growing opt-in lists - turning web browsers into buyers

white papers Growing opt-in lists Turning web browsers into buyers Best practices to succeed “Pay-per-click”, search marketing, website SEO optimization… business owners are investing more money than ever driving traffic to their Web sites in the hope of generating sales. According to Jupiter Research the number of people shopping online is well over 64 million and increasing at a rate of 10 per cent every year... Growing opt-in lists – Turning web browsers into buyers Contents Introduction Best practises for success Challenges in building loyalty through email Conclusions About Campaigner page 3 page 4 page 8 page 10 page 11 Growing opt-in lists – Turning web browsers into buyers Introduction “Pay-per-click”, search marketing, website SEO optimization…business owners are investing more money than ever driving traffic to their Web sites in the hope of generating sales. According to Jupiter Research the number of people shopping online is well over 64 million and increasing at a rate of 10 per cent every year. More broadly, that translates into 17 plus billion dollars up for grabs during the holiday months of November and December alone. It is no wonder business owners are scrambling to gain competitive traction, by utilizing loyalty-building email marketing tactics to capture these visitors, and communicate with them in an ongoing revenue-producing way. An Intelliseek survey by Forrester Research on US consumers trust or distrust by type of advertising, found that roughly two-thirds of respondents said they trusted emails they signed up for. This confirms what many industry experts have known all along. Email marketing is a powerful relationship building tool. So how does an organization implement a successful email loyalty program? As in all email marketing endeavors, it starts with the list. The foundation of any successfully email program begins with a healthy database of customers and contacts that have granted permission to actively message them at a personal level. Without one, the handsome rewards of a successfully targeted email campaign are unattainable. According to a new study on World wide email messaging by the market research firm IDC, daily email traffic is now estimated at 60 billion. Hence, it is not hard to understand why the immediate priority for online marketers is to find relevant email addresses to communicate to and ultimately fulfill the great promise of email marketing…turning browsers into buyers. Without question, the easiest way to find relevant email addresses is to ask every consumer who visits your Web site for theirs. Simple enough, but most sites do not generate enough online traffic to drive a high volume of opt-ins. And without a sufficient volume of site traffic to capture elusive opt-in addresses to drive strong relationships between buyer and seller; business owners will lose valuable market share faster than it takes the deliverability status on an unsolicited email to bounce. So what can marketers do to generate site traffic? Channel surf Start by using as many channels out there as possible to drive online interests and grow a company database. A marketers’ push and pull tactics can range from one, many or all of the channels listed to help create a steady flow of site traffic. – Key Word Portal & USP Buys – Trade-Shows – Viral & Cross Promotion – Call Center – Customer Care – Co-Marketing – In-store POS – List Rental – Co-Registration – Direct Mail – Product Warranty Registration – Third Party Channels The data below illustrates different inbound channels available to online marketers and how effective each channel is at generating opt-ins. Channels that B2C & B2B email marketers use to generate site traffic and gather names that are ‘working well’ B-to-C Tactics ‘Working well’ B-to-B Tactics ‘Working well’ Check box on our registration/order forms Free trials/downloads 85% 83% 73% 77% 63% 68% 65% 66% 62% 66% 62% 63% 67% 44% 61% 53% 33% 59% 53% 52% 57% 47% 40% 54% 0% 20% 40% 60% 80% 100% Customer service call-ins Newsletter offer Trade events Asking offline in stores, printed order forms, catalogs Sweepstakes/contest Sales alert or product announcement offer Telemarketing Premium/free-gift with-sign-up Co-registration (check box on other sites’ reg. forms) Email appends (appending offline addresses into email) Source: MarketingSherpa, Email Marketing Benchmark Survey, October 2005 Methodology: The survey was fielded on Wednesday, October 7, 2005 to selected MarketingSherpa lists. It was closed on Wednesday, October 12, 2005 with 1,927 qualified responses. 