Research Behind the Numbers: Email Call

A timely Forrester Research Brief points out that rising consumer fear about mail safety puts direct mail in jeopardy. It says that consumers are increasingly uneasy about opening mail in light of the postmaster general's announcement that anthrax bacteria could taint sealed postal mail.

To compensate for consumer apprehension about the mail, says Forrester, marketers should consider using digital marketing to accomplish their business goals, especially with the onset of the holiday shopping season. And, at a time when direct mail is undergoing some frightening prospects, email marketing is emerging as a viable alternative.

Forrester and other independent studies project between 150 and 227 billion commercial permission emails in the U.S. by 2003, with spending growing to $9.4 billion in 2006, and repeat customer email constituting at least half of that.

The Forrester brief goes on to say that to shift to digital channels, marketers should "crank up" email address acquisition. Even the most sophisticated direct marketers, typically having email addresses for only 30 to 40 percent of their customer base, will not be able to quickly shift their direct mail efforts to email. To migrate customers to email, the Brief suggests, marketers should send postcards that ask customers how they prefer to receive marketing communications.

But the Direct Marketing Association doesn't see it exactly that way. At the 84th annual convention in Chicago, H. Robert Wientzen, the chief executive of the DMA, said, "I don't see people switching to email. I tell people that it's coming, but nothing is as ubiquitous as the regular mail. It's still the most effective medium we have," with sales forecast to exceed $1.86 trillion this year.

Though direct marketers recognize the incredible cost advantage of email, and the ability to retain and market to existing customers who have given permission to be reached electronically, email remains relatively ineffective as a way to generate new sales leads. And, the direct marketers point out, while many people dislike direct mail of any kind, an even greater percentage of recipients routinely delete unsolicited messages without even reading them. As a result, email acquisition mailings yield relatively low response rates compared with regular mail, and can actually cost much more for each lead generated.

In an independent study, findings indicated that even though the email list rental has declined to $125 for 1,000 names, the total cost of acquiring one customer through email rose to $125, which is significantly more than the $66 average industry-wide cost through ordinary mail last year.

Though it's clearly a standoff today, the DMA agrees that electronic marketing is coming in the long run, and Forrester submits that the counter to spam is an ongoing campaign to develop a permission-based customer base, and "converse" with them to assure retention. This personalized direct marketing, the Forrester report maintains, will develop loyal customers with behaviors and attitudes that increase revenues and decrease costs.

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