Learning Hub | E-Mail Marketing

What is Email Marketing and How Does it Work?

August 3, 2016 | Jon Teodoro

What is Email Marketing?

With the days of snail mail creeping to a halt, marketers are having to come up with ingenious ways to reach consumers’ mailboxes – or maybe we should say inboxes.

Email marketing, as this endeavor has been dubbed, is the overarching term that covers all forms of email communication as long as the message aims to build customer loyalty, promote a brand or advertise a business in any fashion.

Whenever a corporation sends commercial messages to a group of people, it is utilizing email marketing. The most common types of messages include advertisements and business requests or solicitation of some kind. However, messages can be informational, linking to a blog or article post, as well.

As a marketer, it is important to recognize which messages are appropriate for which consumers. In order to optimize the return on your email marketing, you want to gear your messages toward the different groups of people at each stage of the Buyer’s Journey: awareness, consideration and decision.

Maybe a consumer signed up for your email list but has never done business with you. Maybe the target is a loyal customer that you know takes advantage of every promotional sale.

Whatever the stage, email marketing can help you generate visits to your site and leads for your business. But, the messages must be effectively constructed to get over the two main hurdles in your way.

First, you need your subject line to entice your receiver to read the message rather than send it directly to the trash. Secondly, you need the content of the email to persuade your reader to click through to the next step, whether that be shopping your Labor Day sale or signing a petition for your nonprofit org.

We’re going to take a look at popular commercial email platforms and the positive effects this type of marketing can have on a business, but if you want to learn more about proper email etiquette, read our blog on the Top 10 Email Marketing Do’s and Don’ts.

Top Three Email Marketing Software Options

Chances are if you’ve done any research on email marketing, you’re familiar with a few of the popular companies that help businesses roll out their emails in a sinch. Here are the top three.

1. MailChimp

MailChimp is widely known in email marketing circles. Many of the internships I had in college used MailChimp as their go-to email software.

One of the main cons associated with MailChimp is that it doesn’t offer customer telephone support, but this doesn’t hurt their satisfaction rating much as the software is intuitive and easy-to-use. Some benefits include:

  • Flexible templates and editor
  • Easy to add and manage your contacts
  • Subscriber reports
  • Offers feedback form for recipients that opt out
  • Easy to create an A/B test campaign
  • Prices range depending on number of contacts and emails sent
  • Offers Google Analytics integration
  • “Forever Free” option
  • Offers pay-as-you-go option
  • Discounts for all nonprofit organizations
  • 60-day free trial

2. Constant Contact

Another heavyweight contender in the ring of email marketing is Constant Contact.

Again, I have used this platform at college internships. Interestingly enough, a Capterra poll reported that more than half of the 60 small businesses they questioned had used both MailChimp and Constant Contact at some point.

Despite low storage for photo hosting, Constant Contact still ranks high in consumer reports because of the following benefits:

  • Readily-available customer support, including phone support
  • Easily add and manage contacts
  • Super-flexible templates
  • Directly import already-existing Outlook contacts
  • Offers feedback form for recipients that opt out
  • Offers Google Analytics integration
  • 60-day free trial
  • Pre-pay incentives

3. Benchmark Email

In all honesty, the top names in email marketing circles are MailChimp and Constant Contact, however there are several software options out there that may be more suitable to your specific business goal. There are even options dedicated to certain industries like nonprofit, tech, education etc.

Benchmark Email is an example of a name that may not be as “household” as the two others listed, but it offers many of the same features. Some cons associated with Benchmark are a limited social media integration and glitchy email builder at times.

The bubbly, hip website is almost enough to get you to choose Benchmark – at least you get the feeling that their marketing team knows what they’re doing. Some other benefits include:

  • Super-flexible templates
  • Offers Google Analytics integration
  • Price dependent on number of contacts and number of emails sent
  • Free option
  • Your emails can be checked and approved before they are sent
  • Can setup auto-responders
  • Can create A/B testing on subjects and content

We just wanted to briefly mention a few options to get you started on your journey. Finding the right one for you may take a little time and research. Luckily, several software reviews and tech blogs about each option are just a Google search away.

How Effective is Email Marketing?

This is a difficult question to answer with pinpoint certainty. First of all, email marketing can be hard to compare across industries because it is simply more effective for some than others. What we do want to note is that a well-designed email marketing campaign absolutely can be successful in gaining leads for your business.

What we’re saying, essentially, is that email can definitely get consumers to your door, but the rest of your house needs to be clean and welcoming so that they’ll come in and stay awhile (and buy!).

There is plenty of data out there to support the effectiveness of email marketing. It hasn’t stuck around as a marketing tool this long because of a lack of success. Smart Insights recently published findings that we have replicated below to show global open and clickthrough rates for emails by industry in 2016.