3 Growing opt-in lists – Turning web browsers into buyers Assuming a marketer’s strategy of “reaching out” to use as many channels as possible to generate a steady flow of site traffic is successful, what next? How do marketers take the next step to capture just the right data and grow a list into an email database of loyal opt-ins that: will consistently attract interest in, build desire for, and ultimately generate repeat sales of your company services. Whether it concerns choice of mailing type like a newsletter (a critical component for gathering information) or an alert, choice of subject matter or even the most basic choice of options and frequency, on most sites the consumer is left dry. As the graph shows, consumers would like more control over their commercial online communications. So empower the browser with an active voice and in the process promote an opt-in. Best practices to success Using a combination of easy-to-execute best practice list building methods to capture anonymous visitor site data and grow a database, produces the highest percentage of positive results. % Online consumer views on greater control on merchant emails % of consumers 100% 1. Prominent call to register With the optimization of search engines driving traffic deeper into Web sites and bypassing home pages altogether in the process, it’s become more and more important that marketers make the most of capturing and collecting the anonymous visitor site data they have invested all that time and money to generate. A survey by JupiterResearch on how US marketing executives capture consumer addresses, found that 60 per cent of all opt-ins came from the online registration process. It is surprising how many companies do not take the simple step of prominently positioning opt-in requests to capture prospect data, or include email registration requests at every customer interaction point on their Web site. So never limit opt-in requests to only the home page of a Web site. Data from a recent MarketingSherpa’s study on how to get more opt-ins paints a similar picture. Eighty-eight per cent of users say they are willing to spend time answering questions about their tastes and interests online, and 25 per cent said they would spend more than six minutes filling out an online registration form. Marketers should not let that valuable opportunity slip away. Request email addresses often and in multiple locations on a site. Include opt-ins on every page and go from there. If a company is limited to one page only, always choose the first one. 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Would like control over types and frequency of Internet ads (including email) from merchant Would increase trust and confidence in merchant to have control over types and frequency of internet ads (including email) Online merchants offering users control over their email communications 22% 64% 84% Source: Ponemon Institute, January 2005 Methodology: 1,799 consumers over 18 were surveyed. 3. Strategic placement Marketers should strategically place their registration information in as many spots that make visual sense as possible. The more key spots on a Web site the greater chance a company has to collect data. Next, make sure the design attracts the utmost screen attention or potentially risk the chance to collect another email address to add to your opt-in list. Lastly, calls to action must be as easy as possible for the prospect to execute. 2. Multiple alternatives More than ever the practice of offering users control over what they receive in their mail box has become the norm. Hence, marketers must offer as many alternatives on a site as possible to give their users what they want the most...control. 4. Content When it comes to Web Content a little common sense goes a long way. So be clear. Explain in detail exactly what messaging the recipient will receive when they register. Show examples of the site’s messaging to increase a potential subscriber’s comfort level. This opens communication between potential buyer and seller and takes advantage of the opportunity to freely communicate, thus building value trust and security. 4 Growing opt-in lists – Turning web browsers into buyers A survey by Forrester Research on US consumers trust or distrust in advertising, highlights that roughly two-thirds of respondents said they trusted emails that they had signed up for. In fact, respondents only trusted personally recommended emails and communications from brick-and-mortar branded Web sites more. Below, as the data confirms, email subscribers are more interested in knowing what they are going to get in their inbox, and knowing how often it will arrive. the SSL (Secure Socket Layers) “closed lock symbol,” site and explain the visitor registration process. Leverage every chance presented to build trust, even explain what SSL means if it provides food for thought. Effect of trust on information sharing w/online merchants New online merchant relationship Trusted online merchant Email elements that encourage internet users likeliness to opt-in Bank info 28% 50% 29% 34% 30% 51% 30% 46% 35% 49% 37% 53% 38% 54% 39% 58% 40% 56% 53% 55% 57% 59% 67% 83% 72% 79% 72% 75% 79% 85% 87% 88% 82% 91% 91% 92% 0% 20% 40% 60% 80% 100% Nationality Explanation of how I control what I get and when I get it An example of the emails I may receive Summary of privacy practices Overview of their communication philosophy Personal invitation to me via email or another method Testimonials from other subscribers 0% 20% 40% 60% 80% 73% Reading interests and preferences SS# 50% Debit card # 32% Income info. 15% CC# 13% 100% Date