Why is Email Advertising NOT for You?
That’s right. We said it. Email advertising isn’t for everyone!
Email is the most cost-effective and measurable digital marketing channel to reach new customers. It is a powerful way to connect with people and has remained a strong source of leads over the years. People prefer communication via email and by 2019, the number of active email accounts will increase to 5.6 billion. Furthermore, statistics show that email delivers the highest ROI above other media channels. In addition, email advertising increases the lifetime value of the acquired customer. Over time, new customers will spend more on your product or service, which increases the return on your initial investment in the email campaign.
Email is a great tool that should be used for promotions, retention and reactivation of every company’s database.
So why is email advertising to new customers not for everyone? Let me explain.
Reason #1: “I only want to target a small geo.”
Email marketing works best when your product or service is for an expansive geographic location. So if you are targeting only a few zip codes for your email campaigns, your email campaigns will not be cost-effective in terms of ROI. When you have a nationwide campaign available to most US consumers, not only will it be more profitable, but it will also reach a huge base of potential customers simply due to sheer volume. If you have a campaign that is available to consumers internationally, keep in mind that there are factors such as household income, language, compliance and other regulations that come into play and can be a barrier from reaching your targeted audience. If this is the case, talk in-depth with your email agency about ways to effectively target various demographics worldwide.
If you are a business geared toward small audiences (such as a local restaurant) and you want to reach a particular geo and dedicated email campaigns aren’t for you, programmatic is the way to go. With programmatic, the ads will be served only when viewer IPs are within the specific IP ranges that you are targeting. LiveIntent and Power Inbox have that capability.
Reason #2: “I have a small daily budget.”
Email is an extremely scalable channel and will not work with small daily budgets. Email publishers are looking to work with advertisers who are able to sustain high volumes of new prospective consumers. In essence, the cost of opportunity is the most important measure for the email publishers, and scalability is an important factor when aligning with the right email campaign.
If you do not have the capability to support scalable volume of new customers, the best route would be to source your own data and deploy your own small scale email campaigns via an ESP. Here are the top 5 ESPs we think highly of: iContact, MailChimp, Oracle, Marketo and Campaign Monitor.
Reason #3:“My product/service has a high initial cost to the consumer and the purchase happens online.”
Email is an impulsive channel. So if the initial cost of a product or service is high and the customer is expected to pay up front on the site, then the email channel is less likely to work. If the initial cost is low, or if you have a call center that can effectively close lead generation traffic, the customer is more likely to make a purchase via email.
For this scenario, the 3 main factors that come into play are: 1) having a great lead generation plan, 2) proven and effective monetization model and 3) a capable call center. Ideally, you need to have a team of closers and a process that reaches out to every lead in a matter of seconds/minutes, with a well-planned cadence of text, phone and email follow-ups that maximize contact rates. Your email agency should help you build a soup-to-nuts process that generates high-quality leads and effectively sells the product or services on the phone. You will need a large call center to support a large volume of sales calls and contact consumers in a timely manner. The ability to process leads and service potential customers quickly and effectively is crucial for successful email marketing. The amount of leads you receive must not exceed the bandwidth of the call center.
For example, if you receive 100 leads within a 10 minute period, but only have 5 people in the call center, user engagement could be lost due to wait times. When you receive a lead, you need to call the customer back within a few minutes while it’s still fresh in their mind to maximize your close rate. If you have a small call center and cannot handle the amount of leads received, you will likely lose out on potential sales. Reason being, if it takes too long to get back to a potential customer the contact rate drops drastically.
If your product/service has a high upfront cost that has to happen online without a call center intervention, we would use one of these top 6 outsourced program management (OPM) agencies to get your affiliate campaigns up and running: Gen5, MGECOM, iAffiliate Management, Affiliate Manager, Acceleration Partners and WebFX. Alternatively, you can manage your own affiliate program on Commission Junction (CJ), Rakuten LinkShare, ShareASale and Pepperjam.
Reason #4: “I want to target a very specific audience”
Email marketing works best when you have a product or service that appeals to a large demographic for the same arguments explained in Reason #1. For example, if your target audience is females, age 21-30, who have interests in candle making and bookbinding, you have a niche market, which dramatically decreases the number of people that would want to receive an email from your brand.
For brands with a small niche market, we recommend you use social media platforms, such as Facebook, Instagram and Twitter to manage your own advertising campaigns because you’ll have the capability to fine tune your target audience and reach a very specific pool of potential customers. You may also consider Google Adwords and Google Adsense to manage your own search ads.
Reason #5: “My product or service isn’t Email Friendly”
There are certain products and services that are known to trigger spam filters. The ISPs (Yahoo, Gmail, Hotmail, Comcast, etc.) block certain categories automatically due to a bad reputation of deceiving advertising. Examples include verticals like diet, bizopp, forex, e-cigarettes and skin care.
As you can tell, new customer acquisition via email may not be ideal if you fall into any of the above scenarios. However, if any of the below apply, email may be the most cost-effective channel in your marketing portfolio:
- You have a direct response campaign with a strong call to action and an appealing value proposition to a wide-range of consumers that will give them a reason to click and buy.
- You advertise nationwide.
- You have the bandwidth and need for scalability and fast growth of your customer base.
- You are looking for a cost-effective lead generation strategy that will help you acquire new customers online with virtually no fraud.
- You want to use an advertising channel that has the highest return on investment out of all traffic sources, when it comes to cost of acquired consumer.
- You want to attract engaged customers with high lifetime value.
Don’t go into email advertising blindly; it’s not one size fits all!
Still not sure if email is right for you? Contact us! We can help.