WHITE PAPER
120 billion
number of emails sent Email Marketing:
worldwide on a daily
basis.
StrongMail (2008)
Lead Generation Strategies
Email has come a long way.
A few years ago, email was an unsophisticated form of electronic
scribbling. Today, it’s an advanced marketing communication tool
that generates business leads through a customer relationship
management (CRM) system.
A CRM lead generation system generally has three components:
Technology: an email database and system to track
messages.
Design: a layout that captures reader interest.
Content: information that sustains awareness by adding value
through knowledge.
The technology required to operate an email lead generation
system is affordable for almost any business. Virtually all of the
software required to build and deliver an email marketing
campaign is available at a low cost. In some cases, the basic
components can be obtained free of charge.
INFORMATION IS THE CHALLENGE
For small and medium size enterprises (SME), technology is no
longer the barrier to email lead generation techniques. The
challenge for SMEs is accessing information: how to quickly
design an email system that manages customer contact and
deliver relevant content that keeps your company “top of mind”
during the customer’s sales cycle.
This white paper addresses those challenges. Written for SME
60% business leaders considering the benefits of lead generation
through email marketing, this report summarizes research findings
of business decision related to five critical areas:
makers say Internet
and email are the best
ROI
ways for advertisers to
reach them. Key Concepts
Jupiter Research Benchmarks
(2007) Design
Content
Page 1 Property of Rob Whyte Communications. All rights reserved. Copyright 2008.
ROI
6.5% Email marketing is a significant and growing industry.
of total marketing
budget spent on email In 2007, email marketing in the US was a $3 billion industry. 1
marketing by B2B Sales attributed to email marketing in that year were estimated to
firms. be $21.9 billion. 2 By 2011, combined consumer and B2B sales
DMA (2006) are expected to reach $37 billion.3
ROI estimates indicate the possibility of robust returns. In 2003,
one dollar spent on email marketing was estimated to generate
$15.50 in sales revenue.4 Four years later in 2007, the ROI on
one dollar of email marketing investment was $48.29 in sales.5
The cost of generating sales is another perspective on the value
of email marketing. One research company estimated the
average cost per online retail purchase through email was $7.6
This cost is lower than other online channels such as:
$71.89 for banner ads
$26.75 for paid search
$17.47 for affiliate programs
KEY CONCEPTS
Four variables, sometimes called metrics, measure email
performance and effectiveness.
Delivery Rate
The number of messages received divided by the number of
messages sent.
Open Rate
The number of opened emails divided by the number of
messages delivered. A “measured” open rate counts
34% messages that contain tracking code. Text-only messages
cannot usually be tracked because they do not contain this
increase in sales code. Image filtering – commonly used to remove spam – can
generated by influence this count by blocking the tracking code.
customers who
subscribed to an email Click Through Rate (CTR)
newsletter.
MarketingSherpa The percentage of recipients who opened a message and
(2007) clicked on a link inside an email. Two methods are used to
calculate this figure. One way to measure the CTR is to count
the number of people who clicked on a link divided by the
Page 2 Property of Rob Whyte Communications. All rights reserved. Copyright 2008.
number of people who opened an email. The second method
counts the number of people who received an email as the
basis for the percentage.
100
number of emails Conversion Rate
typically received per
day by business The number of email recipients who completed a “call to
people. action” divided by the number of delivered emails. A call to
Radicati Group action could be a purchase, a subscription or a customer
(2005) phone call.
BENCHMARKS
Table 1 summarizes performance data collected by a Canadian
email service provider for the first quarter of 2007. These data
show messages sent from retailers experience higher open and
click through rates than B2B emails. Many factors could account
for these differences, including the sheer volume of email that
circulates in the business community on a daily basis.
Table 1
Email Performance Statistics: 2007 7
CTR CTR
Delivery Measured
Sector (% of (% of
Rate Open Rate
opened) delivered)
B2B 95% 25% 13% 3%
B2C 91% 35% 20% 7%
Canadian open rate and CTR data are generally consistent with
US figures. One American email consultant, for example,
suggests that a 20% open rate with a CTR in the range of 4% to
5% is an effective email campaign.8
Broad statistics, like those presented above, present a snapshot
of what happens to North American marketing email. It’s an
incomplete picture because these data do not reflect the variation
in email performance that exists between different types of
business activity.
90% Chart 1 summarizes open rate and CTR figures for seven
of email reaching industries.9 Based on these 2008 data, we learn that:
corporate servers is
spam. Email from the manufacturing (41%) and healthcare/insurance
Nucleus Research (39%) sectors had the highest open rates.
(2007)
Page 3 Property of Rob Whyte Communications. All rights reserved. Copyright 2008.
Click through rates were highest for email from manufacturing
(8.5%), healthcare/insurance (5%) and education (4.9%)
industries.
32-60%
increase in open rates
by adding the company Chart 1
name in the subject US Email Open Rates and CTRs by Sector: 2008 10
line compared to
1%
messages without Technology 13%
branding. Real Estate
3%
21%
Jupiter Research 4%
(2007) Consulting 22%
5%
Education 26%
Financial Services 2%
26%
Healthcare/Insurance 5%
39%
Manufacturing 9%
41%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Open Rates Click Through Rates
DESIGN
Email design influences open rates. Messages that incorporate
basic industry practices can increase the probability recipients will
receive the message, open it, read it on a regular basis and take
action by following through on the call to action. A quick summary
of just a few critical design features is presented below.