of special event Family info Source: Truverse, October 2005. Methodology: 272 professionals responded to email invitations to participate in the study between September 23th and October 7th, 2005. It should be noted that the sampling included a very high ratio of professionals with post-graduate degrees, and is not representative of the U.S. population. However, it does likely mimic the demographic for many newsletter publishers in B-to-B. 69% Clothing sizes Marital status Hobbies/Interests 5. Security Security or lack of it online remains a top concern for internet users. Marketers should use this to their advantage by making the consumer’s opt-in process as comfortable and pleasant as possible. A survey by TRUSTe and TNS on US internet perceptions regarding usage of their personally identifiable information, found that one in three respondents didn’t trust companies to safeguard personal information. What an opportunity for marketers to lay loyalty groundwork by making a site’s security features as conspicuous as possible. Provide as many privacy policy links as possible and reassure the prospect that addresses will not be shared without their expressed permission (the bane of any SPAM-ed consumer). Promote the security factor of site registration. Marketers must consistently reassure consumers their data is well protected. Prominently display Date of birth Mother’s maiden Email Business telephone Address Home telephone Source: Poneman Institute, January 2005 Methodology: 1,799 consumers over 18 were surveyed. 5 Growing opt-in lists – Turning web browsers into buyers Few prospects will share personal information with a company – let alone partake in any buying action – if they do not trust that company with their personal data. The graph below shows that online subscribers are willing to provide more information to merchants they trust. But don’t go over board. As the data shows, patience online is limited – on average users will give marketers two minutes to collect data – so be creative. When choosing form fields you should visualize a dripping tap. Gather information gradually over time as the buyer seller relationship deepens. 6. Show and tell Marketers can apply the same theory to CAN-SPAM by promoting a site’s compliancy to it. To add credibility define it, spell out that all your messaging contains a double opt-out mechanism, a valid subject line and header (routing) information and the legitimate physical address of the mailer in question. In doing so, recipients are reminded that they have asked for and expressively given their permission to receive the information and offers sent to them. As the responses in the TRUSTe and TSN survey below highlights, marketers using double opt-in continue to see substantial higher open rates than those who use simple opt-in or opt-out mechanisms. Personalized content and time spent answering questions online 2004 2005 40% 35% 30% 25% 20% 15% Marketers using double opt-in report higher open rates 10% 5% Double Opt-in 2005 Average 25% 0% 14% 12% 10% 9% 13% 16% 35% 35% 30% 28% None More than 10 minutes 6 to 10 minutes 2 to 5 minutes Less than 2 minutes Source: ChoiceStream, Personalization Survey, May 2005 20% 15% 10% A survey on US internet users’ perceptions about the amount of personally identifiable information asked for at Web sites by TRUSTe – an online privacy certificate organization – and market researcher TNS, found that more than 50 per cent of users felt they were asked too much information when they register online. Online, the mantra of “permission” should drive a business owner’s email marketing strategy from start to finish. Therefore, be very specific in the online data you request during the opt-in registration process, or it will came back to bite your ROI. While a significant percentage of consumers report that they are willing to take the time to answer questions, there are however many questions a consumer will not answer. On this front, common sense rules the day. So regardless of how deep a buyer and seller’s relationship is, there remain certain types of information like sexual orientation, religion and reading preference that can be perceived “out of bounds” by a consumer and end a relationship fast. 5% 0% 2% 8% 7% 14% 20% 22% 23% 23% 22% 15% 9% 10% 18% 9% <10% 10-19% 20-29% 30-39% 40-49% 50-59% 60%+ Source: MarketingSherpa, Email Marketing Benchmark Survey, October 2005 Methodology: The survey was fielded on Wednesday, October 7, 2005 to selected MarketingSherpa lists. It was closed on Wednesday, October 12, 2005 with 1,927 qualified responses. 7. Form fields On the cost-effectiveness of language on the Web, marketers must choose their form fields carefully with this in mind: The better companies collect data, the faster a list grows…and the faster a list grows the faster a marketer can deliver a targeted email campaign with high conversion rates. 