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It is frankly maddening when I hear marketers talk about how ‘valuable’ email is because it is ‘cheap’.
It says to me this marketer is likely to be banging out high frequency emails to produce orders without due consideration to the real value of email marketing in CRM terms.
To view email simply as cheap is an enormous mistake, one of monumental and, perversely, costly proportions.
There is a seismic shift going on in consumerism as high street and offline purchasing switches to online. Underlying this shift from off to online is also an on-going shift in how consumers interact with brands that they trust, through social media, mobile marketing and opt-in email.
A perfect window into this shift is the growth of email databases and income from this channel. Email is the fastest growing media channel, and we have witnessed year on year growth rates in income of anywhere between 45% and 200%.
But there is a tipping point, a watershed that a number of brands are now crossing or have recently crossed, and that is the point at which email become the cheapest cost per booking channel.
Or, to put it more succinctly, email isn’t valuable because it’s cheap, it’s valuable because these are your customers and, if you have got it right, email is the cheapest channel to drive repeat purchase.
To state the bleeding obvious, your opt-in email list is a list of your customers and/or your best prospects who have said to you “Yes, I am happy for you to contact me”. These are the people you want to invest in, where investment has a longer term value than simply the sale.
So why waste money on more expensive channels, such as PPC , when you could be investing the money in targeting people you know are interested in your products? I
One way of looking at it would be to consider if email generates customers at, say, £20 each and other channels vary from £30 to £50 then how many more customers could you generate if you invest more heavily in email and spend £30 per email order. You could take this difference as more orders and business growth.
So, if email is NOT your cheapest CPO channel, or will soon become so, my guess is you’re not using in correctly. With income from email rising, the secondary benefit for email is that costs are static, if not falling.
Organisations are moving large amounts of email to automated behavioural triggers, which are far more cost effective and provide much higher interaction because of the increased relevance provided by the behavioural data.
The outcome is a virtuous circle. Behavioural data provides greater relevance and stable if not falling email costs whilst also supporting rapid increases in income through better, more relevant email marketing. Costs per order/booking tumble.
The final outcome is that, in coming years, the most successful organisations will proactively shift orders away from expensive channels in which you cannot manage costs in the right direction, towards email. And why not? It has already cost you to recruit an opt in customer, why pay again every time they reorder…