Email marketing xfactors

INTRODUCTION
Email marketing isn’t new. When it comes to making
headlines in marketing newsletters and at industry
events, email’s not typically at the top of the list. But even
without the glitz and glamour, the facts remain: More
than 93% of online consumers are SUBSCRIBERS,
and have provided their email address to at least one
company or brand. 88% of U.S. online consumers
check email daily, and 94% use email at least once
a week. And more than 50% of consumers make
purchases as a direct result of email—it drives more
conversions than any other channel. So while email isn’t
new, it certainly isn’t dead.

But why does email work when it comes to your
marketing communications? What makes this channel
unique and effective? In this second report of our SUBSCRIBERS,
FANS, & FOLLOWERS series, we’ll expose why email continues

“I’m more comfortable
to be an effective form of communication with your customers by
revealing its x-factors—characteristics that set email apart from
any other interactive marketing channel.

EMAIL’S X-FACTORS INCLUDE:
with conveying personal
1. FAMILIARITY information through email.
2. MANAGEABILITY

3. PRIVACY AND TRUST
I don’t trust the social
4. RELEVANCY networks—I hear too
5. EXCLUSIVITY

As SUBSCRIBERS, FANS, & FOLLOWERS continues to explore
many things about peoples’
consumer motivations as they relate to Email, Facebook,
and Twitter, we’ll begin with the oldest and most established accounts getting hacked.”
channel—email marketing. By revealing email’s x-factors, we’ll
help you remember why email can provide a critical foundation -Jennifer, 35, Detroit, MI
for your online marketing, so you can build an integrated
strategy that will work across all interactive channels.

2 © 2010 ExactTarget

“For me, the best thing about email as a communication tool is its
efficiency. It’s quick, simple, and can be done on your terms.”
-Brian, 31, Philadelphia, PA

© 2010 ExactTarget 3

X-FACTOR 1 FAMILIARITY
Because email isn’t new, consumers are familiar with the technology, are comfortable using
it, and know exactly what to expect. They’ve also grown accustomed to using email as a way of
engaging with brands, making it top-of-mind when it comes to interacting with a company.

In the course of our research, we investigated two of the most common ways consumers
proactively engage with brands via email:

1 OBTAINING PROMOTIONS AND DEALS

The internet has simplified price and promotion shopping, and 82% of consumers will search a
variety of online channels to obtain deals and promotions. For the majority of consumers, they
begin their search by checking a particular brand’s corporate website. 76% of consumers will
initially seek deals and promotions on a brand’s website, and from there, 62% will sign up
to receive email, while 54% will use a search engine. 17% of consumers will also include
Facebook as part of their quest for ongoing deals, and 3% will search for deals on Twitter.

Women are more likely than men to sign up for emails (67% compared to 57%), and older
consumers are also more likely to sign up for emails to get ongoing deals. However, the difference
based on age is far less than may be expected. In fact, Millennials (aged 15-24) are twice as
likely to subscribe to email in their search for ongoing deals (56%) as they are to search for
deals on Facebook (28%).

2 CUSTOMER SERVICE COMMUNICATIONS

The internet has also changed how organizations approach customer service. In the age of
immediate gratification, the importance of customer service has been magnified. And although
social media has given customers a way to publicly air their grievances against a brand, the
majority of customers still prefer to deal with customer service issues in private—over the
phone, through a company’s website, or through email. When faced with a customer service
issue, 41% of customers will communicate via phone, 33% via company websites, and 20% via
email. 37% of customers will send an email after an unsuccessful first attempt, making it the most
common second step in the process of dealing with a customer service issue.

Consumers often turn to email for customer service requests because an immediate response is
not always necessary. Email is seen as an efficient way of dealing with issues without having to
wait on the phone for help, or turn to social media where privacy is lost.


“To get ongoing deals, I typically
ACCORDING TO YOUR CONSUMERS:
go to the company’s website first. THE STRENGTHS AND
WEAKNESSES OF EMAIL
Then I check out any emails they STRENGTHS:

• PRIVACY: Email is trusted as a safe and secure way for
send letting me know of upcoming handling private matters. And even the heaviest social network
users prefer to handle private matters through email.

deals or products. After that, I’ll see • FLEXIBILITY: Many consumers wait until the evening
or weekend to catch up on email. So while they like the
immediacy of sending an email, they appreciate the ability
to respond at their own leisure.
if they’re on Facebook.” • DOCUMENTATION: Email has largely replaced traditional mail
as the channel for official communications. People like having a
written record of what they say, especially in business or when
-Russ, 38, Sacramento, CA dealing with companies online.

