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What kind of marketing do you want to invest in?

By Rob Drummond on Wed 20 April 2011 in Email Marketing

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

John Wanamaker, 35th United States Postmaster General

You can learn a lot from a good quote. Amazingly, the quote above is still largely applicable over 100 years after John Wanamaker first made it.

However, a shift is currently happening in marketing. While studies have suggested that less money has been spent on advertising as a whole in the last couple of years, some forms of advertising are seeing an increase in spend. What do the following have in common?

  • Email marketing
  • Social media
  • Mobile marketing
  • Pay per click
  • Banner/display advertising
  • Direct mail

They’re all data-driven media. As opposed to the old model of advertising where your efforts would be faith-based and difficult to track, each of the media listed above are traceable by a range of data.

A huge quantity and range of data, in fact. (More on that another time!)

In a depressed economy, what type of advertising do you want to invest in? Advertising where you can track your results, or advertising where tracking is expensive and hard?

Except for direct mail (which comes with a significant unit cost), each item in the list above has seen an increase in spend in the last three years. Most practitioners of these media however still operate using a faith-based approach; failing to use the data available to make profitable decisions.

(By the way, if you think social media isn’t data driven, have a look at tools such as Klout, Youtube Insights or Topsy. Additionally, big analytics players such as Coremetrics and Omniture are investing heavily in developing tools that track your social media efforts.)

Email Marketing

Email marketing has now been around for a while, and of the list above it’s probably the one you are already involved in due to the low cost of entry. The low cost of entry however, is what makes it so hard to take a data driven approach, as you don’t directly lose money by not doing so.

I’m hoping to convince you today that the cost of not taking a data driven approach to your email marketing is actually much higher than you think.

Consider the following situation.

To promote your summer promotion, you have been toying between using direct mail and email marketing. As an experienced direct mail practitioner, you are used to carefully reviewing and segmenting lists, as well as meticulously tracking results. As budgets are tight this year, you opt for an email only approach.

Because the cost of sending an additional email is almost zero, the same incentive to segment your email list just doesn’t exist. As the promotion approaches, you are in a rush to prepare and proof your initial emails. You decide to send the same emails to your entire list, and are disappointed when response rates are lower than you expected. You send a follow up email, which again fails to draw a significant response.

What went wrong?

As good as your first email was, it could never appeal to everyone on your email list. In attempting to make it appeal to more people you made the content more generic, which effectively made it appeal to no one.

In terms of a lost opportunity, your email campaign costs you a lot of money.

Taking a data driven approach to email marketing is more difficult and more time consuming; but using a little technology can be easier than you might think. For example:

  • Integrating your email marketing software to your CRM system allows you to quickly segment your email list, by parameters such as past purchase history, time since last purchase, geographic location, industry type, company size etc. All the things you would regularly use to segment a direct mail campaign.
  • Track how many emails were delivered, opened, clicks and ultimately conversions on your website. As you were able to segment quickly, you can now see which segments convert the best (are most responsive).
  • Pass email marketing actions back to your CRM system, allowing your telemarketing team to see what emails the customer on the phone has opened and clicked on, and even which pages on your website they visited.
  • Using a split test, determine which of your email subject lines deliver the greatest open rate.
  • Determine whether it is more effective to use your own name as sender, or use your company’s name?

Making good use of the data available will set your email marketing apart from anything your competitors are doing.