Email Marketing
by John Eberhard

There are basically three types of email marketing: 1) opt-in email marketing, 2) house list email marketing, and 3) bulk spam.

Opt-In email Marketing: Opt-in email marketing works like this. There are various web sites and companies that compile lists of email addresses of people who are interested in receiving information on a particular topic. The people on a given list have chosen to be on that list – they have "opted in."

Let’s say for instance that there is an opt-in list for people who are interested in golf products (and there are many such lists available). The people who have opted in on that list WANT to receive email about golf products. They have opted in with the understanding that they will receive such email, and they have the option to opt-out at any time.

So the owners of that golf opt-in email list will rent the list out to companies that have golf related products for sale, like golf clubs and other equipment, instructional videos, books and so on.

There are hundreds of opt-in lists available, with people who have opted-in to receive information on various topics, to receive newsletters, etc.

House List Email Marketing: Companies who sell products and services will collect the email addresses of customers and prospects. This is called a "house email list", and is made up of people who have had some contact with the company and who usually have given their permission to receive information from that company.

Companies will send various email campaigns out to their house lists, notifying people about new products and services, special deals, special offerings to customers only, special events, etc.

Bulk Spam: Although there is some debate and variance of opinion on what constitutes "spam", for our purposes we will define "bulk spam" as promotional email that is sent out to large lists made up of addresses of people who have not agreed to be on any opt-in or house list.

Most Internet Service Providers (ISPs) such as Earthlink and others, will try to prevent people from sending out bulk spam from their servers, and many will terminate the email account of anyone caught sending out large amounts of bulk spam.

A Major Change in Email Marketing

There has been a dramatic change in the email marketing field over the last two years.

The change has been brought about by an incredible over-saturation of promotional email being sent out to people who have not opted-in to receive it – in short – "bulk spam." You’ve seen the emails for mortgage refinancing, for Viagra and other drugs, for drugs that purport to enhance parts of one’s anatomy or improve one’s sex life, offers of discount software, free iPods, pornography, the list goes on and on.

The problem with the vast majority of bulk spammers is that they do not follow practices that have evolved as accepted practices amongst legitimate email marketers, most of which are now Federal law under the CAN-SPAM act (see end of this chapter for an analysis of CAN-SPAM). The two most egregious violations that are made routinely by vast numbers of spammers are: 1) not allowing the recipient to opt-out of future mailings (or pretending to have an opt-out mechanism but not really taking people off their lists), and 2) having deceptive subject lines in their emails. Both are now violations of US Federal law.

Unfortunately, the result of the incredible avalanche of bulk spam, and the routine violations of laws mentioned above, is that opt-in email, once a great way to make money (and one of the authors has used this medium to make millions of dollars for clients) is now for all intents and purposes - dead. People are receiving too much bulk spam to pay attention to any type of unsolicited email – they just hit the delete button. This is a shame but it’s the reality.

The Good News

Now that we’ve given you all the bad news, here is the good news. There are still some specific uses where email marketing is quite effective:

a. House List Email Marketing: Email marketing to a house list is extremely effective, even given the saturation problems today. People are used to receiving email from the companies that they do business with, and they are generally interested in and accepting of special offers, discounts, new products, customer service and tech support type traffic.

So building a house email list is extremely effective, extremely profitable (costs to send to it are negligible, especially in the beginning), and the larger your house list becomes, the more valuable an asset it is to your company.

b. Business to Business Email Marketing: If you are involved in business to business marketing, and can find some opt-in email lists of your target buyers, you will generally find that they will still respond to offerings of products and services that they need and want. People tend to get fewer promotional emails at their work email address than at home.

You will have better results in industries that have not yet been hammered by email (such as the insurance field for instance) and you will have poorer results in those that have been hammered (like IT professionals).

Now that we have give you some ideas of where email marketing will work and where it won’t, now we will outline the logistics of how you do it. We have mapped out seven of the most important aspects of email marketing and how to do each step right.

1. The Purpose

One thing you want to clarify before you get started is: what is your purpose with the email marketing campaign? Do you want to generate leads, or direct sales?

Generally, if you are selling a high-ticket item, your initial job will be generating leads. You want to get lots of names and email addresses, then have your sales people work them, and mail to them repeatedly with sales oriented pieces until they buy the product. Generally you will not get people to buy a high-ticket item over the Internet on their first contact with you. It will take repeated contact and repeated familiarity.

Generally in Business to Business (B2B) marketing, your email will be trying to generate leads.

