How to Use Email to Drive Sales: Get the highest ROI with email marketing

By Troy Foss, Director of Email Marketing, Eventful, Inc.

Using email to drive sales offers the highest return on investment of any direct response marketing method. The Direct Marketing Association estimates that email marketing generates an ROI of $45.65 for every dollar spent on it in 2008. In contrast print catalogs generate less than $7 per dollar spent and internet marketing (pay-per-click and banner ads) generates about $22 per dollar spent.

Email marketing comes in two basic forms:

1) Periodic emails contain special offers, discounts or new product announcements that generate direct sales.

2) Electronic newsletters contain articles, news and other content relevant to the reader and act as constant reminder of your products and services. Newsletters generate business over time.

Email is a highly effective and lucrative sales channel. So how do you get started?

Getting email addresses

The first step is collecting your potential and current customers’ email addresses. This can be as easy as asking for them, however, you want to make sure you are getting the most out of the acquisition and are compliant with the law. Here are some tips:

Ask for email addresses whenever possible. Put newsletter or email sign-ups boxes in strategic locations on your Website. If you have a retail space or trade booth, collect emails addresses for your newsletter in those places as well. You want to give users every opportunity to sign-up for your newsletter, or receive your special offers via email.

Collect other relevant information. Collect users’ zip code, age, gender or any other demographics that allow you to target specific products and information to them.

Follow accepted opt-in email practices. Never use a borrowed or purchased email list. Include your physical address and phone number in all of your emails/newsletters. Make unsubscribing an easy process. For more information on opt-in email practices see the opt-in section of this article.

Obtain primary email addresses. Most web users have multiple email addresses—a work email, a personal email, and perhaps one that is dedicated to junk email (the one they use when signing up for offers). To get a primary email address (the one a customer checks everyday) try these three tactics: 1) Show a sample of the newsletter/email you will be sending; 2) Explain how often it will arrive; and 3) Use the term “Your email” instead of “email address” in the signup box.

Fix misspelled addresses. To weed out typos, ask people to enter their email address twice or set up a misspelled email address tool which checks for common misspellings and provides the user with the correct version. For example, if a user typed in Joe@hotmial.com the tool would prompt the user with: “Did you mean Joe@hotmail.com? YES NO.” This tool is available at freshaddress.com.

Confirmation and double opt-In

Federal laws prohibit businesses from sending unsolicited emails (known as “spam”). To be in compliance with these laws and to avoid alienating or angering your customers, be sure to only send emails to those people who have voluntarily signed up to receive your emails. Also, use the following practices:

Confirmation/Welcome messageSend subscribers an email immediately after they sign-up. This message should thank the user, describe the benefits of joining your list, and describe how someone can unsubscribe from future emails. Also, ask the user to add the "FROM" email address to their “safe sender” list.

Double Opt-in
Use your welcome message to send a validation link that the subscriber must click on to activate their subscription. Vistage member Raj Khera, president of email service provider MailerMailer, explains why this important: “There are two common methods for online registration. Single opt-in allows a customer to be added just by entering their email address in a form. Since there is no address confirmation, anyone can enter any address into a form, resulting in fake or unwanted sign-ups that could lead to spam or blacklisting issues. Double opt-in (a.k.a., confirmed opt-in), the preferred method, sends a verification request to the email address entered, thereby validating the address and the recipient’s permission to get your newsletter.”

In all your emails/newletters, include a heading message such as, "Thank you for subscribing to our newsletter." This reminds the user that they did in fact subscribe.

Give your subscribers content they love and look forward to getting

Periodic emails
Periodic emails can drive online traffic to your products and services and generate an enormous response. Here are some examples of compelling emails that readers want to know about:

Product discounts
Private, exclusive events
Pre-sale specials
Product announcements
Grand openings
Weekly Tips
Industry Trends
New laws and legislation
New Video posted on your site
Breaking News

The call to action in periodic emails typically involves the purchase of a product or the opportunity to learn more about a special offer. To see how top brands use email to drive sales, visit the Retail Email Blog.

Newsletters
As a constant reminder of your brand or products, newsletters are a proven strategy for generating business over time. “The key to newsletters is relevancy,” says Raj. “The more relevant your message is, the more likely a reader will view it and take action. The less relevant it is, the more likely they will delete it, unsubscribe or even report it as spam.”

A great newsletter is filled with engaging content that keeps your audience wanting more. Most newsletters are sent out either daily, weekly or monthly, and maintain a consistent frequency and schedule. Your newsletter should also provide links to content on your site.

Ideas for compelling newsletter content:

Relevant articles
Podcasts
Videos
Top 10 lists
Quizes, polls or surveys
Study/survey results
News
Commentary
Profiles of customers

Newsletters, like periodic emails, should always contain a call to action. For newsletters, this can be as simple as a “read more” link directing user to the complete article on your site. Most email service providers will allow you to track who clicks on which links, giving you insight into your subscriber’s mindset.

