Budget email marketing #1 Why do it?

This is the first of a small series of posts which covers email marketing from the perspective of those lacking the resources to simply copy the email tactics of a big retail chain or multinational IT corporation.

The insights come from an interview panel of email marketing folk who work closely with customers in small- and medium-sized businesses. They kindly consented to share their expertise with us through this blog.

We'll cover false expectations, knowledge gaps, quick ways to improve, how to compete with the big boys and delivery issues. [Rubs hands at the prospect.]

But first, let's begin with a fundamental issue...why should an SME stick scarce resources into email when times are tough?

We know email marketing works, but where's the particular pull for small businesses and marketing departments on a budget?

1. Costs

Though the industry is at pains to avoid labelling email marketing a "cheap" method, fact is that email is something you can do without breaking the bank.

More to the point, you can test the email waters without committing too many resources and you can start off simply. As Steve Adams, Vice President Marketing for Campaigner notes:

"The cost of sending email through an email marketing service is very low, with many plans starting for as little as $25 per month."

2. Success

The DMA regularly ranks email top for return on investment (ROI) among direct marketing tactics. Raj Khera, CEO of MailerMailer adds...

"Even if this ROI decreases due to the recession, it still blows all other direct response methods out of the water."

Dan Forootan, CEO of StreamSend reinforces the point:

"When times get tough and wallets get tight, customers also sometimes need a little added incentive to buy. Email marketing can be the perfect vehicle to provide that incentive."

"Because an email can easily be targeted and personalized, marketers can persuade their customer base to purchase with special offers and value-added services specific to an individual." (We'll look at some simple targeting ideas later in the series).

Low costs obviously make it easier to get a good return on your investment. But there's no denying that email marketing - done appropriately - brings in the money. The important words there are "done appropriately."

Email marketing ROI gets a lot of good PR. But that won't save you from poor results if you don't know how best to use marketing emails to further your business success.

Equally, the focus on ROI neglects the value of email as a long-term relationship builder.

Many small businesses rely on the personal touch and customer service to sustain business. And regular contact wtih customers and clients through email newsletters and campaigns has much to offer there.

3. Measureability and flexibility

Of course, down economies encourage more careful use of scarce dollars, which also plays to another email advantage: measureability.

As Dan Forootan notes, once your program is up and running and your list established:

"For as little as twenty dollars a month and five person hours, a SME can reach 2,000 customers and easily track and measure the success of the campaign."

Steve Adams quips:

"There's an old advertising saying that goes 'I know I wasted half my advertising budget, I just don't know which half.' With email marketing, you won't fall victim to that costly cliche."

The value of that measureability is improved by your ability to react to the numbers. Justin Premick, Education Marketing Manager at AWeber says, "...to me, it's not about saving money. It's about being agile."

Agile?

Email can tell you how well your campaigns worked in terms of direct responses, plus (as Justin explains):

"You can zero in on WHY it worked (or didn't) faster. And as you learn more about your audience, you can adjust your marketing accordingly, faster."

So, are SMEs seeing value in email?

Janine Popick, CEO of VerticalResponse told me:

"From what we've been seeing, email marketing as a retention vehicle seems to be the last thing SME's are pulling from their budgets. Customer acquisition seems to be where they are chopping...understandably, when you pay $15 to send out an email campaign and you get $3000 in sales, you're going to keep your retention programs over anything else."

Raj Khera confirms the trend, saying:

"We are seeing many companies cutting back on traditional, more costly marketing methods like print or trade shows and putting their marketing dollars into email."

He adds:

"A recession is a great opportunity for smart individuals who know how to capitalize on an opportunity to do really well and surpass those who are retreating."

See Part 2: where are the biggest expectation and knowledge gaps? What do SMEs need to understand about email marketing as they invest in this tactic?

Tags: email marketing, small business

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