WEAKNESSES:

• SPAM AND VIRUSES: Consumers almost universally believe

56%
that spam continues to be a problem when dealing with email.
Spreading or contracting viruses also remains a concern.

of Millennials subscribe • MISCOMMUNICATION: Consumers continue to struggle with
miscommunication when it comes to email messages, since it can

to email in their search for ongoing be difficult to convey emotion, tone, or inflection.

• NON-RESPONSE: Consumers are continually frustrated when
deals compared to 28% who search the contacts they’ve delivered messages to don’t respond.

for deals on Facebook.


X-FACTOR 2 MANAGEABILITY
93% of U.S. online consumers are SUBSCRIBERS, large generational shift away from email is occuring,
meaning they receive at least one permission-based this is a misinterpretation. The amount of email
commercial email message on a typical day. But with teens receive increases significantly when
so many brands and companies communicating with they graduate from high school, suggesting
consumers on a daily basis, many marketers worry about life stage—not age—is a more important factor
overflowing inboxes, which could lead to consumers when considering how much consumers rely
abandoning email or declaring ‘email bankruptcy.’ on email. Email is the accepted channel for
“important” or “official” communications, and
Marketers (especially online marketers) receive two to
as consumers advance through different life
three times as much email than the average consumer
stages, their use of email increases as they
on a typical day. The average consumer receives 44
interact in these capacities.
daily emails (including commercial and personal),
and half of consumers receive fewer than 25 per Another factor that makes email manageable?
day. While these numbers aren’t small, most consumers The flexibility consumers have to respond at their
consider the size of their inboxes manageable. So while leisure. Many consumers wait until the evening
marketers may be overwhelmed by overflowing inboxes, or weekend to catch up on email. So while they
most of their customers aren’t. like the immediacy of sending an email message,
they appreciate the ability to respond at their
Of those 44 daily emails, about 25% are permission-
own pace. This offers
based commercial messages, with the remaining
a welcome contrast
75% comprised of personal messages, transactional
to the intrusiveness
messages, and spam that’s quickly deleted.
of phone calls and
The average teen (aged 15-17) receives less than texting or the real-
half the email of the average consumer, and receives time urgency of
only four commercial emails per day. And while Facebook and Twitter.
marketers often interpret these statistics to mean a

“You don’t have to worry about whether someone is going to answer
your phone call. You can just shoot them an email, and when they
receive it, they usually respond right back to you.”
-Daniel, 29, South Bend, IN


SOMETIMES,
LESS IS MORE 41% of
U.S. internet users
Just because consumer inboxes may

be less crowded than commonly
threatened to
thought doesn’t mean you should stop buying from
send more. Studies repeatedly show

that consumers believe commercial companies that
email comes too frequently. A
sent irrelevant
recent CMO Council study* found that

41% of U.S. internet users threatened messages,
to stop buying from companies

that sent irrelevant messages. The
according to
problem isn’t that consumers receive
a recent CMO
too much email—it’s that they receive

too many messages that fail to Council study.
communicate with them as individual

SUBSCRIBERS. In short, relevancy

is the key to frequency.

*CMO council (2009), “Why Relevance
Drives Response and Relationships”, www.
precisionpromotion.org/pdf/relevance_drives_
response.pdf


X-FACTOR 3 TRUST AND PRIVACY
If consumers don’t trust you, they won’t subscribe to Established brands have a distinct advantage when it comes
your communications. But by building a trusting relationship to earning the trust of their consumers. Consumers tend
centered on respect for privacy, marketers have a great to give the benefit of the doubt to big brands, and assume
opportunity to increase loyalty—and ROI. their email addresses will be safe, secure, and unshared. If
you’re a well-known brand, you must continue to honor
In order to build trust, it’s important to understand the two
this consumer trust to ensure your subscription list—and
concerns that are top-of-mind for consumers when considering
reputation—remain intact.
whether or not to supply their email address to a company:
In contrast, consumers will do additional research on
“WILL MY EMAIL BE SHARED?” unknown brands before offering their email addresses.
1 They’ll google company names, and review complaint
Consumers know that spam is a risk when sharing
history and comments on Facebook and Twitter. If you’re
their email address, since certain companies may choose to
a small brand, it’s even more important you proactively
sell or share this information.
manage email addresses, as well as your social media
presence, since these comments can have a direct
“HOW DIFFICULT WILL IT BE TO
2 UNSUBSCRIBE?”
impact on subscriber registration.