6 Growing opt-in lists – Turning web browsers into buyers Types of personal information that US consumers would not provide to a web marketer to receive Sexual orientation Legal history Social security number Credit card number Family members Financial history Religious affiliation Reading preferences Political activities Work history Educational background Age (date of birth) Email and IP address Gender Home location and telephone 98% 95% 93% 91% 91% 90% 88% 86% 81% 69% 42% 32% 26% 26% 16% Turning a wary consumer into giving up their address and personal preferences is easier than you think. A survey by JupiterResearch on how marketing executives in the US capture consumer email addresses for campaigns paints a fairly similar picture. Fifty-seven per cent of prospects offered up their email address to subscribe to a newsletter, and 21.7 per cent to enter a sweepstakes or an incentive based offer. Marketers must not limit their scope and let a valuable opportunity to capture critical data slip away. As the chart below illustrates, the greatest strength of email marketing is its ability to cater to the unique needs of each individual…so be proactive! % of consumers willing to trade information for relevant content 60% 50% 40% 0% 20% 40% 60% 80% 100% 30% Note: n=485; *among those consumers who would be otherwise willing to provide personal information to a Web marketer to receive targeted banner ads. Source: Ponemon Institute, Revenue Science, Chapell & Associates, September 2004 061517 ©2004 eMarketer, Inc – www.eMarketer.com 20% 10% 8. Value added incentives For many consumers, it is an acceptable win-win scenario to give up data marketers want for information or content they want. This results in marketers knowing more and more about their target audience and how to anticipate consumer tendencies in the future. A carrot goes a long way in today’s marketplace, where few companies offer up anything to attract participation at a personal level that gives consumers a tangible reason to provide their email address. Consider this response in a recent poll given by TRUSTe and TNS. Seventy-one per cent of users claimed they did not like registering because they had to give personal information, but would do so to obtain content or information they really wanted. To date, many marketers haven’t acted on this easy fix. How easy? Simply rework existing site content into: – Top 10’s – Hints and tips – Product news – Notification updates – Best practices – Discount and sales notices – Contest and sweepstakes A personalized email sent to the right recipient at the right time carrying just the right message, is a powerful tool towards converting that prospect into a long-term customer. As the trust between seller and prospective buyer deepens over time, so should the relevance of a marketer’s messaging. In turn, this will increase response rates and customer retention. The more relevant the messaging the higher the recipient’s interest level will be. The information below shows how even service email when used effectively can be a powerful marketing tool. 11% 0% Definitely Somewhat more willing willing Neutral Somewhat less willing not willing 57% 17% 5% 10% Source: Truverse, October 2005. Methodology: 272 professionals responded to email invitations to participate in the study between September 23th and October 7th, 2005. It should be noted that the sampling included a very high ratio of professionals with post-graduate degrees, and is not representative of the U.S. population. However, it does likely mimic the demographic for many newsletter publishers in B-to-B. 9. The ties that bind Having established contact through email growth best practices, the marketer has gathered enough relevant information to start converting that browser into a buyer. The key conversion ingredient to a long and fruitful relationship with any new prospect begins and ends with the personalized electronic mail message. 7 Growing opt-in lists – Turning web browsers into buyers User’s views on better email communications “What do you think are the best ways that companies can use email to communicate with customers?” Provide customers with confirmation messages (e.g., purchase confirmation shipping confirmation, transaction confirmation) Provide customers with electronic statements or other information about their individual account activity Promote special discounts and other limited-time offers Provide sweepstakes or other chances to win prizes Let people know about new products and services they were not previously aware of Offer personalized customer information Provide news and timely information about their industry Make customer service announcements Share opinions or advice about specific topics that the company has expertise in Give regular updates about the company’s business developments Provide games, humor, videos or other entertainment for readers Remind people about personalized events in their lives (birthdays, anniversaries) the many methods marketers use to keep their lists clean. Simply put, the critical component in maintaining the freshness of a house list is the recency and relevance of a marketer’s personalized email messaging. 