If you are selling a low ticket item such as a book, vitamins, CDs, etc., (a Business to Consumer - B2C - campaign) your purpose with the email will be to get the person to your web site where they will buy. Then if they do not buy on their first visit it is a good idea to get them to fill out some sort of form for a soft offer so you can get their name and email and can send them repeated information until they buy. You can set up a special small page that pops up whenever someone goes to leave your site.

In general, we think the email you send out should be short. It should promise some sort of benefit and then refer the person to your web site. Then, when they get to your web site, keep them isolated on one page, with the only links available being to the next page where you want them to go. If you give them options to go all over your site you will not be controlling the experience well enough to get them to do what you want (and they won’t). Give them minimum options. That way you will get more people filling out your form and less people wandering all over your site. Then, after they have filled out the form and you send them to a "thank you" page, then you can include links to the rest of your site.

2. The List

In email marketing, the list is the most important element in determining your success, just as it is in direct mail. We recommend that you only use opt-in lists, or your own house email list.

If you do not have a house email list, we suggest you start compiling one immediately. The response from this type of list will always be higher than from an opt-in list.

Over the last six years, the number of opt-in lists and the wide variety of topics have literally exploded. You can find very specific lists of certain types of publics, which allows you to target your email to the type of public that buys your products. As mentioned above, we believe that business to business type opt-in lists can still be effective, but that consumer lists are not.

The largest of the companies supplying opt-in lists is www.postmasterdirect.com, which has millions of names to rent in a wide variety of categories. See our Resource Appendix for an extensive list of email list rental companies.

The cost to rent an opt-in list varies, depending on which company you rent from and how specific the list is, and whether you are able to select criteria like certain states or US-only or other criteria. Typically the cost for B2B list rental will range from 10 cents per name up to 40 cents per name, with some lists higher. The cost for B2C lists are usually less.

Certain companies, including Postmaster Direct, will give you deep discounts for mailing the second or third time to the same names, on some lists. So if you have three pieces that work well, you can do a triple mailing and your costs really come down for the second and third time.

We would recommend that if you can find a list from a list broker like Postmaster Direct that is truly your targeted public, and it is a business to business public, then you should test an email marketing campaign. If you find one that is "sort of" your targeted public, then we would say don't do it, or test it only in small quantities.

3. The Offer

What you are offering is one of the most important elements in an email marketing campaign or in any type of promotional or marketing campaign.

By "offer" we mean: What are you offering to the person that is going to entice them to respond to you?

We will consider that there is a scale of offers, from a "hard offer" to a "soft offer", and including many things in between. A "hard offer" is something like "Buy our product today and receive a special discount," or it could simply be "Call now and buy our product."

A "soft offer" is usually something offered for free. About the softest offer you can get would be giving away something valuable with a sweepstakes. The problem with this type of offer is that you get a lot of responses but most will not care much about your product and will not be good sales prospects.

But there are many soft offers one can make that will attract people that are interested in your product, such as offering free information or some other free item related to your type of product. If you offer a research paper on a problem your product solves, all those responding will have some degree of interest in that problem. Thus a high percentage of those responding are likely to be qualified leads.

For email marketing to raw public opt-in lists, meaning lists of people that have probably not heard of your company or product before, we recommend going with a soft offer. One of the best soft offers we have tried that has worked extremely well in an email campaign is to offer the person one of three free gifts in exchange for filling out an online survey. Then on the survey form, you get their name, email address, plus information related to their usage of or need for your product.

Your free gifts could be things like a special report or white paper related to your type of product or your industry, a free subscription to your email newsletter, or some other free item that is related to your type of product or to your industry. The fact that it is related to your industry is important, because then only people who are relatively qualified and relatively interested will respond.

4. Test in Small Quantities

It is absolutely vital that you come up with several different emails and send them all out to small quantities as a test. What do we mean by small? Under 1,000 names for each email. This is where it becomes important to select a list rental company that will allow you to do that.

There are companies out there that will allow you to send out smaller minimums to their lists and to split them up into a number of different segments, with each segment receiving a different email. They will charge more per name to do this, but the overall cost for your test is then much less.

For example, we once sent out five different emails to a list of 2,500 computer system administrators, at a total cost of $825.00. Then we carefully tracked the responses to each of the emails, found which one got the best response, and THEN sent out that email to one of the Postmaster Direct lists of system administrators (5,000 names). And we got great response. (Bear in mind that IT professionals have been hit pretty hard with email over the last few years.)

Once you have your test done and you see which email got the best response, you then send it out to the bigger list. This is called a "rollout". You can now confidently send out to the larger list because you know it worked well on the smaller list. Of course, you would make sure that your rollout list is basically the same type of public as your smaller list.

