Direct E-mail Marketing for Cellular Retailers

Marketing to Current and New Users

Direct e-mail marketing is quickly becoming one of the most effective forms of marketing. Due to the low deployment costs of launching an e-mail campaign, direct e- mail marketing is an attractive tool for cellular/wireless retail businesses. By using today's Customer Resource Management (CRM) technology to leverage their network of contacts, leads, and existing customers, and by taking advantage of the personalization and segmentation that e-mail marketing offers, cellular retail organizations of all sizes can achieve measurable results while increasing profits and customer loyalty.

With the saturation of the maturing cellular market, the once plentiful brand-new customer activations are leveling off. A new customer for one retailer means a lost customer for another. Cellular retailers now, more than ever before, must optimize their customer retention efforts by finding new ways of keeping the lines of communication open.

Marketing data indicates that it costs at least five times as much to attract new customers as it does to keep existing customers. This means that, while retailers have to spend more time and money per new customer, the use of cost-effective methods to help manage and retain their existing customer base helps to increase their overall revenues.

By implementing permission-based (or opt-in) e-mail campaigns, cellular retailers can keep costs down while they effectively maintain and enhance their current client base by providing targeted newsletters, offers, informative tips, and updated product information.

A recent study shows that 55% of consumers currently receive permission-based e-mail from retailers.¹ Consumers are becoming more comfortable with e-mail marketing, and as a result, an increasing percent of consumers are likely to not only view a direct marketing e-mail, but also, more importantly, actually make a purchase in response to that e-mail.

Consumer acceptance of e-mail marketing provides a great opportunity for cellular retail organizations. However, e-mail campaigns should not be developed without first knowing who the recipients are. By using CRM software to properly analyze customer data, cellular retailers can create personalized and targeted e-mail campaigns that cultivate customer relationships and increase sales.

Why E-mail?
Research shows that customer retention e-mail campaigns account for the greatest share of permission-based e-mail marketing spending.²

In the US alone, 88% of adult Internet users have personal e-mail accounts.³ Chances are that most cellular customers also have a personal e-mail account. It is now commonplace for there to be an e-mail field on just about every type of subscription or registration form. Consumers have come to expect a certain level of e-mail from various service vendors, from utility companies to phone companies, and now cellular retailers. Whether it is in the form of customer service, order confirmation, newsletters, or special offers, e- mail has become an accepted form of communication between businesses and their customers. In fact, a recent study by the Direct Marketing Association shows that close to 50% of consumers would like e-mail to replace all other types of marketing.⁴

Is it SPAM?
The first question any business should ask when creating a direct e-mail marketing program is "Can our e-mail be considered SPAM?" Even though it has been over two years since the CAN-SPAM Act went into effect, 81% of e-mail marketers responding to a WebSurveyor poll said they were unaware of the CAN-SPAM Act's requirements and penalties.

The CAN-SPAM Act's goal is to stem the tide of SPAM. When developing an e-mail marketing campaign, it is necessary to be fully compliant with the CAN-SPAM Act. The Act dictates that e-mail recipients for direct e-mail marketing must opt-in for the initial emails. However, these opt-in rules are different in regards to customers who have a prior business relationship with a vendor, such as a customer and their cellular retailer. For these recipients, the Act takes an opt-out approach, allowing transmission of otherwise unsolicited e-mail from the vendor until the recipient asks for the mailings to cease. Nevertheless, the recipients may still consider these e-mails SPAM if they did not specifically opt-in. To ensure that only customers who want to join an e-mail program are added to the recipient list, CRM software used by the cellular retailer should not automatically opt-in all customers.

Consumers tend to maintain consistent views as to when e-mail is SPAM. While consumers may frequently sign up for e-mail newsletters or special offers, the frequency and relevancy of the e-mails will often determine if they delete the e-mails or create rules dumping the e-mails into a bulk folder.

In addition, if consumers feel e-mail marketers are deceiving them, they are likely to tag those e-mail messages as SPAM even if they willingly opted-in to receive e-mails. This can be hard to track, since the majority of e-mail users simply delete the e-mail messages as opposed to going through the trouble of unsubscribing.

Effectiveness — ROI
By using CRM software tools, cellular retailers can easily measure the effectiveness of their e-mail campaigns. Modern CRM software provides the methods for tracking, analyzing, and optimizing e-mail campaigns to get the highest return on investment. According to Doubleclick's 2004 Consumer E-mail Study, 73% of consumers have made a purchase as a result of e-mail, and 59% have redeemed an online coupon offline. The same study found that customers responded the most to permission-based e-mail containing content based on specified interests (72%), while 68% cited relevance. So, the effectiveness is directly tied to who gets the e-mail, and whether the information in the e- mail is relevant to the recipient.

E-mail marketing consistently provides an overall return on investment (14.2%) that is higher than other methods of advertising. ⁵