Chapter 7
Email Marketing to Build Consumer and Business Relationships
Learning Objectives:
By the time students complete this chapter they should be able to:
• Discuss reasons for the growing importance of email marketing.
• Describe the various levels of permission.
Email Marketing Slides 2-9
This chapter covers email marketing as one of the first tools to really take off on the Internet and
something that people use on fairly frequent basis. Slide 2 reiterates what the book states: most
Email is cheaper, faster and more effective than direct mail (Slide 3, Figure 3.1) and also has
some benefits versus other retention channels as well.
The advantages of email (“direct mail on steroids”) are important. They can be described as:
• Creates a true one-to-one channel
• Can be developed quickly
• Content is flexible, including HTML, rich media, and video
Email has evolved from broadcast SPAM to customer engagement and dialogue. The emphasis
on “No Spam” is important to any discussion of email marketing. It is critical when the
discussion focuses on using email as an acquisition technique (which is not really
recommended).
The Scott’s Turf Builder example indicates how a company can use detailed customer
information to create a relevant, personalized dialogue with customers. The case also shows the
integration of email and social media. I recommend going to the Scott’s site on Facebook, as we
were denied permission to use it in the book.
Levels of Permission Marketing Slides 10-13
Permission can be illustrated by discussion of the term SPAM from a Monty Python skit in Slide
10 and students may not realize the origin of the term in terms of an annoying communication
The issue of good lists is important. Any major list broker has email lists for rent these days.
The cost is high and the quality is suspect. Why would any marketer rent their prized list? Few
do, and that leads to a strong recommendation that the marketer should build an opt-in list over
In order not to be considered a spammer, the marketer must obtain permission from the customer
or prospect before sending email. There are four levels of permission:
1. Opt-out means that the visitor did not refuse to receive further communications from the
marketer. This is an improvement over spam, but it does not represent a high level of
commitment on the part of the visitor. Usually there is just a check box that needs to be
unchecked to opt-out.
2. Opt-in means that visitors have actively chosen to receive further communications,
usually by checking a box on a registration form. It represents active acquiescence, if not
enthusiasm, about receiving future communications from the marketer. Consequently,
members of opt-in lists should be more receptive to messages.
3. Double opt-in is a technique by which visitors agree to receive further communications,
probably by checking an opt-in box on a site, and are then sent an email asking them to
I often draw a check box on the board and show that opt-in means you have to check the box and
opt-out means you uncheck the box. Ask the students what they do when they come across a
new website. Do they remember to uncheck the boxes? Even if a customer has checked a box if
he or she does not remember and/or the information is not relevant the communication may be
viewed as SPAM.
Developing an Email Marketing Campaign Slides 14-23
This is a good time to talk about the types of uses for emails. Slide 14 lists some examples from
the text and elsewhere. You can ask the students what types of emails they have received for
what purpose and this is a good time to show some emails, either live or as screen captures. The
The Peppers and Rogers model (Figure 7.8) is based on their competency in relationship
marketing, but it summarizes the whole information-driven process well. They emphasize:
• Gather customer data
• Derive insight from the data
This perspective is given in more detail in the steps for developing an email marketing program,
Table 7.1, Slide 25. The steps are:
1. Build or obtain an email list
a. Build a permission-based list
b. Rent email lists
2. Profile and segment the list
3. Establish a communications schedule
The similarity to direct mail marketing is once again apparent and many of the concepts in
Chapter 4 are reinforced here. The list is important. So is copy, but the opportunity to link to in–
depth information is a key feature of email. Measurement and testing is essential. So is
learning/becoming better from every program.
Other aspects of email design are outlined in Table 7.2 and include:
Email Element
Recommended Approach
Preheader
Link to online version of email, reminder of relationship,
restates offer
Subject line
Short, include brand, call to action, urgency
Offer or call to action
Specific, clear, and meaningful
Time deadline, sense of urgency
Not only what should the customer do, but by when?
Web design principles
Above the fold, golden triangle
CAN-SPAM
Include reply-to, unsubscribe, and otherwise be compliant
Viral marketing
Include forward to a friend as well as social media links
Social media
Integrate with popular sites on social media
Students may not realize preheaders, a short text blurb located below the subject line, are
important in email marketing. However, the offer is most important and we take the approach of
This also a good time to go live to the site of one of the many good email providers to show what
services they offer their customers. Table 7.3 explains the advantages of email service providers
in aiding in tracking and measurement. One additional key reason to use an Email Service
Provider is also to keep compliant with the CAN-SPAM act, discussed later. A few are
SilverPop, Exact Target, and Yesmail are listed in Table 7.4 and there are many others.
Deliverability calculations are dependent on understanding the difference between hard and soft
bounces and the text and Figure 7.12 (Slide 23) gives good illustrations of how to calculate open,
bounce, and click-through rates from a real life example. Here is a simple example I often use to
get things started:
• 100 Emails Sent; 10 Emails Bounced
bounce rate – number of bounces divided by number of emails sent.
click-through rate – number of clicks divided by number of opens.
Just use the number of total bounces, hard and soft, for the bounce rate. Usually you check your
hard bounces and request an update from the customer or remove from your list, which reduces
the bounce rate.
The requested action in an email can be anything from buying a product to downloading a
whitepaper or accessing a coupon. The important thing is that the customer clicks on the
required action. The number of opens is less important than the click-through rate (CTR). The
All these figures are dependent on how many emails are sent, how well they are designed, the
subject, audience, etc. Remember, SPAM is in the eye of the beholder. I might go weeks
without responding to an offer and then respond to three in one day!