2004 2005 Size of B2B & B2C mixed audience marketers’ house lists Methods used by US companies to clean their house email list, March 2004 (as a % of respondents) 58% 66% Delete persistent bounces 39% 37% 21% 48% 43% 29% 0% 33% 15% 10% 13% 26% 18% 14% 14% Use multiple opt-in procedures Notify recipients and ask for reconfirms Delete persistent non-opens Delete persistent non-buyers 76% 26% 20% 14% 6% 20% 40% 60% 80% 100% Note: n=2,279 Source: MarketingProfs.com, June 2004 061136 ©2005 eMarketer, Inc – www.eMarketer.com Challenges in building loyalty through email Before marketers can send out a truly targeted email campaign to engage the consumers in relevant permission-based dialogue, they must have the savvy to… – Understand the challenges in building loyalty through email – The determination to overcome those challenges 9% 6% 10% 10% 9% 8% 8% 8% Using filters Easier said then done. With consumer concerns about inbox clutter, users across all age spectrums are getting frustrated with the lack of privacy they are experiencing online. As a result, it is becoming more difficult for email marketers to get their messaging past the multitude of spam-blocking services, and email filters online consumers have subscribed to. Results of a recent survey on B2B marketing emails by the analyst firm Meta Group, reveals that 18 to 35 per cent of direct outbound email campaigns are falsely identified as SPAM, and not being delivered to the intended recipients. Taking into account the large investment many companies are devoting to email marketing, the impact of these numbers can be daunting even to experienced online marketers. The data below shows the significant number of consumers that have already adopted a method to box out marketers. Source: Quris, View from the Inbox, October 2005. Methodology: There were 2,543 respondents to the 2004 View from the Inbox survey, which was fielded in July 2004, and 2,528 respondents to the 2005 survey, fielded in August 2005. The significant differences in segment of respondents were run at the 95% confidence level. However, like any relationship, without constant maintenance it will erode, and in “real virtual time” nothing goes stale faster than a company database. In a DoubleClick report on methods used by US companies to clean their email list, nearly all marketers found that the most recent names in their database performed better than the old ones across all metrics (open, click-through and non-bounce rates). To this point, marketers must keep their lists up to date by regularly cleaning them out. Minimally this means deleting all “hard bounces” at once for each new mailing, and revisiting all “soft-bounces” on a unique emailby-email basis. The data below sheds light on 8 Growing opt-in lists – Turning web browsers into buyers Types of blocking services online consumers in North America have signed up for, 2004 Yes, I use it No, but I plan to sign up in the next year That’s a lot of opt-in water to fill a list bucket, and all indicators hint that in 2007 it will get even more difficult to escape the obvious: Tough treading ahead for legitimate marketers trying to offset their churn ratio to maintain, let alone grow an opt-in list. Clearly the names are out there, but marketers have to work harder to get at them. 54% 17% 58% 14% 63% 13% 8% 23% Do not call list Spam blocker Pop-up blocker And that’s assuming a marketer has been able to implement a successful “reach out” strategy, to generate a sufficient amount of quality addresses to email in the first place. Therefore, it’s not hard to realize why most online industry experts agree that that marketers obtain that potential customer’s virtual hand-shake FAST. Digital video recorder 0% 10% 20% 30% 40% 50% 60% Obtaining the hand shake Rising sales of professional self-serve or on-demand email list building tools indicate the business world is profoundly listening. Clearly the secret is out there. A solid return on your online marketing investment depends in large part on obtaining that “virtual hand shake” ASAP to ensure the health of your house list. Why? Opt-in lists perform far better than any other. And a solid ROI is an understatement. Per DMA’s Response Rate study on industry specific ROI ratio, email offers sent to an internal opt-in list produced a 14.2 per cent return on investment for marketers focused on soliciting direct orders – 70 per cent higher than the next closest marketing medium. Further, as the data on the next page similarly shows, email ROI index for DR marketers in the US with direct order objectives, ranked higher than all ad mediums with the exception of one. 70% Source: Forrester Research, September 2004 064418 ©2005 eMarketer, Inc – www.eMarketer.com Further, the Canadian Interactive Reid Report for 2006 (*based on 1000 quarterly telephone interviews with a representative cross-section of Canadian adults) from the research firm Ipsos-Reid paints much of the same picture: – 82 per cent of users currently have spam filters up from 77 per cent last year – 2 out of 10 emails don’t make it past spam blocking services to the intended recipient List churn That just scratches the surface. Then there is the matter of list churn. Because of churn, adding quality addresses to a company database at best can be likened to