Email Marketing

After this week’s discussion post, I thought I would write little more about E-mail marketing. I always thought that email marketing was not worth spending time and money for until I learned some facts about it. I mentioned in my discussion post that email usage has been on decline (Data source: www.Forbes.com) but according to few other sources, sales from email marketing has been on rise over the past few years. 91% of customers still use email. Even though social media use has increased over past few years, email is still the most effective tool to build 1-on-1 relationship with customers. Usually social media is an environment fo r group talks or general discussion and hence less personal than email. Email conversion rates to purchase are 3 times more than that of social media. Email provides an amazing ROI of 4,300 percent (Source: US direct marketing association). No other marketing channel provides an ROI as high as this. According to a direct marketing association:

• -          Email generates $39.4 for every dollar spent
• -          Search generates $22.38 for every dollar spent
• -          Display generates $19.71 for every dollar spent
• -          Social media generates $12.9 for every dollar spent

Below chart shows another fact about email marketing being a far more effective e-commerce customer acquisition channel.

Cross Channel Shopping/Marketing

After listening to Roy Wallen’s guest lecture, I thought I should also give my 2 cents on cross channel shopping/marketing. Consumers now a day are relying on more than one channel of shopping/marketing. People are learning about products through one channel (television advertisement, printed advertisement, internet or word of mouth), doing their research using another channel (i.e. internet reviews, price compare etc) and purchasing the products through another channel (i.e. internet, phone or in store). Recently I bought a car and it was a big decision for me because of the amount of money involved and number of options available. My first challenge was to find out my options (such as new/used, SUV/sedan, FWD/AWD etc.) based on my budget). I used internet to learn about user reviews and compare prices then I asked my coworkers, friends and families to learn about their experiences about different brands. I checked out auto magazines and printed advertisements to learn about different deals and finally went to dealers to take a test drive and purchase. I used more than one channel of marketing to make my decision.

I also completely agree with Roy on his point that customers don’t make distinction between channels. Customer experience is cumulative so companies should try to re enforce their brands and provide positive customer experience on multiple channels. For example, I bought a GPS on Wal-Mart website and chose to pick it up from a nearby Wal-Mart store. When I tried it for couple of days, it kept freezing up on me so I went to the same store from where I had picked it up and told them that the product was not as good as I thought and I wanted to return it. The Wal-Mart store manager told me that they could not take it back since I had bought it on Wal-Mart website and I would have to ship it back to Wal-Mart warehouse in order to get my money back. I considered it as a bad experience from Wal-Mart regardless what channel I used to buy the product and probably avoid shopping from them again.

According to an interesting study done by Wharton School, University of Pennsylvania, two thirds of all shoppers regularly use more than one channel for shopping. Click here to access the study results.

Also, according to this study, multi-channel shoppers are most loyal and likely to spend more money than mono channel shoppers. This is because shoppers that use more than one channel are likely to do more research and hence they clearly know what they want and where they want it from.

So, it is very critical for marketer/retailer to make sure that they treat customers same (i.e. positively) on every channel and give them the best treatment regardless where they buy it from. Customer should be able to return the product that they bought online or use the coupon that the got online in store. Some of the industries that provide best cross channel shopping are fast food chains (i.e. Domino’s, Chipotle) and Banks (i.e. Chase).

Future of Advertising and Analytics

After learning about Advertising, Analytics and KPIs this week, I came across this very interesting HBR article “Advertising Analytics 2.0” written by Wes Nichols. The article talks about the future of advertising. Big companies use multiple channels of marketing to advertise their products and services. The article talks about how traditionally marketers have been analyzing advertisement performance of each source (such as TV, printing and internet) independently and reallocating their advertising budget based on that analysis.

Do you agree with this? Or do you think that the sales numbers can not be broken down by each independent source of advertisement? The article gives a very good example of how purchase could be a result of combination of information provided by multiple sources of marketing. For example, now a days customer may watch an advertisement on TV then see a bill board or printed advertisement with a special offer and then check out user reviews on internet before making decision. So one can not say that the conversion was attributed solely to the internet marketing just because that’s the only place where consumer activity can be effectively tracked.

It is true that online marketing through search engines and social media can provide you more bang for buck because of better ability to target customer but marketers should look at interactive effect of all advertising sources in order to optimize their budget better. Cross effects between channels are very difficult to capture. Companies like Target, Walmart, Gap and Macy's  have had some success optimizing their sales using multiple marketing channels but still there is a lot of research that is being done to create better model that can help companies find out the best combination of marketing channels for their products/services. This is the future of advertisement and analytics.