The big question these days is whether or not it still makes sense to be building a list of e-mail addresses to use for your marketing. The answer is not as simple as “yes” or “no” here’s why.
In the earliest years of the Internet, there were no barriers, very little security, and almost no threats to be worried about. Some might call those days the most innocent days of the Internet.
Consisting mostly of academics and geeks, the Internet was new, it was exciting, and there were only technical barriers to what it could do. In those days, e-mail got delivered every time, all the time, unless there was a problem with a server somewhere along the line.
In those days (I began marketing with e-mail around 1995) open rates of better than 80% were common, and in most cases, even expected! So early Internet marketers got into e-mail marketing fast and used it to sell most anything they could think of, and it worked.
Well, too much of a good thing will always lead to an opposing force, and in 2003 the public got a taste of that force for the very first time. Yes, the now ubiquitous spam filter was made public, first on America Online(TM), then quickly on other services like MSN(TM), Yahoo(TM), and Google(TM).
For marketers, this was a slap in the face with a cold, wet towel. Our e-mail messages stopped getting through, and for many of us, our entire business was cut down to almost nothing seemingly overnight.
But marketers are not the type of people who give up easily. Soon enough there were workarounds that allowed most of our e-mail to get delivered but fooling early spam filters.
Of course, that became a cat-and-mouse game because the spam filters were quickly updated and we then had to find new ways to fool them into delivering our marketing messages.
In the early days of spam filters, it was all about content filtering. The filters would look at each e-mail and decide whether or not it was spam based solely upon the words it found inside the e-mail!
The problem with this was that these filters caught all legitimate sales letters, newsletters, client communications and even order confirmations!
It didn’t take long before the entire e-mail system was broken. It was hard to get legitimate, client-requested e-mail delivered and there was absolutely no oversight into what was begin judged as being spam and what was actually legitimate e-mail.
Things have improved over the years, but e-mail will never again be the reliable system it once was since there are thousands of spam filters, black lists, and other forms of e-mail filtering that hinder reliable e-mail delivery.
So this begs the question, does it still make sense to use e-mail as a marketing tool?
Here are some things to consider:
Open Rates: In the early days of the Internet, open rates (the percentage of people who open your e-mail) were most often above 80%. In other words, 8 out of every 10 people who were sent your e-mail message would at least open it. Of course, back then it was common to see only a small handful of e-mail messages in your inbox on any given day. Today, because of the massive increase in the amount of spam, and the sheer number of e-mail lists we might be on at any time, it’s not uncommon to receive several hundred e-mail messages in any given day, which is why spam filters remain popular and are now used in one form or another by just about everybody.
Today, you can expect a decent open rate to hover at around 10% to as high as about 18%. While some smaller lists might see higher open rates, they are the exception. Imagine sending an e-mail and only 10 out of every 100 people will actually open your message. That’s the reality of e-mail today.
E-mail for Marketing
In the days before e-mail, marketers relied upon direct mail (yes, envelops, printed letters, and stamps) to get their message in the hands of their prospects. This was the most economical way to reach a very specific market at will.
What you should know is that the percentage of people who bought from a direct mail campaign was typically less than 2%! In fact, the average conversion rate (the number of people who bought) was 1 to 1.5%. Rarely did you see direct mail campaigns getting much better results than that.
Now, I gave you two different metrics, making it hard to compare today’s e-mail open rates to direct mail conversion rates. The thing about direct mail is we have no way of knowing how many people actually opened our mail! There is no tracking code inside a paper envelope! Hence, the different metrics.
But we can, and do, measure conversion rates from our e-mail campaigns and they are much, much lower, typically, then in the direct mail days.
So does it still make sense to use e-mail?
Here’s one way to look at it. If you can build a large list of people who you consider to be your ideal prospects, and can live with being able to reach only a fraction of those people with your marketing message, and you can generate enough sales to make it work, than e-mail is a good choice.
While not free, e-mail can, and does, work as a marketing tool for many businesses. It may not be as easy as it once was, but it still has a place in your marketing mix.
My suggestion: Don’t make e-mail your primary marketing channel as the trend among young adults is to avoid using e-mail altogether in favor of texting and direct messaging. E-mail may well be in its senior years.