And when you are doing a rollout, you always track your responses carefully and make sure you are getting a similar response to what you got with the test. In direct marketing texts they usually tell you to test, then rollout on your next mailing to a list that is 5 times the size of your test (no larger). Then on your next mailing, assuming you have a really large list you're mailing to, you can then roll out to a list that is 5 times the size of your second mailing. In other words, each time you send out to 5 times the size of your last mailing. That way, you watch your responses each time and make sure they are keeping pace with your test. This applies to email as well as postal address mailings.

A wrong example of how to do this would be to send out a test of 500 emails, then a rollout the next week of 250,000 emails. If your rollout list doesn't respond as well as your test list, you're in trouble, because you just spent a lot of money and won't get a good return on your investment. So you rollout gradually and track your response every step of the way.

We'll talk more about tracking email responses later in this chapter.

And you may ask, what should you test? Well test different offers. Try some hard offers and some soft offers and everything in between. Test different headlines (but not deceptive ones). Think of different ways to present the information.

We had a successful email that offered one of three free gifts in exchange for filling out a survey. The piece was doing well on our rollout. It was an HTML email and was signed by the sales director of the company and had a scan of his signature. But then we had a bright idea. The target market was 90% male. What if the email was signed by an attractive female, had a picture of her, and included a WAV file (i.e. a sound file) of her voice asking the person to fill out the survey and receive a free gift? Well we tested this and it doubled the responses! It wasn't a sexy "come hither" voice or anything, because we felt that would have been really tacky. It was just a cheerful, upbeat female voice saying "Fill out our survey and receive a free gift." We got double the response.

The important thing was that we already had a successful piece, but we continued to test new ideas (always on smaller lists - that way if it bombs you are not losing much), while we were running our successful piece. In this case we found something better and replaced our formerly #1 piece. So it's important not to rest on your laurels but to continue to test new ideas.

You can't really KNOW for sure what will work best to your target public until you test. Even when you have surveys of your target public and you design your promotional materials around those surveys, it is still smart to test small, then roll out big.

5. Formatting the Email and Response Form

I recommend going with an HTML email, which basically looks just like a web page, can have graphics and animations and even sound, and can have links to whatever web pages you want to have.

HTML emails are very common and most of the online newsletters are sent out as HTML emails. Our tests have so far shown that HTML emails with graphics AND sound outpull simple text emails.

The way you put together one of these is to simply use any web authoring program, such as Microsoft FrontPage or Adobe GoLive (These are two excellent programs. GoLive is the more sophisticated of the two). You simply design your email as an HTML document and save it on your hard drive.

One trick you have to know here is that for any graphics you want to include in the email, those graphics have to be online somewhere, and the link within the HTML document has to be to that online location, i.e.:
http://www.yourwebsite.com/yourgraphic.jpg

You cannot simply pull in the graphic from the same folder on your hard disk as where you are saving this HTML document, while designing the email. If you do, when you send the email, it will show just a blank box. The reason for this is that with an HTML email, it does not send the picture files along with it. It just points to where they are located on the Net, then pulls them in from there, when the recipient views it in their email program.

Make sure to send a test email to yourself before sending out to the big list, to make sure everything is displaying and working properly, and to make sure that all your links work properly.

Bear in mind that some people on opt-in email lists cannot read HTML emails, and the larger opt-in list houses have a field when the person opts in, asking them if they can receive HTML emails. So for the people who can't, you will need to create a text only version of your email. Make sure you limit the width of each line of text in your text version, usually to 70 characters.

6. Tracking Your Responses and Response Codes

It is vital to track the responses to each separate piece that you do. We assign a 4-digit code to each email that we design. Then we set up the CGI script so that the subject line of the email response that comes in from the person includes the 4-digit code, i.e. "2035 Survey Response". That way, you can easily count them, you can sort them in your email box, set up features in your email software to automatically put them in subfolders as they come in, and even set up autoresponders to send them your initial automated response back.

The most important aspect of this is being able to count the responses of course. We assign a separate code to each piece, and we assign a new code to it every week even when that same piece goes out. Why? Because for one thing we can see how much new response is coming from this week's mailings and from previous weeks' mailings. Also, if there is some change, even a minor one, to your email, or if it is sent to a new list this week, you can now track exactly how the change worked or how the new list worked. Or, let's say you send out the same email this week and it is to the same list, but now it gets significantly better or worse response than last week. You are now alerted to the change and can take steps to figure out what caused it to do better or worse.

Obviously you want to be able to reinforce any positive change and drop out any negative change.

