John Fell created E-mail Logic to help small businesses – primarily retailers – use email to drive sales. Today, his Evanston, Illinois agency helps more than 100 small businesses use email direct marketing to keep customers coming in the door. In this final installment of my interview with John, we discussed how small retailers can use email to drive sales. In case you missed my two posts featuring my previous conversations with John, you can check them out here: Part 1, Part 2.
Joel: John, your expertise is in retail direct marketing, and I know you are a strong proponent of using email. What is it about email that makes it so effective for retailers?
John: All successful retailers understand the 80 – 20 rule: We do 80% of our business with 20% of our customers. Studies have shown that increasing your existing customer's spending by even 5% can translate into a 25% to 95% increase in your company's profitability. Building stronger relationships with your most valuable asset - your existing customers - is simply good business. And email is the perfect medium for building and sustaining customer relationships. Many retailers who have long been reliant on direct mail can reap huge cost savings by transitioning their retention campaigns from “snail mail” to email. By cutting back on expensive direct mail campaigns and focusing on retention email, retailers can receive a plus in their cash flow. Not only will they will reduce their marketing costs, but they will drive more sales by communicating more frequently and creatively with regular customers who want to hear from them. With effective email marketing, they will see an increase in revenues related to more store visits and increased units per transaction.
Joel: Retailers have their hands full in today’s economic climate. Do you see more budget going to email?
John: Stores that use email to deliver offers have incredible results. Typically, the margin dollars created from one successful email send can cover the costs of a year of email marketing. We also work with many high-end retailers who are careful not to use price to drive their business. For them, keeping their name in front of their customers is enough. But in these times we also have to be realistic about market share. With demand down, some of these clients have experimented with “e-only” offers to drive customers into the stores. The results have been fantastic. We build the offers as “click throughs” in the emails. Utilizing ExactTarget’s tracking tool, the sales staff knows who does and doesn’t open the email and who clicks on the offer. They use this information to make follow up contacts via phone. Sometimes just getting one customer to come in who wouldn’t have come in otherwise can make the promotion a success. Long after, we emerge from this economic crisis, I think we will continue to see retailers using email as their primary direct marketing medium.
Closing Comment
Special thanks to my friend, John Fell of E-mail Logic for sharing his thoughts and experience on how small businesses can use email to grow their business by staying connected with their customers. Believe me, John has a lot more to say on this subject, so if you would like to “take a bigger drink from John’s cup of knowledge” I invite you to drop him a note.
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