The Golden Rs of Email Marketing and Targeting, Personalization, and Customization
Slides 24-25
There are three terms the text mentions here that are mentioned elsewhere, most notably in
Chapters 11 and 12:
• Targeting refers to directing marketing communications to individuals or businesses that
have been identified as valid prospects for acquisition or retention for the good or service.
Targeting can be visible, as when a marketer sends an email newsletter with personalized
These terms are critical to the advancement of email marketing programs as email integration
with customer databases facilitates in particular targeting and personalization. There is a lot of
room for research in the area of personalization in general.
Note that Slide 25 presents a concept that is not present in so many words in the text, although it
is implied. The idea owes much to Bill Nussey’s book The Quiet Revolution in Email Marketing
These principles are worth applying to all Internet marketing efforts, and I’d encourage you to
include this concept whether you use the PPT or not.
Requirements of the U.S. CAN-SPAM Act Slides 26-28
Earlier in the chapter we pointed out how much spam there is and how much consumers hate it.
Some marketers think that spam has the potential to destroy the effectiveness of email marketing
The DMA site has an excellent description of what to look out for and how to avoid violating the
CAN-SPAM Act. This did not reproduce well in Figure 7.16 but comes out fine on Slide 27.
The main things to remember about CAN-SPAM from Slide 26 are:
The Act Applies to Acquisitional or Promotional Emails and should include:
• Valid “from” email address, valid reply
Summary Slide 29
While Email Marketers continue to battle perceptions of SPAM, clogged Inboxes and
uncertainly regarding the actions of the European Union, email will continue to be an important
and pervasive retention tool as we will see in Chapter 11. Permission-based lists, good planning
and targeting and personalization can help response rate.
Discussion Questions
1. Why is email still a strong tool for Internet marketers? Do you think it will be replaced
by mobile applications, such as text messaging, and in what time frame?
Email marketing is a strong tool because it is measureable and easy to implement and has a
2. What is meant by permission marketing? Do you think it is an important concept to
email marketers?
Getting people’s permission to market to them is just what it sounds like. Doing it well is a lot
harder. The marketer needs to ask in such a way that prospects will say, “Yes.” That usually
3. Think about email communications from marketers, perhaps some that you receive
yourself. What makes them interesting and worth your time to open and read? Do you
ever take any action as a result of the emails? Why or why not?
This stimulates an interesting discussion of when and why students open emails, of which they
probably receive many, and whether they respond or not. Structural factors like identity of a
4. What are the main benefits of using an email service provider? Say you are the head of
a student organization and you need to regularly contact members, would you consider
using an email service provider if the cost were within your budget? Why or why not?
Students should say that they would use the provider to facilitate tracking, aid delivery, manage
5. What aspects of promotional email design would you take into account if you were
designing an email to invite students to a meeting of the organization mentioned in
question 4? Where would you put the most important information? What would be
your call to action?
Like the Internet Exercise 4 below, students can use the promotional email checklist in Table 7.2
as well as the Figures in 7.10 and 7.11 to structure the discussion. The call to action is a great
6. From your perspective, is the CAN-SPAM law working? Why or why not?
It probably is, but from our individual perspectives on our overflowing inboxes, it’s hard to see.
play a major role in filtering out the spam that gets onto the Internet.
7. Assume that WilyMarketer.com is running an email campaign to acquire new
customers. It is considering two options: review the option choices. In either event,
actual campaign management will be outsourced to an interactive agency. Which
program would you recommend and why?
• Option A would use a high quality rental list of 100,000 email addresses. Direct costs
under this option would be the rental list at $250/m and creative, program
management and reporting costs will be $10,000. If the email campaign brings in
623 new customers, what is its customer acquisition cost?
• Option B would rely on banner advertising at $20 CPM, which has a predicted
click-through rate of 1.5 percent. The campaign is designed to reach 100,000
viewers, and its creative, program management and reporting costs will be $10,000.
How many customers will it bring in and what is the customer acquisition cost?
A. 100,000 addresses @ $250 per thousand = $25,000
Internet Exercises
1. Internet Career Builder Exercise.
As noted in the text, email marketing is a top growth opportunity. There should be no shortage of
2. If you have not already done so, sign up for an email newsletter from one or more of the
sites you are following. Keep a log for the next few weeks of the email contacts that
result. How many emails do you receive and how often? Pay special attention to how
long it took for the site to confirm/welcome you and the nature of the confirmation
communication. If you are already receiving email newsletters and other
communications, keep a log of these communications.
Encouraging students to contact one or more websites, to report their initial experiences, and to
3. Assume you are to design and send an email to invite students to attend a presentation
on email marketing at your university. Using the suggested processes and tips in this
chapter, create a plan for obtaining the list, sending the email and measuring the
results.
Students should be able to use the steps in Table 7.1, the Rogers and Peppers process from
Figure 7.8, or other suggestions from the book to outline their approach. IT should include how
4. Next, design the email that you have planned to send using good email design
principles. Share your design with the class and get feedback.
The promotional email checklist in Table 7.2 as well as the Figures in 7.10 and 7.11 should help
Key Terms
bounce rate number of bounces divided by number of emails sent.
double opt-in a technique by which visitors agree to receive further communications but must
perform two actions, usually checking an opt-in box on a site, and then responding positively to a
sent email asking for confirmation.
email marketing the process of developing customer relationships through offers and
communications contained in email messages.
open rate number of opens divided by number of emails delivered (sent minus bounces).
opt-in actively choosing to receive further communications, usually by checking a box on a
registration form.