Also, let's say you are doing direct sales and your sales team works with a contact management software program like GoldMine or Act. When they enter the new leads or these are imported into the program, you can record the 4-digit code as the source of the lead and later track the sales from that piece.

So the thing to remember is: code every single piece that you do and then vigorously track the responses to every single piece. That way you can manage the campaign, figure out your percentage of response, and reinforce what's working well and drop what isn't. We recommend doing this in any campaign, not just direct email, and many experts such as David Ogilvy recommend this as well.

7. Responding to the Emails That Come In - Managing the Flow

If you're getting less than 50 responses a week, you can manage the workflow by hand and it will not really be a problem. But once you start getting hundreds of responses, you will need to automate the flow, so you don't get bogged down in the repetitive actions in handling the leads.

Probably the first thing you want to do is set up a separate email account and send your leads to that account. Then I recommend having them come into an email program on your desktop, but that is different from the main one you use for your main email account. For example, if you use Outlook for your main email account, you could set up Outlook Express for your leads account.

Both Outlook and Outlook Express allow you to set up tools that will automatically move emails coming in that have certain criteria, to sub-folders that you specify. These are called "Mail Rules," and you could, for instance, specify that any email that has the words "Survey Response" in the subject line, gets moved to a certain sub-folder. That way it's easier to manage the flow.

Another valuable tool is an autoresponder. This is a software program that will automatically send out a response to the person, which you specify, and can include whatever text you want and also can include a file attachment. So let's say you are offering a free report or something like that. You can set up an autoresponder so that it automatically sends out that report to people who send you an email with a subject line that contains the words "Free Report." You will remember earlier that when we have our CGI scripting done, we can specify what the subject line will be of the email responses coming in.

Autoresponders come in two varieties, ones that work on your desktop, and ones that work on the Internet. We researched packages that work on the desktop and ended up buying one called Promasoft Autoresponder (www.autoreplying.com). For a company it costs under $300 and for a home based business it costs $100. There is another similar product called Mailloop (www.mailloop.com) that costs about $375.

Promasoft Autoresponder allows you to set up autoresponders using filters based on specific key words or phrases that you specify. So if the subject line has the words "Survey Response" in it, the person gets automatically sent a certain response. If the subject line says "Free Report" he automatically gets a different response, along with the file attachment if you want.

You can also specify your filters so that once the criteria has been met, it automatically forwards that email to whoever you specify. You can use this feature to automatically forward all the leads that come in to your sales department. Or you can set it up so that only certain emails get forwarded, based on how the person answers the questions in your online form. So you can use the online form to qualify the person and send only the ones to sales that fit certain criteria.

One more important aspect of managing the incoming emails is getting them into a database, or into multiple databases depending on what type of response it is. Both Promasoft and Mailloop will do this for you. This makes it easy to then send out sales promotion to them the next week or a few weeks later, etc.. You can also set it up to import the contents of the database into a contact management software program like GoldMine.

GoldMine now offers a feature where you can set up an online form that imports the record directly into GoldMine, which of course saves time.

The CAN -SPAM Act

On January 1, 2004, a new Federal law went into effect called the "Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003." It was cleverly titled so that the acronym is CAN-SPAM.

First of all we want to say that we are not attorneys and nothing in this chapter constitutes legal advice. We advise you to get a copy of the law, and review it with your attorney. A copy of the law can be gotten off our web site at:
www.realwebmarketing.net/can-spam-law.pdf

The new law provides harsh penalties for certain actions, which if you are a responsible business-person, hopefully you won’t be doing anyway. However, the law also changes the landscape of bulk email marketing rather significantly, and therefore all business-persons and marketers involved in sending multiple emails for marketing purposes, need to know about the law.

The Harsh Stuff

1. You can’t knowingly access a protected computer without authorization and intentionally initiate the transmission of multiple commercial electronic mail messages from that computer.

2. You can’t use a protected computer to relay multiple commercial email messages, with the intent to deceive recipients or an ISP as to the origin of those emails.

3. You can’t materially falsify header information in multiple commercial email messages.

4. You can’t register 5 or more email addresses falsifying your identity, and then initiate transmission of multiple email messages.

5. You can’t falsely represent yourself as the registrant of 5 or more Internet Protocol addresses, and then initiate transmission of multiple email messages from those addresses.

"Multiple commercial electronic mail messages" are defined, for this section of the law, as more than 100 per day. The penalties for violating the points above include fines, imprisonment ranging from 1 year to 5 years, and forfeiting of property including money you made from the emails, depending on various factors (5 years is for committing a felony via the emails). Those who pass sentences in such cases are instructed to consider enhancing the sentence if the violator harvested the email addresses from web sites or used randomly generated email addresses. So don’t do any of that stuff above!

