The Costs Of Non-Delivered E-mail

by editor , David Baker, Jun 12, 2006, 2:00 AM

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You work hard to communicate with your customers through e-mail. You craft a compelling message, code it properly, measure the results, and the traditional statistics return a traditional rate of response. But what if you can't get your message through to the intended recipients due to arbitrary blocking by ISPs, corporate filters, consumer filters, or junk mail folders? What does that REALLY cost you over time?

I don't often write about deliverability, as there are many other experts that make a living doing this, and I tend to rely on their expertise. However, as a marketer I have an obligation to educate my clients, and ultimately consumers, on the issues and costs of relationship marketing of a non-delivered "experience."

First, an obvious cost is lost sales or increased lead generation costs. No e-mail equals no sale. As Pivotal Veracity reported earlier this year, 20 to 25 percent of all e-mail is blocked in some form and not reported. We already have an average open rate of 20 to 45 percent, and with image blocking the reported figures have diminished over time. Now we've lost another 25 percent of our database before we even have a chance.

The second cost is that of the customer experience. Your message is critical to the timing and conditioning that you have established with your customer, and there is nothing worse than when your e-mail doesn't show up on schedule. This is especially true for time-sensitive offers such as financial statements, e-bills, and travel specials. Suppose I get my Rapid Rewards updates from Southwest Airlines, but my wife doesn't get my travel itinerary, which I forwarded on to her. What is the cost of such a scenario to both the consumer and the marketer?

Another cost is the degradation of your brand. There is a negative impact on your brand whenever your e-mail is filtered to the junk mail folder and gets sandwiched in with every gimmick and piece of spam. I compare this experience to a small convenience store packed with every item you can think of. Your premium candy bar is jammed in next to fake nails, cheap bulk candies and breath fresheners on a shelf that is so cluttered with merchandise, your brand gets lost. Through testing, we know people "scan" e-mail today anyway, so how do you brand amid the clutter? Not being placed at eye level in the display has a cost to your business.

The final cost to your business is opportunity. There is a cost to execute, analyze, monitor, resolve, segment and build e-mail programs. You still pay for the non-deliverables, so take 20 percent of last year's budget and just wash it down the drain. Now tell me if that's enough motivation to correct these issues.

So, let's do the math. Twenty to 25 percent of your database does NOT get your e-mail, and of the remaining 75 to 80 percent, only 20 to 30 percent give you a measured impression (open the e-mail in HTML).

Apparently, consumers aren't as worried about the issue of non-delivered e-mail as marketers are. According to the Pew Internet and American Life Project, 45 percent of consumers view pop-up ads as a problem, 52 percent feel spam is a big problem, but only four percent feel the arbitrary nondelivery of e-mail is a big issue. That's right, 20 to 25 percent of your e-mail does not get there--and your customers are NOT worried about it. Consider what the cost is to you when your customers don't miss your e-mail.

This slide from Forrester (although a few years old), still helps illustrate the costs to you. Twelve percent of e-mails bounce for some reason, and 10 percent get removed by spam filters, so out of every 1000 e-mails, 208 don't deliver an "experience." If you were to improve deliverability by 20 percent, 5 percent more of your audience would have the opportunity to see your message, which would translate to a 6 percent increase in opens/viewers and a 12 percent increase in clicks. Most deliverability companies can do far better than 20 percent. If I said I could improve your clicks by 12 percent, I'm sure you'd find budget for some of these deliverability solutions.

Let me know if you need advice on partners to choose, and I would be glad to help. I can be reached at dbaker@agency.com.

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