Consumer Strategies Report January 2005/Media

What to Expect

Marketers reading this white paper should expect to gain a general understanding of to adapt to the "CAN SPAM" Act of January 2004 with a specific emphasis on how to:

1) Implement email communications that stress adaptations to CAN SPAM
2) Integrating and navigating list related regulations to increase quality and size
3) Determine if email campaigns are performing to standards

Background

The "CAN SPAM" Act of January 2004 will be updated with further regulation from the FCC in the coming months. This does not sound like good news for marketers who have seen increasing difficulty executing effective e-mail campaigns and subsequent increases in cost per acquisition of their online efforts. After studying best practices on e-mail deliverability, e-mail marketing statistics, and the quantitative effect of "CAN SPAM" on our clients, al berrios & co. has determined that the effect of stricter SPAM regulations today are similar to the effect of stricter anti-trust laws made during the roaring 1920s. What anti-trust law did to foster competition and innovation, the backbone of our economy, SPAM regulations will do to create a more credible online marketplace, the first crucial step to growing the sales and marketing capabilities of that medium.

Visions of an online marketplace where consumers feel safe to interact with marketers and purchase customized goods and services are wonderful, but are not practical in the short or even medium term. The challenge facing marketers now is how to adapt to "CAN SPAM" in order to begin utilizing e-mail to a higher degree and lowering their online cost per acquisition. That is the focus of this report.

Preliminary Step

First of all, one of the inherent challenges in doing business online is the need to move very quickly and to be instantly responsive. With a marketing operational structure in place that allows for a quick transition from evaluation to planning, marketers can achieve timely implementation.

To the Letter

Having a more streamlined marketing structure in place is the first step to overcoming the challenges of "CAN SPAM". The next step is to learn and follow the regulations to the letter. A simple logic argument has emerged in the industry supports this: given the US legislative system, these regulations reflect the needs/wants of lawmakers' constituents. CAN SPAM regulations are therefore merely a set of online consumers' "derived needs". Implementing communications that stress adaptations to regulations, instead of crafting communications with sensitivity to regulations, is the key to fulfilling these "derived needs".

Here is a short list of examples of how stressing adaptations can improve the effectiveness of email campaigns:
- " Show recipient a concern for their needs by making it easier for them to unsubscribe with larger type font on multiple unsubscribe links, and processing their request immediately instead of just sometime within the ten day mandatory period.

- " Proactively gather data on consumer's interests and send triggered emails with very forthright subject lines; make sure that consumer "wants" email

- " Offer recipients an offline way to complain/comment by providing bolded physical address

Quality…then Quantity

The third step to facing CAN SPAM challenges is to integrate email list related regulations to improve the quality and to navigate those regulations creatively to grow the list.

A client is having list problems with CPA rising by almost 10 dollars after the enactment of CAN SPAM. The primary reason is severe cuts in list size. The deleterious effects of CAN SPAM are again a result of our client's difficulty with addressing rises in CPA with list quality control measures and with creating smart new ways of generating opt-ins.

The difficulty is a result of unawareness to the rapidly progressing world of email metrics and neglect towards running double opt-in procedures. Metrics such as form completion rate and visitor-to-registration ratio provide a look into the effectiveness of traditional opt-in collection procedures. Utilizing double opt-in procedures that involve sending a 'thank you' or confirmation email after registration are not only a good way to ensure consumers do, in fact, want to be on the email list, but is also a good way to start forming a relationship.

Additionally, difficulties arise when it does come time to find new opt-ins. Online communities and other "contact points" on a company's website must be the marketer's first strategic option. (For the purposes of this report, "contact points" are those areas on a website that allow consumers to communicate with the company or other visitors of the site). Application of the metrics mentioned above is the best tactic in transforming the website into a producer of new opt-ins. A supplementary tactic is to support these traditional website with offline advertising and utilizing offline touchpoints such as consumer service representatives. This tactic not only drives new traffic and grows opt-ins but also creates an organizational awareness of the opt-in goal.

The basic stratagem to keep in mind when trying to grow opt-ins is to look beyond traditional means while considering the value chain. For example, if Company A, a tech firm, creates value through its constant innovation then it should:

1) Target potential opt-ins by partnering or advertising on websites that offer similar or complimentary value to the consumer, focusing less on demographics and other static variables that are not as reliable for segmentation and targeting consumers by interests
2) Offer consumers updates on new ideas in the pipeline or previews of new technologies, essentially leveraging the inherent value proposition
3) Interact with potential or new opt-ins by asking for their feedback and intelligent criticisms. Less one-sided of a relationship; this provides for a friendlier environment and useful feedback.

Performance

The final point questions whether email is performing to standards and how to determine that. While this is not directly related to adapting to CAN SPAM, marketers do not exist in a bubble and neither should a discussion on a key marketing tool.

Many business decisions are made on performance criteria. On these principles, if an email campaign is struggling with low click-thru and conversion rates then the most logical action may be to stop spending the money on email altogether. It is crucial when using this approach to analyze the reasons why email is not working. This is not in an attempt to resurrect an ineffective tool, but to understand more about consumers and the strengths and weaknesses of the marketing department. It is also critical to make this decision on accurate numbers, which according to anecdotal research may not currently be the case.

Click-thru and conversion rates may often be diluted by overly high delivery rates (the denominator). The key to accurate delivery rates is trimming the figure by bounce rates and complaint rates determined by analyzing complaints received through ISP feedback loops. Complaint rates count non-deliveries that bounce rates do not and therefore are important to establishing an accurate denominator on which to judge email performance.

Considering these steps as a guide to planning the use of email marketing budgets can yield incremental increases in the effectiveness of email campaigns and subsequent decreases in CPA. To reiterate, the principle that has guided the entire discussion is that these regulations are equivalent to anti-trust laws in that they create a safer environment for consumers. Additionally, it is important to keep in mind that these regulations are derived from the needs and wants of online consumers. We offer this report as a springboard to discovering custom methods of instantly responding to regulations to the letter to achieve success marketing with emails.

Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

(c) 2005. All Rights Reserved. al berrios & company, inc. Published by al berrios & co. This Report may not be reproduced or redistributed in any form without written permission from al berrios & co., subject to penalty.

Privacy

Back to Menu