Subject Line
35% of readers open email because of the information in the
subject line.11 To produce effective email, the quality of writing
in the subject line is important. So too is length. Some email
viewers truncate lines over 55-65 characters. If a subject line
appears garbled, readers may delete the message before
reading it.
Width
64% 500 to 600 pixels is a common width for email messages.
of business leaders Narrower than a traditional web page, this range is a
read email on mobile compromise that accommodates email previewers (like
devices like Outlook) and mobile devices (like Blackberries). The objective
Blackberries. of a narrow design is to make your message accessible to a
MarketingSherpa wide range of email readers.
(2007)
Page 4 Property of Rob Whyte Communications. All rights reserved. Copyright 2008.
Call to Action
40% This statement tells readers what to do next, if they wish to
proceed. A clear, action-oriented button can increase click
of small businesses through rates. One company found that minor word changes
execs want "how-to" increased click through rates 4% by changing the text from
content in their email. “Continue to article” to “Click to continue”.12
Bredin Business
Information (2007) Other Considerations
Email service providers recommend design features to
minimize the risk of being classified as spam, including these
examples.13
Red font, exclamation marks and frequent capitalization
are design features that may trigger Spam filters.
“Free, Act Now and Limited Time” are words and phrases
that look like spam.
Provide readers with an opt-out option on mass emailing.
It’s a professional courtesy and a legal requirement.
CONTENT
Creating a relevant message for your readers is critical. If the
material you send is not interesting or fails to offer perceived
value, it’s difficult to imagine why customers would choose to read
your messages or remain active on your email database. Three
content strategies to create reader interest are personalization,
segmentation and white papers.
Personalization
Email with the recipient’s name in the message creates a positive
first impression. For batch emailing, dynamically adding each
recipient’s name is easily accomplished with a moderately
sophisticated database.
Segmentation
26% Segmentation means you deliver information tailored to different
of small businesses groups. A real estate agent, for instance, prepares a report about
execs want strategy the local office space market. This information might interest
and leadership content commercial clients but holds little value for residential customers.
in their email. A segmented email strategy separates the agent’s database into
Bredin Business commercial and residential clients and sends each group a unique
Information (2007) report relevant to their interests.
Page 5 Property of Rob Whyte Communications. All rights reserved. Copyright 2008.
Information. Tell. Don’t sell.
To maintain a long-term dialogue with customers, white papers
81% are regarded as an effective marketing tool because they add
of U.S. executives value through knowledge. A well-researched and written white
subscribe to industry paper typically has these features:
email newsletters for
product information A narrowly defined topic written for a specific audience
and business Problem-solving focus
intelligence. Provides objective information supported by research
Wall Street Journal Emphasizes knowledge over persuasion
(2007) Provided as a free service
SUMMARY
Perhaps for the first time in modern history, sophisticated
communications technology can be accessed by businesses,
large and small. Technology has leveled the playing field so that
the SME sector can access marketing tools traditionally priced for
corporate budgets.
An effective CRM program that generates business leads through
email needs to be integrated within, and supported by, a broader
marketing campaign. This includes a website to act as a landing
page, resources to track data and people to act upon the wealth of
available information. Clearly, technology is part of the answer,
but it’s not the complete solution.
Meaningful content that engages customers is critical to the
success of any CRM program. It adds value through knowledge,
builds credibility and gives potential customers a reason to keep
your firm “top of mind” until they are ready to make a purchase.
ABOUT THE RESEARCH
This white paper was written and published by Rob Whyte
67% Communications. On the web at www.rwhyte.com.
of survey
respondents said This document may be distributed freely. However, the contents
email boosted may not be changed in any way – in whole or in part - without the
sales through other author’s written consent.
channels.
Datran Media,
"Marketing & Media
Survey" (2008)
Page 6 Property of Rob Whyte Communications. All rights reserved. Copyright 2008.
REFERENCES
1
Bill McCloskey, EmailInsider (2007).
www.emailstatcenter.com/ROI.html.
2
Direct Marketing Association (2007)
www.emailstatcenter.com/ROI.html.
3
Direct Marketing Association (2005).
www.emailstatcenter.com/ROI.html
4
Winterberry Group (2004). www.emailstatcenter.com/ROI.html
5
“Email Marketing Paying Off for Marketers in 2007.”
www.messagesystems.com/press/080707.html
6
“The State of Retailing Online. 2007.” Shop.org.
7
“Email Trends Report: Q1 2007.”
www.cardcommunications.com/expresso/reports/Q1_07_trends_car
d.pdf
8
Internet Retailer (2006).
www.emailstatcenter.com/ResponseMetrics.html
9
Bronto Software. Data based on 169.7 million sent emails as of July
13, 2008. http://bronto.com/knowledge/statistics#
10
Ibid.
11
“Subject Lines.” http://emailstatcenter.com/SubjectLines.html,
Jupiter Research 2007.
12
“Dirty Dozen: Email Newsletter Mistakes Nearly Everyone Makes.”
MarketingSherpa, 2008.
13
“Designing, Coding & Delivering HTML Email.” MailChimp.
www.mailchimp.com/resources/html_email_design.pdf
Page 7 Property of Rob Whyte Communications. All rights reserved. Copyright 2008.