Companies are required by law to honor unsubscribe requests
in a timely manner. But consumers have learned that not all
companies are diligent about unsubscribes.

62% of consumers mistakenly believe website privacy policies prevent
their information from being shared without their permission, according to a
recent University of Pennsylvania and U.C. Berkeley School of Law study.*
*Turow et al., “Americans Reject Tailored Advertising and Three Activities that Enable It” (September 29, 2009). Available at SSRN: http://ssrn.com/abstract=1478214


Consumers receive an average of 44
emails a day, 25% of which are permission-
based commercial messages.

“I only provide my email if it’s
for a company whom I trust,
which are companies I regularly
do business with, or sites given
to me by a trusted friend. When it
comes to smaller, more unknown
companies, I have gotten into
the habit of googling the name to
check it out.”
– Angela, 28, Ann Arbor, MI


X-FACTOR 4 RELEVANCY
Consumers know it’s possible for companies 1 CONTENT IS CLEARLY PERSONALIZED.
to send targeted and personalized messages,
meaning relevancy is no longer an option Consumers can quickly identify bulk messages. How the content is targeted is less
for marketers. And when it comes to email, important than noticeable evidence that personalization is present.
consumers quickly decide which companies
they like to receive messages from—versus 2 THE ADVANTAGE OF BEING ON THE EMAIL LIST IS CLEAR.
those they don’t—based on whether the SUBSCRIBERS want to see that they’re getting information that’s not widely
email message is relevent or not. promoted to the general public, which can be made evident through special deals,
promotions, or for-their-eyes-only content.
Our research found that half (49%) of
consumers “always” open emails from According to MarketingSherpa’s 2010 Email Benchmark Survey, two-thirds of
their “favorite” companies, compared to marketers say that delivering relevant content to customers is a highly-effective
only 16% who say they never open email. marketing tactic. And according to Econsultancy’s How We Shop in 2010 Study,
the biggest difference between valuable and non-valuable email programs is
So how can you get on your consumers’ whether or not the information provided relates to the interests of the customer.
“favorite” list? To get a sense of messages Marketers and consumers agree—relevancy is a must.
deemed worthy of “always opening,” we asked
consumers to name specific companies they
feel do the best job. Two themes emerged:


“Stop sending everyone everything! I want to receive what’s
interesting and relevant to me, not information for another group.
I’m not interested in those non-relevant messages, and they make
me much more likely to delete them as a contact.”
-Jeff, 42, Sarasota, FL


“I sign up for email when they promise something exclusive:
coupons, shopping codes, etc.”
-Daniel, 22, San Antonio, TX

X-FACTOR 5 EXCLUSIVITY
If there’s one thing that makes email unique above all other EARLY NOTIFICATION: By becoming SUBSCRIBERS,
communication channels, exclusivity is it. While only a third
2 consumers expect to be the “first to know” about
of consumers said they were motivated by the promise of upcoming promotions and sales. It’s important that marketers
exclusive content when choosing to become a SUBSCRIBER, honor this expectation, since consumers want to make sure they can
email’s exclusivity factor extends way beyond content. take advantage of special offers before they become widely known.
They will eventually share this information with friends and family, but
Becoming a SUBSCRIBER is like becoming a member
only after they’ve had a chance to capitalize on the offer themselves.
of an exclusive club. As mentioned earlier, SUBSCRIBERS
demonstrate their trust in a brand when they provide a company
with their email address. And in return, they expect to be a
3 EDUCATION: Consumers rely on brands to keep them
informed about topics that interest them, especially if
part of an exclusive club that receives all of the members-only they’ve provided that company with their email address. This
perks outlined below: educational content can be distributed in the form of newsletters
or alerts, to the exclusive group of email SUBSCRIBERS. And while
PROMOTIONS AND DEALS: 81% of SUBSCRIBERS
1 have been motivated to provide a company with their
consumers may be able to search for this content elsewhere, the
exclusive e-newsletter keeps them informed on a regular basis.
email address due to some form of promotion. And when
consumers actively seek promotions from a particular brand, TAILORED CONTENT: Consumers expect brands to
62% end up opting-in to receive that brand’s emails, compared to
4 tailor content to their individual preferences. They view the
only 17% of consumers who will check Facebook, and 3% who messages they receive through social media as being appropriate
check Twitter. Because email is the only outbound marketing for general audiences, but they expect email content to be
channel that allows marketers to proactively contact consumers specific to their interests and needs. Once again, they realize
with promotions, SUBSCRIBERS know they must be exclusive they can only receive this relevant messaging if they choose to
members of the email list in order to receive these great deals. become an exclusive member of a brand’s subscriber list.


