep’s Campaigner, an email marketing system designed specifically for professional services firms. Mark Power, Concep’s MD, explains the benefits this has brought: “Every member of every business development department around the world is able to develop high quality email marketing. At the same time the central marketing department can build strict templates and so reinforce the brand.”
Although he is unable to reveal the cost of the package he explains that it is between £5000 and £60,000. Similarly, although he has no quantifiable results to prove the success of this project, his client, Suzanne Tarrant, Clifford Chance Corporate Identity Head, enthuses about the product, saying: “The ability to track client feedback from professionally branded emails will allow us to explore our clients’ needs further.”
