The use of email marketing to drive customer acquisition is in significant, and terminal, decline.
Demise? Is that the right word for what’s happened to IPT? A company with a market capitalisation of £30m+ sold for £1.3m to a ‘turnaround’ venture capitalist? Demise is fairly accurate, I think.
So what does this teach us about the online space and email marketing in particular?
The first point is that email is not a customer acquisition tool. In fact it never has been, but in the early years of the media, the novelty of receiving email meant that acquisition and lead generation emails wereopened and clicked on.
However, the rise of permission marketing and opt-in hastened the decline in open and click rates. Essentially, this means that IPT’s business model was flawed from the start.
The other interesting element of the IPT story was what the company said about deliverability when its acquisition was announced to the press:
“Despite overcoming the specific delivery problems experienced in 2007, the business has been affected by generally increasingly difficult email delivery environment.”
So, IPT never solved the deliverability quandary, something the market has known for some time.
Different companies take different approaches to resolving deliverability issues. But deliverability is based on one key focus; tying business marketing needs to consumer expectations.
Any email marketer who thinks that consumers expect and deserve regular, mass email marketing will find their reputation and results flowing rapidly down the toilet.
Email marketing is a retention tool, and used cleverly it is the ‘killer app’.
If IPT is ever going to recoup even part of its losses it needs to seriously rethink its ‘raison d’être’.
Cold emailing as a core business proposition just doesn’t work because the need to flog as much data as possible is totally contrary to email marketing’s core requirements – targeting, relevance and quality.