Other Points

a. Deceptive Subject Line: You cannot use a subject line in any commercial email message that is likely to mislead the recipient about the contents or subject matter of the email.

b. "Askoffs": Any commercial multiple email message must contain a functioning return email address or Internet based mechanism, conspicuously displayed, that allows the person to request not to receive any future emails from the sender. This can be in the form of a menu that allows the person to choose to receive some types of email and not others, as long as it includes an option to not receive any future emails from the sender. This function must work for a minimum of 30 days after the email is sent.

c. Any request not to receive future emails must be handled within 10 days, i.e. the person’s email address must be taken off your list. It’s illegal to send anything to that person 10 days after an "askoff" request.

d. The laws requiring a company to take a person off their email lists within 10 days, also applies to anyone sending email on behalf of a company. This would include distributors, affiliates, etc.

e. These points don’t apply if the person asks to go back on the list after asking off.

f. There must be a clear and conspicuous identification that the message is an advertisement, although the law doesn’t currently define how that should be done. The law requires that within 18 months after it went into effect, the FTC must make a recommendation that the letters "ADV" or some other comparable identifier be added to the subject line. But that is not part of this current law.

g. You must include a valid physical postal address in your email.

h. By May 1st the Attorney General is supposed to prescribe clearly identifiable marks or notices to be included in sexually oriented material so that people can filter those emails out. Violating this one will get you a fine or imprisonment of up to 5 years.

i. Attorney Generals of states can sue someone for a) falsifying headers, b) deceptive subject lines, c) not including a warning for sexual material, d) showing a pattern of not having a working removal mechanism, e) showing a pattern of sending to someone after they asked to be off, and f) showing a pattern of not clearly indicating this is an ad, and not having a physical address in the email. The penalty for this can be up to $250 per email sent, for a maximum of $2 million. (Yikes!) The penalties can be reduced if you had implemented some method to prevent these things but they failed, or if you’ve implemented remedies since the infraction.

j. An Internet Service Provider can bring a civil suit against a person or company for a) falsifying headers, b) deceptive subject lines, c) not including a warning for sexual material, d) showing a pattern of not having a working removal mechanism, e) showing a pattern of sending to someone after they asked to be off, and f) showing a pattern of not clearly indicating this is an ad, and not having a physical address in the email. The penalty for this can be up to $100 per email sent for false headers, and $25 per email sent for everything else, for a maximum of $1 million.

k. The law says that the FTC must provide a timetable within six months of this law going into effect (July 1) for establishing a nationwide Do-Not-Email registry.

l. The law does not allow individuals to sue, as they currently can, for instance, for receiving an unsolicited commercial fax. But it does request the FTC to submit a plan that provides for substantial rewards (20% of penalties) for anyone being the first in turning a violator in.

m. None of this applies to a "transactional or relationship messages," defined as emails used to facilitate, complete or confirm a commercial transaction, send warranty, product recall, or safety information, send information on changes in terms or features, or send account, subscription, membership, loan, or other commercial relationship information.

Analysis

OK, all that is pretty scary. But if you keep certain points in with your bulk emails, you should be safe. As we said before, we are not attorneys and you should consult one. But here’s a summary of the law as we understand it.

1. Don’t use someone else’s computer to send multiple emails, use someone else’s computer as a relay, falsify header info, or register email or IP addresses under a false identity. The harshest penalties are for these actions.

2. Don’t use a deceptive subject line.

3. Include a mechanism for people to request to be off your lists, ensure this is enforced company-wide (and even including any distributors and affiliates who send emails on your behalf), and do not send any emails to that person 10 days after their request.

4. Clearly identify your email as an advertisement (though the law doesn’t stipulate how this is to be done). Within 18 months this will be clearly defined, probably with an "ADV" in the subject line.

5. Include a physical postal address of your company in the email.

You’ll notice that much of this is not being enforced yet, based on the wild number of emails you and I receive each day that contain deceptive subject lines, don’t include a working opt out mechanism and so on. But once the government gears up to enforcing the law, you will see a major change in the landscape of bulk email. And hopefully they will concentrate on the really gross violators, rather than legitimate marketers who make an occasional mistake.

But the safest thing is to know about the law, study it with your attorney, and follow the points. If you do you can send bulk email safely. And we should point out that if you work with one of the big, legitimate email rental houses, such as Net Creations or Worldata, they will help you ensure that you comply with all aspects of the law, because their business depends on it. So they know it cold.

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