Some companies choose to monetize their newsletters by selling ads within it or with affiliate offers. Other companies prefer to direct readers to their website and products only.

What not to send
Never send your subscribers content that may offend them or hurt your brand reputation. This includes graphic or mature content, any age-restricted content, racist content, offensive humor, etc. Additionally, be careful about sending any personal information in emails. A first name can usually be engaging, but sending a password or other private information may upset many customers.

Track your open and conversion rates

Once you get your email or newsletter program up and running, you will want to track your success, so that you can do more of what works and less of what doesn’t. Most email sending software has built-in tracking features. Here are a few definitions used in measuring results:

Open rate: Number of opens divided by number of emails delivered. Open rates are dependent upon a user opening an email and turning on their images. Most web-based email clients (Hotmail, Yahoo, AOL) block images by default unless the user has added your “from address” to their address book.

Click rate: Number of click-throughs divided by number of emails delivered.

Conversion rate: The total number of successful conversions (product sales, referal or other goal) divided by the number of click-throughs. Conversions can also be calculated as a percentage of open or a percentage of delivered.

Variables that affect results

The subject line and “from” name can dramatically increase or decrease your open and click rates. Using your brand name in both the From Name and Subject Line is a simple way to increase the long-term performance of your campaigns. Try testing short vs. long subject lines and keeping something consistent each week so your users become familiar with your campaigns. Stay away from spam-like techniques such as ALL CAPS, dollar signs, multiple exclamation marks, or over-the-top call to actions. Take a look at the emails in your own spam folder for characteristics to avoid.

A well-designed aesthetically pleasing email can drive significantly more clicks than one that’s hard on the eyes or difficult to read email. Also, the quality of the content on your landing pages can positively or negatively affect conversion rates. These and other variables can be optimized through a series of A/B tests.

Improving your conversions

To improve your conversions follow these tips:

Be consistent
Once you develop your email strategy and know what campaigns you will be sending, be consistent. Let your users know when they will be getting email from you. Maintain this schedule (down to the hour if possible) so that your users can look forward to your content.

Follow the “5 to 7 time” rule
Many studies indicate that people need to see an offer five to seven times before they take action. If possible, keep an eye on how your users respond to your offers after receiving it multiple times. Try re-sending the offer to users who never opened it or who have opened but never clicked.

Test, test, test
One way to get better responses is to conduct tests to see which ideas get better traction. Set up an A/B testing strategy to increase the performance of your email campaigns. Change up the subject line or “from name” in your emails. Experiment with the time of day or day of week that you send the email or the content of the email. Once you have found some ideal results, move into testing out different segments of your list: Opened vs. never opened, clicked vs. never clicked, time since joined, etc.. There are always things to test!

Finding the right email provider

There are two tiers of email service providers: full service and do-it-yourself.

Do-it-yourself providers, such as Mail Chimp, MailerMailer, Constant Contact and Vertical Response, provide most of the major features companies need in an email marketing service, but without a dedicated account manager or creative services. These services provide templates and live customer support for those who might need some assistance. With a do-it-yourself provider, you need to manage your email lists, write your content, design the email (or feed your content into existing templates) and upload it to the providers’ web page. The cost for do-it-yourself providers ranges from $29-$350 per month depending on the volume of emails you send and which company you choose.

Full service providers, like eDialog, Exact Target, eROI, Bronto, Blue Hornet and Yesmail, are far more expensive but come with an account manager who does most of the leg work. This includes generating and sending out your emails (managing and scrubbing lists, formatting content, and scheduling and sending out the emails). In some cases, a full-service provider also can design the email/newsletter and create the content for it.

Whichever email service provider you choose, make sure they deploy all of the industry best practices around email authentication and deliverability, and that they are CAN-SPAM compliant.

Sending reputation

The email address that you send from will develop a reputation. If subscribers report your emails as spam to Gmail, Hotmail, Yahoo, AOL, etc. those companies may decide to block your future emails. Most of the ISPs (Hotmail, Yahoo, AOL, etc) keep whitelists of approved senders and offer feedback loops which you can set up. More on deliverability standards can be found at: http://wiki.emailmarketersclub.com/

To get more ideas for your email market initiatives, or to go deeper into this subject, take a look at the blogs of some of the best email marketers in the industry:
http://blog.deliverability.com/
http://theemailwars.com/
http://www.mailchimp.com/blog/

These experts live and breathe email marketing and love to share what they know.

Troy Foss is a consultant, innovator and conference speaker in the email marketing industry. He is currently the Director of Email Marketing at Eventful, Inc., which enables its community of users to discover, promote, share and create events. Troy co-founded eDiagnostix, an e-mail deliverability and consulting company. He can be reached at troyfoss [at] gmail [dot] com or visit his Linkedin profile.