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Email marketing tools sustain old channel with personalization
Email is so 1990s. Yet as a marketing communications channel, it thrives into the 2020s with an assist from personalization technology and customer data platforms.
Those outside the marketing realm can be forgiven if they assume email marketing is either a dead or dying marketing communications channel. After all, anti-spam legislation, ever-tightening consumer privacy laws and the rise in popularity of social media should have spelled doom for email long ago. Plus, the tech is just so 1990s.
But marketers, their technology vendors, analysts and digital agencies say that's not the case. In fact, content personalization engines have strengthened email's position as a way to generate e-commerce sales, sending email volumes to staggering new heights during the pandemic, while in-person promotions were curtailed.
Twilio, which acquired cloud-based email delivery platform SendGrid in 2018 for both its marketing and customer service email APIs, reported that emails sent through its APIs are hitting all-time highs. On Black Friday last November, the company had its first 5-billion-email day, capping its first 100-billion-email month. Overall, SendGrid processed 1 trillion emails in 2020. That represented a 40% increase over 2019, which had set the previous high mark of 731 billion emails.
"It's the weirdest thing -- it should be a failed channel," said Constellation Research analyst Liz Miller. "It's gotten to be what our big overstuffed [physical] mailboxes used to be, but it feels better because we didn't kill a tree. We bought into the myth that snail mail was so terrible. Email has quadrupled from the stuff that was sent to us physically, because it's so much cheaper to send digitally. And people keep opening it."
All of the experts SearchCustomerExperience interviewed agreed on one aspect of email that has sustained its value as a marketing channel through the decades: Recipients can keep and organize emails for later use. That simple act is difficult on other more transient channels such as text, social media and messaging apps.
Miller likened it to paper coupon bundles many consumers remember receiving in the mail. People use the same coupon-clipping logic to save digital discount codes for the next time they need to buy an item online.
Furthermore, few people will tolerate the volume of messages they receive in email on other channels such as social media, because it creates too much noise mixed with the content they want to see. Texting is an even faster road to alienating customers, because users may be charged a per-text fee for the privilege of reading marketing messages.
Privacy laws help email's effectiveness
The emergence of consumer privacy laws and anti-spam legislation actually help email's viability as a marketing channel, said Arron Kooner, head of customer communications at Lounge Underwear, an online-only apparel startup based in the U.K. The extra steps required by the European Union's General Data Protection Regulation (GDPR) and numerous other laws either proposed or passed in U.S. states only enrich the value of email as a channel.
"We've had GDPR for years; you have to opt in to get email," Kooner said. "If someone signs up for Lounge in the U.K. and Europe, they want to hear that stuff. I think email is a very effective tool for us."
Through a mix of social media marketing with an army of popular influencers, digital advertising, email and other channels, Lounge has ridden a years-long growth trend. The company's approach to email is sophisticated, customized by level of engagement on other channels, market segment and geography.
Having built its marketing infrastructure with SAP Emarsys personalization and customer data platform technology prior to the pandemic, Lounge was prepared to sell online and pick up business while physical retailers caught up during COVID-19 lockdowns. This February, usually a busy month because of Valentine's Day sales, Lounge set a new monthly record for orders by Feb. 11.
Email used to be the "be-all, end-all" marketing channel two decades ago for large retailers at the time such as Borders, Barnes & Noble and J. Crew, said Soren Schneider, head of CRM strategy at Hawkeye, a digital agency. He launched email campaigns for those companies back then in a former role at Experian CheetahMail.
Today's email campaigns for Hawkeye customers are much smaller and more targeted than, for example, the 15-million-strong campaign list that he ran on behalf of Borders promoting the latest Oprah's Book Club in the mid-2000s. But email remains a viable part of the communications mix.
Who's opening email? Everybody. While one might be tempted to think that email might find more traction with older generations who grew up with email, Schneider said it doesn't favor a particular age group -- a well-targeted campaign can reach anyone.
"You send an email when you have something to say," Schneider said. "That goes for us as individuals, and it goes for brands as well, whether it's in the B2B, B2C or B2B2C spaces."
Sophisticated personalization tech drives trend
Email has both personalization engines and customer data platforms to thank -- at least in part -- for its growth as an effective marketing tool despite competition from other channels like social media, SMS texting as well as emerging privacy laws that give consumers more control over who is allowed to send them messages.
Twilio, for example, started out as a unified communications platform, moved into cloud contact center as a service with Twilio Flex, then bought SendGrid and topped it off last year by buying the well-regarded Segment CDP. Other vendors have evolved their suites similarly, such as SAP purchasing Emarsys' personalization engine and building its own customer data platform from technology acquired from Gigya. CDPs help pinpoint emails to small groups, or even individuals.
All this technology support can make email a precise marketing tool, sending the right messages to the right customers at the right time, localized to their countries or regions. It's a far cry from the "spray and pray" approach email marketers used to take, bombarding massive lists with the same offer.
"The next frontier will be to make each email count," said Srihari Kumar, senior vice president and general manager of marketing and engagement automation at Twilio. "Not because it's expensive to send an email, but because the consumer is getting so many emails. If they get the right email and you can drive engagement using machine learning, those marketers will be the future winners and win the hearts and minds of consumers."
Noelle Goodman, brand marketing director at Hawkeye customer AT&T, said email is an important part the company's messaging "cocktail" to small businesses. AT&T uses responsive personalization to serve up content when an email recipient clicks on an email link and shows interest in a particular topic. Goodman says AT&T customers use email almost as they might have used paper business cards in the past -- saving contact information and the contents until they need to research AT&T's services and respond when the time comes.
"As we've gotten better with targeting, you can really see it work," Goodman said. "When you're using the right message and you have the right record you're targeting, the payoff is exponential when you hit that sweet spot."
Tech can help squelch email noise
Regulators have spent nearly two decades fighting spam. The U.S. government's CAN-SPAM Act, one of the first anti-spam laws, dates back to 2003. Yet spammers persist, as well as companies that might not think of themselves as spammers, but whose tactics effectively result in what looks like spam to end users.
Like it or not, this contributes to the overall volume of email, and even the very limited success spammers enjoy eventually adds up to real sales at scale.
Liz MillerAnalyst, Constellation Research
Spammers aside, even successful email campaigns still over-message customer lists, in Miller's opinion. Marketing automation tools are evolving to the point where they're actually improving processes and "not just making bad processes faster," she said.
AI and machine learning tools are helping marketers make better decisions to trim target lists and time messages better. The growing prevalence of those tools will stem the volume of marketing emails we receive over time, she said.
Even if they have the latest tech toys, marketers need to change the way they think about email in general. While marketers typically count an opened email as a customer engagement, their customers don't because they typically create a free cloud email address specifically to dump spam and marketing emails. So just opening an email shouldn't necessarily signal that an engagement has taken place.
"Email is probably one of the last marketing tactics where failure is a win," Miller said. "If any other business act got only an 18% or 24% positive reaction, we'd stop it. But somehow, an 18% or 24% email open rate has teams high-kicking down the hallway. If you were in sales and you were 24% successful this quarter, you'd be collecting unemployment."