BUSINESSWEEK ONLINE : DECEMBER 4, 2000 ISSUE
FRONTIER -- TRENDS

ONLINE EXTRA: Naughty or Nice: Christmas Promotions via E-Mail
The trick is to make it effective without leaving customers feeling like they're being spammed

A wave of small businesses will use the Web to get out the marketing message this holiday season, and e-mail seems to be the medium of choice. Forty-five percent of small businesses say they will be using e-mail marketing this year, vs. the 39% that did so last year, according to a survey commissioned by e-mail vendor Responsys.com in Palo Alto, Calif. For medium and large businesses, 33% will be using e-mail marketing this year, compared to 17% last year.

Why is the medium becoming so popular? First, there is the immense advantage of speed. An e-mail promotion can go from idea to completed mailing in less than an hour, compared to at least a few weeks for traditional direct mail, marketing mavens say. E-mail is also cheaper: Even an "expensive" e-mailing costs about 30 cents per name -- vs. $1 to $2 for each piece of direct mail. And with response rates upwards of 5%, a well-designed e-mail campaign can be more effective than direct mail.

But how do you make sure your e-mail campaign delivers? These tips will get you started on the right track.

* First, measure the effectiveness of your current marketing efforts. How much is it costing you to acquire a new customer? How much do you spend to generate a new order from an existing customer? Once you've got a handle on those numbers, you'll be able to tell if your e-mail campaign stacks up favorably.

* Don't spam. Only send e-mail to customers who have given you specific permission to do so. If customers are signing up on your Web site to receive e-mail, make sure your privacy policy is clearly posted. Make it simple for customers to get off your mailing list or to reduce the volume of mail they receive. And if you're collecting personal preferences, give customers the ability to change them. If a customer signed up to get information about their home town of Chicago, for example, let them designate a new city if they move.

* Test carefully. Before you launch a personalized e-mail campaign, send out a general mailing and track the response. Did the pitch resonate with one group as opposed to another? For example, did women respond in greater numbers than men? That information will allow you make the most of your mailing list by more effectively targeting customers.

* You can manage a pretty big e-mail list by yourself using off-the-shelf e-mail software, such as Microsoft Explorer and Netscape Communicator. But once your list exceeds 2,500 names, you'll probably want some help. Companies like Advaya, Digital Impact, and Responsys.com offer e-mail management services targeted at small businesses.

By Kimberly Weisul

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