By Drew Adams

E-mail marketing is a tough business these days. Consumers are becoming more and more weary receiving tens or hundreds of unsolicited e-mails a day. Messages are harder to deliver than ever before because of sometimes heavy-handed spam blockers. The CAN-SPAM act could inflict monetary penalties on businesses that misuse their e-mail lists. So why would businesses persist in trying to send e-mail marketing messages to their clients and prospects in this difficult climate?

The reason comes down to consumer’s preferences. According to DoubleClick’s Consumer E-mail Survey in 2000, a user’s preferred way of finding out about new products and services was to browse their website. In 2001, there was a shift in consumer sentiment. The majority consumer’s no longer wanted to browse a website to find that information, they wanted to be notified of changes via e-mail. Viola! A symbiotic relationship was born. Consumers wanted e-mail and businesses wanted a cheap and easy way to deliver their messages to their consumers.

This is 2004 now. The game is a little different. Spam has gone beyond being an annoyance to threatening the viability of e-mail itself as a communications medium. Many ISP’s, the gatekeepers of email, are reporting that over 80% of the volume of email they process is spam.

In the midst of this hailstorm of spam, even highly frustrated spam-haters can usually cite one or two business e-mails that they enjoy and value. These e-mails may be notifications about bank rate changes from a reputable financial site or an update from their local theater with next month’s shows. The information may be so relevant to the user that they don’t even consider it e-mail marketing, but it is.

From a business’s perspective, what can be done to reinforce and restore consumer’s trust in e-mail?

To answer that question, lets try and find out where spam is coming from. A casual analysis of spam can identify three sources:

1) The 200 or so known spammers around the world that do an elaborate cat-and-mouse game with ISPs and regulators to avoid being caught.
(www.spamhaus.org/rokso/index.lasso)

2) Hackers who break into innocent people’s computers with high bandwidth connections and hi-jack processing power and resources to send spam.

3) Overzealous often well-meaning businesses that violate the central tenant of e-mail marketing – gaining permission first.

Businesses by themselves cannot do much about the first two types of spam. It will take a combination of regulation and specialized security and monitoring services to stop them. But businesses can do something about the last type of spam by not forgetting that although consumers want product and service information via e-mail, they want to signup for it first.

Another perspective on the question of how good businesses go wrong with e-mail can be gained from analyzing what e-mail is good for. Take a look at the following survey done by the Direct Marketing Association in 2002 about what works for customer retention and customer acquisition online.

Online Marketing Methods US Companies have used and found effective for Customer Retention (Ret.) and Acquisition (Acq.) 2001.

Online Marketing Ret. Acq.
Email Marketing 63% 37%
Incentive Programs 49% 51%
Advertorials 18% 82%
Affiliate Programs 25% 75%
Online PR 26% 74%
Referral / Viral Marketing 15% 85%
Reciprocal Ads 9% 91%
Search Engine Positioning 6% 94%
– Source: Direct Marketing Association, April 2002

As can be seen from this breakdown, e-mail marketing is not an effective medium for customer acquisition, but it is an effective medium for customer retention. Most, if not all, spam has its origin when businesses try and use e-mail to acquire new customers.

E-mail is only effective at growing business when it is used for customer retention purposes. That is, you already have the client’s or customer’s information because they gave it to you and you are using email as a way to “stay in touch” and keep your business top of mind by providing interesting and relevant content. This is no small thing. Retaining customers is often more important to a business than acquiring new ones.

Once you engage your customer in a permission relationship, it is the business’s responsibility to provide that user with regular useful content. Without that, even if the e-mail addresses were gained legitimately, your e-mails will start to feel like spam. Users may forget how or when they gave their permission and will begin to associate bad feelings with your organization or company.

Spam is threatening to make e-mail irrelevant. If e-mail is to survive as a medium for business to keep in touch with their customers, businesses who use e-mail are going to have to become more sophisticated and more sensitive to the ramifications of their actions. Only the ones that do it right will reap the benefits.

To learn more about e-mail marketing, please read next month’s articles about advanced techniques for responsible e-mail marketing.

For more information on permission marketing read Seth Godin’s book, Permission Marketing: Turning Strangers Into Friends And Friends Into Customers.

Drew Adams is President of Hillsborough-based SourceKit, a Web development and Internet marketing firm. Drew can be reached at dadams@sourcekit.com. More information on his company can be found at www.sourcekit.com.

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