Why do opt in email marketing?

Why do opt in email marketing?

People unfamiliar with opt in email marketing often wonder what all the fuss is about. Didn't spam kill email as a marketing vehicle? And if spam didn't kill it, what about web feeds, instant messaging and all the other clever ways we can communicate online? Isn't email outmoded?
Those wondering about the benefits of email marketing in today's ever-changing online and marketing environment will find the answers below.
It works
Businesses engage in email marketing because it works. And works well. Here are the numbers...
According to research conducted by the Direct Marketing Association, email marketing generated an ROI of $51.58 for every dollar spent on it in 2006. The expected figure for last year is $48.56, and the prediction for 2008 is $45.65. As such, it outperforms all the other direct marketing channels examined, such as print catalogs. (See reference.)
A February/March 2008 retailer survey by shop.org revealed that email marketing has the second lowest cost per order (CPO) of any online marketing tactic. The CPO of $6.85 compares favorably with, for example, paid search's CPO of $19.33. (See reference.)
A 2008 survey by Newsweaver and B2B Marketing Magazine of 175 UK B2B marketers revealed 78% considered email "critical" or "very important" to their B2B marketing strategy (see the press release.)
In a December 2007 survey of Internet marketers by MarketingSherpa, email to house lists beat paid ads in terms of ROI, with 42% describing email as having "great ROI - outperforms other tactics." Only SEO and behavioral targeting (which you can also do with email) scored higher (see article).
In another December 2007 survey of over 2000 marketers by Datran Media (note: an email marketing service), 80% of respondents "indicated email was the strongest performing media buy ahead of search and display." 55% expected "ROI from email to be higher than any other channel" (see press release.)
Marketers responding to a July 2007 global survey by McKinsey put email second only to paid keywords in terms of online marketing efficiency (see article.)
A July 2007 survey of over 3,000 marketers involved in search marketing(!) by MarketingSherpa saw "email marketing to a house list" garner the most votes as the strongest marketing tactic. And it gained more votes than any other tactic for "good ROI" (see the report.)
A 2007 survey of over 1,000 advertisers by Outsell Inc. put email as the second-most effective online marketing tool after the company's own website (see MediaPost article.)
Research conducted by Shop.org in 2007 revealed email generates sales at an average cost per order of under $7, comparing favorably to $71.89 (banner ads), $26.75 (paid search) and $17.47 (affiliate programs.) (See reference.)
In a March 2007 survey of hotel marketers by Hospitality eBusiness Strategies, 58.7% cited email marketing as one of the Internet marketing formats that generate the best results and highest ROI (see the survey results.)
In a March 2007 column, usability guru Jakob Nielsen listed an email newsletter as "probably the single-highest ROI action you can take to improve your Internet presence." (See 10 High-Profit Redesign Priorities.)
A report in mid-2005 from JupiterResearch stated that..."when done right, $1 spent on e-mail can generate a $9 return." (See "Outlook 2006".)
The money is following the results...
In a 2008 survey of 200 corporate markters, 74% said they would increase spending on email campaings over the next three years (see article).
In January 2008, Jupiter Research forecast that spending on email marketing will grow from $1.2 billion in 2007 to $2.1 billion in 2012 (see press release).
In a December 2007 survey of over 2000 marketers by Datran Media (note: an email marketing service), 82% of respondents "indicated that they plan to increase their use of email marketing in 2008" (see press release.)
A November/December 2007 survey of B2B marketers and their spending intentions noted that over 70% expected to increase their email marketing budget in 2008 (see report.)
An end-of-year 2007 survey of marketing and sales execs by PoliteMail found over 80% "have plans to increase use of email for sales and marketing." (see survey results.)
In a September 2007 article, eMarketer predict spending on email advertising to rise 82% to $616 million in 2011. And spending on email marketing to rise 11% to $1,650 million over the same period (see article.)
In McKinsey's July 2007 global survey of marketers, more respondents used email than any other form of digital advertising vehicle. 51% said their spending on email would increase over the next three years, while 11% said it would decrease (see article.)
In a 2007 survey of large retailers, 88% of respondents noted that email marketing had "...increased as a priority in 2007." (see article.)
If you're wary of statistics, then consider the results obtained by real marketers in real organizations. Here's a list of over 90 case studies showcasing successful uses of email. And nearly all of those are published at independent media websites, not at vendor sites where they're just trying to sell their particular email marketing solution.
Why it works
Email marketing works for a variety of reasons...
It allows targeting
It is data driven
It drives direct sales
It builds relationships, loyalty and trust
It supports sales through other channels
Modern email marketing services and solutions support database integration, segmentation and various other tricks and techniques for improving the targeting of outgoing messages. Advanced methods generate on-the-fly emails customized down to an individual recipient basis.
And every email campaign you send out generates a heap of actionable data you can use to refine your approach and messages.
Email promotions and offers generate immediate action: sales, downloads, inquiries, registrations, etc. Informative email newsletters and other emails send people to offline stores and events, prepare the way for catalogs, build awareness, contribute to branding, strengthen relationships, encourage trust and cement loyalty.
All in all, a pretty good way of going about your marketing business. But...
Let's not get carried away
Just like a garden only bears fruit if managed properly, so it is with email marketing. We know it can work, but you have to get the basics right. The basics of building a list of people who want to hear from you, crafting a message, and ensuring the emails get through to those on that list.
And once you have the basics right, there's a whole spectrum of more sophisticated tactics you can employ to drive further success. Because the metrics show us that there's plenty of room for improvement and plenty of rewards waiting for those who do improve.
For example, one report found that "using web analytics to target email campaigns can produce nine times the revenues and eighteen times the profits of broadcast mailings."
At a simpler level, just mailing a small coupon offer to customers who hadn't purchased for a while brought in a tonne of extra sales for one retailer.
Convinced? Start the email marketing journey with a look at the basics of opt in email marketing. Then go on from there with the help of these top resources:
Email marketing article directory
Email marketing blogs