Email marketing is not all about acquiring new customers

E-mail marketing is not all about acquiring new customers through the e-mail channel. Especially if you are running an online business, it makes sense to prospect in the same medium where you are selling.

However, as we’ll see in this section, one of the most profitable ways to utilize e-mail is in your communications with an existing e-mail database in other words, your own house list. Acquiring new customers can be expensive some estimates gauge the costs at roughly five to twelve times higher than they are for keeping existing customers. And this definitely applies to the world of e-mail. With acquisitions opt-in lists now averaging $150 to $350 per thousand and above (which equals $.20 to $.40 per name and higher), it is easy to see how prospecting particularly through the e-mail channel is so much costlier than retention e-mail efforts. Therefore, the goal should be that once you have those precious customers in your site, you must constantly find ways to keep them. You must demonstrate that your products and services have true value for them: so much value, in fact, that your customers will buy from you again and again over time.

CREATING AN OPT-IN HOUSE LIST

In order to be able to communicate with your house list and market to it using retention efforts that we’ll see here, you need to make sure that all members have opted in. As we saw in Part One, the main way to do this is to be crystal clear in all your offers and e-mail address collection areas. Suppose you run a prospecting promotion, for instance, and you drive people to sign up for a free somethingor- other, or you offer a sweepstakes entry of some kind. If you plan on promoting to those new registrants/subscribers/trial members, etc., through e-mail, you must make it clear from the very beginning that this is indeed what you’re going to do. If you are collecting those new leads and customer information on site, be sure to post a disclosure that states your intentions. And don’t try to hide it: make it stand out.

RETENTION MARKETING

A retention marketer’s job includes using e-mail to accomplish the following:

• Conversion. When a prospect becomes a registered lead or a customer meaning said prospect has either registered for a free offer of some kind or purchased her first product from you she becomes a member of your house file. Chances are good that if she purchased something the first time out, the purchase was based on a loss leader, or “feeder product,” type of offer. This is an offer designed to convert new customers through a truly outstanding offer, however unprofitable it may be to the advertising company. While it is nice to have a database of leads and customers, you’re not going to make any money with this group of people unless you convert them into true full-price paid customers. Customer specials, discounts, and newsletters can help accomplish this.

Converting leads into customers takes time. It doesn’t happen immediately; however with patience and care, the efforts make the wait worthwhile. A typical scenario is as follows: New leads are brought in the door (added to the house file) using opt-in acquisitions methods. A free offer of some kind is usually inducement enough to get people to sign up, thereby opting into the promoter’s database. Subsequent e-mail efforts are sent to this list of leads at regularly planned intervals. Over time, a certain percentage of these recipients will “pay up.”

• Cross-selling. Once a new customer or registered lead is added to the file, and especially when she has converted, the time is ripe to get her to purchase other products or services. For example, an online bookseller can promote to the paid-up customer database through regular communications. Whether those communications include a regularly scheduled newsletter or special offer announcements, the bookseller can promote its other books within them.

• Up-Selling. Many businesses offer products and services across a wide range of categories, fees, and prices. Those who do may include up-selling efforts as part of their retention programs. For example, a cruise line may start off by promoting a feeder or entry-level product such as a three day cruise. Once those customers have purchased and opted in, the cruise line may promote a more expensive five-day cruise. From there, each successive promoted product gets more expensive . . . more luxurious . . . more valuable. Each also becomes more profitable to the seller as price goes up and marketing costs go down. Therein lies one of the beauties of up-selling.