filling a leaky water bucket. Marketers require a steady stream of new opt-ins just to maintain the level they started with. The contributing factor to such a high churn ratio can be found in a recent Mediamark Research Inc. study on media usage and how consumers engage with a particular medium. The study indicates over 40 per cent of email users change their email addresses at least once every two years, while 15 per cent consistently change addresses one of more times per year. This produces on average an annual churn rate of 21 per cent. 9 Growing opt-in lists – Turning web browsers into buyers Return on investment for direct response marketing in the U.S with direct order objectives, by media Conclusions Don’t be fooled, using list building emailing tactics to grow opt-ins is a daunting task. However one thing is certain, not owing a list to communicate with consumers in an ongoing, loyalty-enhancing, revenue-producing way will quickly put a marketer behind the eight ball. As we near the end of 2006 consensus among industry analysts remains firm: Emailing your list file remains a marketer’s best online tactic to achieve the promise of lower costs, speed and response rates. In these uncertain times of email sensitivity, it is crucial that online marketers invest in easy-to-use self-serve email marketing technologies that minimally: 1. Capture and collect data through custom sign-up forms 2. Create follow-up welcome emails 3. Provide user double-opt-in processing 4. Comply to can-spam legislation 5. Encourage dialogue through personalized emails In the end, as any experienced online marketer will tell you, Rome wasn’t built in a day and neither is a great list. Still marketers should not be discouraged. As illustrated in this white paper, there is a lot that can be done to avoid the pitfalls of becoming an accidental spammer. Start with understanding the challenges ahead when trying to grow a robust list and – more importantly – possess the instinctive ability to ask for help. Don’t be afraid to take advantage of affordable professional email marketing technology. Choose the email solution that most closely suits your business needs. Then, with patience, persistence and care, implement best practice email tactics and begin turning browsers into buyers. Revenue, cost and response rates for direct response marketing in the US with direct order objectives, by media, 2004 Revenue per contact Telephone Email Dimensional mail Direct mail Newspaper Coupons Catalog Inserts Magazine FSIs Radio Direct response TV $45.37 $1.60 $14.16 $11.36 $0.45 $1.50 $1.48 $0.49 $0.22 $0.12 $0.08 $0.02 Promo cost per contact $2.50 $0.10 $0.91 $0.56 $0.05 $0.23 $0.69 $0.14 $0.11 $0.07 $0.07 $0.03 Response rates 5.78% 1.12% 2.30% 1.88% 0.09% 1.65% 2.18% 0.45% 0.13% 0.13% 0.10% 0.04% ROI* Index 18.2 16.0 15.3 14.9 8.8 6.5 6.4 3.5 2.0 2.6 1.2 0.7 Note: *ROI index is a baseline indicator used for comparing overall efficiency of one medium over another, calculated in this case by dividing revenue per contact by the promo cost per contact Source: Direct Marketing Association, October 2004 062989 ©2005 eMarketer, Inc – www.eMarketer.com Opt-in helps relevance Just as “location” is the mantra of real estate, as stated earlier, “permission” is the mantra that helps email marketers ensure relevance, by collecting the right consumer data…to send the right message…at just the right moment… to a consumer who is genuinely interested in your product. Consider these responses to a poll commissioned by DoubleClick, focusing on consumer willingness to respond to email. Some 67 per cent of respondents expressed that relevant information increases the chances that they would respond to an email, while 73 per cent said that what they are looking for was information based on interests specific to that company...relevance with a capital. In today’s highly competitive marketplace, consumers are most likely to pay attention to relevant messaging that reaffirms what they want. 10 Growing opt-in lists – Turning web browsers into buyers About Campaigner Campaigner’s software-as-a-service products enable organizations to have highly personalized one-to-one email dialogues with their customers, measure how they respond, and analyze those responses to interact in a more intelligent, automated way – resulting in more profitable relationships. Campaigner is partnered with industry leaders including Salesforce, Comcast and Yahoo! Its customers include companies such as Nokia, AT&T, PricewaterhouseCoopers, Nielsen Media Research, West49 and over 10,000 small and medium-sized businesses. Campaigner resources Campaigner offers a variety of educational materials for the public. Find recent articles, tips, online product and educational webinars, customer case studies, and more. To learn more about smart email marketing, visit: www.campaigner.com How to reach the Campaigner team Campaigner 685 Cathcart Street, Suite 300 Montreal, Quebec, H3B 1M7 Phone: 1.877.723.6245 – 1.514.282.0595 Fax: 514.282.1908 General inquiries: info@campaigner.com 1.877.723.6245 Sales: sales@campaigner.com 1.877.723.6245 email marketing