MOTIVATING YOUR CONSUMERS TO SUBSCRIBE
Overall, promotions are a primary motivator when people are choosing whether or not to subscribe to your communications.
81% of SUBSCRIBERS have been motivated to provide a company with their email address due to some form of promotion—
from giveaways to deals to upcoming sales. And women are more likely than men to be motivated by promotions. 88% of
women indicate that promotions have motivated them to become a SUBSCRIBER, compared to 70% of men. This
difference is most pronounced for “freebies” offered in exchange for an email address, where 65% of women are motivated by
this type of giveaway compared to 44% of men.

And contrary to conventional thought, older consumers aren’t the only people who are motivated by promotions. Promotions
are the primary motivator for teens who sign up for a company’s email list. However, teens are more likely to be motivated
by “social” factors than older consumers. For example, they’re more likely to subscribe to email newsletters for fun and
entertainment (43% vs. 28%), or because someone recommended it to them (27% vs. 16%).


CUSTOMER SUCCESS GROUPON’S X-FACTORS
An ExactTarget customer since 2009, Groupon (www.
groupon.com) is a deal-of-the-day website that’s
localized to major cities around the world, currently
serving more than 60 markets. The company offers
one “Groupon” per day—specific to its different
markets—delivered early in the morning by email. If a certain number of people
sign up for the featured offer or promotion, the deal becomes available to all, but if
the predetermined minimum is not met, no one gets the deal that day.

Groupon has seen tremendous growth in its short history as a company. Andrew
Kordek, Groupon’s manager of email optimization, has seen his subscriber list
grow from 1.2 million in October 2009 to 5.5 million to date, totaling more
than 1 billion emails sent per year. In short, Groupon has found email’s x-factor,
mainly due to:

EXCLUSIVITY: Each day, Groupon features local deals and
1 promotions at unbeatable prices. But you can only take advantage
of the savings if you’re a Groupon email subscriber. This exclusive club of
5.5 million subscribers continues to grow.

GIVING CONSUMERS WHAT THEY WANT: Groupon isn’t
2 delivering a traditional marketing message. They provide a service
that’s solely dedicated to saving their customers money, while driving
traffic to local businesses.

3 RELEVANCY: Groupon’s daily deals are specific to geographic locations, so customers receive relevant offers
based on their city’s businesses. Each market is in effect its own list, with emails featuring the day’s deals for
that particular locale.

Groupon has discovered the power of email marketing by capitalizing on its x-factors, and Kordek sums up their success
by explaining, “Email marketing is not a one-way communication. You need to take yourself out of the company and
put yourself in the subscriber’s shoes. As a marketer, you’re not in charge of the email—your subscriber is. Let the
customer and subscriber dictate how you should run your email program.”


WAIT—
THERE’S
MORE!
In Report 3 of SUBSCRIBERS,
FANS, & FOLLOWERS, we’ll
tackle our most ambitious
research report to date. Although
many marketers believe age,
gender, and income are the
primary factors driving how
consumers interact online, our
research suggests otherwise.
Personality is actually the
main factor that impacts how
consumers interact online,
and we’ve identified 13
distinct online personas that
will help you truly get to know
your audience—beyond age,
gender, and income level—so
you know how to successfully
communicate with your target
audiences. To automatically
sign up to receive each report
as it’s released, visit www.
Ready to find your organization’s email x-factors? exacttarget.com/sff/download
and select the opt-in button on
Visit www.exacttarget.com today. the download form.


Email remains the critical foundation for your
interactive marketing strategy. But you need
a provider with state-of-the-art capabilities.

ExactTarget powers billions of emails a month
and stores more than 60 terabytes of data, so
even at peak sending times, your mission-critical
messages will always reach your customers.

Not only is our software sophisticated—it’s
easy to use. Our team of User Experience
professionals have created the most intuitive
interface in the industry, so you’ll be able to
spend less time executing your programs and
more time focused on overall strategy.

Visit www.exacttarget.com
to learn how we can meet your unique
email marketing needs.

www. ExactTarget. com www. CoTweet. com

This document may not be copied without the prior written consent of ExactTarget. © 2010 ExactTarget.

Email marketing xfactors

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