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E-Mail Is a Vital Part of E-Commerce

January 12, 2001

According to eMarketer, New York, e-commerce revenue in 2000 is projected to reach $37 billion, almost double the 1999 figures. By 2010, the market may be transformed by broadband and non-PC Internet access, and e-commerce revenue could surpass $750 billion, accounting for 24 percent of all retail sales.

With e-commerce projected to soar, more marketers are investing in long-term direct marketing channels such as commerce-enabled Web sites and

e-mail marketing.

While revenue from the Internet may be a small percentage of your current business, few activities offer direct marketers as much opportunity for increasing sales and reducing costs as the Internet. But what steps do direct marketers need to take to ensure success? Integrating your current direct marketing online is the answer. However, moving your strategy online is only the beginning.

You may find that two-thirds of your current Web site buyers are already customers. There are savings from taking orders online. However, Web sites also offer an opportunity to capture interested prospects who are not already customers. Therefore, you should have your site registration prominently positioned on your home page. You can expect to convert 10 percent to 15 percent of your registered prospects in the first year. This is why some marketers consider registration to be the No. 1 function for their Web sites.

Capturing e-mail addresses should be accompanied by a clear message to your audience, a guarantee about the use of e-mail addresses and information collected on registration forms with a prominent statement on your Web site. This will help customers feel at ease about sharing their personal information.

In addition, providing incentives to online customers may encourage them to register for regular communication. Follow through by sending them relevant e-mails in the form of special offers or exclusive merchandise.

Your e-mail marketing channel must be coordinated with overall merchandising and marketing plans from the beginning. An annual plan should be developed for your e-mail buyer and prospect lists and coordinated with your annual postal mailing plan. Following the same seasonal themes and product category features helps ensure a coordinated image for current and prospective customers.

However, make featured items and offers different in each marketing channel. Having different discounted or lead products in each channel will encourage customers to shop multiple channels. Research shows that customers who shop multiple channels spend more each year. Also, do not be afraid to experiment with cross-channel promotions and rotate featured products on Web sites and in e-mails frequently.

Integrating your customer database across all marketing channels is a crucial first step. Often, e-mail addresses are housed separately from postal customer files. To accomplish this, it is necessary to collect more than just e-mail addresses on your site registration. Ask for name and postal address (you may note that this is optional to increase capture rate). At a minimum, ask for ZIP code and whether the customers have ever purchased from you before. This will allow you to classify them as customers or prospects and to append outside ZIP-based data to your file for targeting.

Customized product offerings to address each customer’s tastes and preferences can be created easily based on past transactional data and other survey data provided by the customer online. More than ever before, relevant e-mail content customized to the individual customer has proved to increase prospect conversion and sales to existing customers. Opportunities for targeting and personalization in e-mail far exceed those available in other channels. Comprehensive customer information is required to segment customers and enables direct marketers to achieve true one-to-one communications.

Existing online customers and registered prospects should receive regular e-mail communication. Again, following your annual postal mail plan, an annual e-mail plan should be developed. Frequency will vary by marketer and its objectives. When you develop your plan, do not forget all the reasons you have to send an e-mail. These include newsletters, news flashes, new product/service announcements, new product availability, promotional discounts, order confirmation, personalized thank-you messages, shipping status, bill fulfillment, customer service, alerts, reminders, expiration notices and customer surveys.

These event-based communications should be programmed into your mail plan and should be accompanied by an opportunity to buy. Our experience shows that offers made in these types of communications get twice the response of regularly scheduled e-mailings.

The Internet is an excellent method to communicate with current customers, but now it is time to think about your online customer acquisition strategy, one that should be coordinated closely with your offline plans. Most direct marketers have tested banner advertisements and third-party e-mail lists. However, most "mail to live" marketers have had trouble achieving an acceptable cost per order through these channels.

In recent months several programs have designed ways for direct marketers to collaborate or exchange e-mail prospecting opportunities in cost-effective ways. Important questions when considering these programs are: Do you control how often prospecting messages are sent to your customers and from whom? Is the e-mail to your customers coming from you or a third party with whom they are not familiar? Would participation in a program reduce the effective number of mailings you can make to your own file? How are you compensated for allowing others to prospect to your file? You should investigate and test alternative methods of prospecting for new customers and establish performance standards for your organization, including delivery costs, response and conversion rate, and cost per conversion.

The future of successful e-marketing lies in creating multiple channels, since this results in higher sales per customer. There is a natural synergy between e-mail and direct marketing in that the process and analysis are the same. Integrating the Internet into your merchandising, marketing and creative planning process will allow your business to create an e-commerce process that successfully mirrors the classic catalog delivery business.

Employ personalization and customization wherever possible to make e-mail and Web sites relevant to the consumer. Using your knowledge of your customers will drive a pathway of growth and profitability to your business.

• Keith Wardell is president and founder of, Fairfax, VA, an e-catalog retailer. Reach him at


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