Industry Open Rate (OR) % Click-through Ratio (CTR) % Click-to-Open Ratio (CTOR) %
Affiliate Network 8.01 1.05 13.06
Agency 12.21 1.031 8.46
Consulting 21.83 3.42 15.64
Consumer Goods 41.40 9.47 22.87
Education 24.67 5.40 21.89
Finance, Banking, Insurance 8.29 2.99 36.09
Health/Wellness 19.14 2.94 15.38
IT/High Tech 7.07 1.09 15.39
Marketing Services Provider 7.21 1.01 14.05
Online Advertising Network 3.20 1.44 44.90
Online Business 12.38 3.41 27.59
Publishing, Media 19.37 6.10 31.48
Retail/E-commerce 16.78 3.07 18.27
Travel and Transportation 30.96 6.30 20.34
Vacations/Hotels/ Leisure 22.27 2.12 9.53
Other 27.15 8.17 30.10

As you can see from this chart, stats come in all across the board, and it is quite possible that email campaigns are more successful for some industries than others.

However, we want you to keep in mind that the end goal of building a successful, stable business is likened to the idea of having a savings account. Sure, dollars may get you closer to your goal than pennies or nickels will, but even the little guys add up. You may view email marketing as a mere penny, but in the long run, successful campaigns will add up, helping you reach your business goal.

Another great resource for marketing tips, stats and how-to’s is HubSpot. Check out its blogs to learn a little more about good email open rates and click rates.

Successful Email Marketing Examples

So you know the what, how and why of email marketing. Let’s take a look at where some of these tactics have paid off in my very own inbox. How do I know they paid off? They got me to click and converted me from a lead to a customer.

  • “From Detroit one-way as low as* $59. Hurry – they’re going fast! Where will you go?” – Southwest Click’n’Save

This one gave me serious FOMO: fear of missing out. Not only did it show up in my inbox not too long after I had done some research on Southwest flights, but it is personalized to my nearest take-off destination, which is an immediate benefit.

Add the fact that in this economy, that ticket price can’t be beat and oh yeah, one other thing – they’re going fast! Better act now.

This subject line was successful in pulling me into the email, but what happened once I was in there? Here’s what I saw:

Screen Shot 2016-07-18 at 11.56.43 AM

This message offers a great example of a catchy headline, followed by some deal descriptors and a call-to-action. “Book Now” is short, sweet and utilizes an action verb that I know will take me straight to the Southwest site where I can begin to book a flight. The high-def image immediately reminds me of being at an airport and the excitement of travel. Two seconds into this email I was brainstorming all of the places I could go.

Southwest’s marketers took a cue from my previous search of their site and the fact that I hadn’t already decided to buy as a sign that this email would match with my place along the buyer’s journey: The consideration stage.

They were right. It’s this sort of ideal matching that converts leads into customers.

  • “Hi LeeAnn, we have a 12% off coupon for you!” – Overstock.com

Just for me?

Here is a good example of a subject line obviously written to someone that has decided to buy before.

Just after my last move, I bought a bookshelf on Overstock.com. Ever since then, they send me customized emails about sales, coupons and items they think I’ll love.

Though when I’m not looking to buy anything these messages end up in the trash, they always resonate with me. Trust me, the next time I like something on Overstock, I’ll head straight to my email to see what sort of personalized deals they have sent.

If I have one, it will prompt me to buy from them right then and there instead of shopping around on, say, Amazon. This is a good example of building customer loyalty over time. They might not get a return on this email, but eventually they will.

Since I am all ready familiar with their business, I am not in the awareness stage, and they don’t need to educate me. After a brief stay in the decision stage where I chose to buy the bookshelf, I moved back to the consideration stage again.

I’m sure Overstock is betting that if I consider buying another piece of furniture, a 12% coupon may be just what I need to push me back into the decision stage. Thus, the sales cycle continues.

In Conclusion

The above examples show successful email marketing segmentation. They both grouped me as a potential buyer, but the email from Overstock also grouped me as someone who had bought before while the message from Southwest was sent because I had browsed their site and not booked a flight.

Successfully segmenting your email lists guarantees that messages are landing in the right inbox at the right time. Just as crucial as what the message says is the distribution of it.

It wouldn’t makes sense to send someone a thank you for purchasing email that had never bought a product from you. It wouldn’t be beneficial to send someone a product description email that had never heard of your business.

Knowing which stage of the buyer’s journey your recipients are in will ensure a much more successful email marketing campaign.

Although this type of communication is marketing at its core, you can utilize it to reach your audience through creative, quality content in a way that is truly designed to inform rather than sell.

You can educate. You can persuade. You can connect.

Remember, the number one rule of email marketing is to keep your users’ experience as your top priority so think outside of the (in)box.

Take a look at your emails. Are there some examples of successful messages in there? Are there messages that make you want to click? If so, what do they say? What about them is enticing to you?

Please share with us in the comments below!