Nick Heys, CEO and co-founder of Emailvison, reveals why direct email marketing is still by far the most profitable marketing channel on the planet
Digital social media has ushered in an era of consumer empowerment. Clients, and indeed prospective clients, expect to be communicated with in a personalised way, across multiple platforms and devices, at any time, in any time zone. When it comes to approaching direct marketing, luxury brands can no longer rely exclusively on the relationships they foster in-store, or one-size-fits-all glossy catalogue mail campaigns.
Luxury brands are beginning to master the shift from single-sided advertising to social conversation. But in the scramble to amass Facebook fans and launch runway collections on Twitter, one highly personalised and targeted channel has gone largely overlooked. In a bid to capture the attention of the digital masses, direct email engagement with existing customers has somewhat suffered.
Nick Heys, CEO and co-founder of Emailvision, is convinced this is about to change. As online tools for monitoring behaviour and segmentation become more sophisticated, luxury brands are starting to realise the grand opportunity that direct email marketing provides, and will soon leverage the potential for personalisation and unrivalled profitability.
As part of our on-going series of conversations, discussing the future of luxury brand communications, we spoke with Nick to find out why direct email marketing is by far the most profitable marketing channel on the planet.
“ Direct relationships with customers are fundamentally important for luxury brands. Email marketing can be a significant profit driver whilst still respecting the values of the house ”
Why should direct email marketing be an important consideration for luxury brands?
To me, that’s like asking; are direct relationships with customers important for a luxury brand? Fundamentally, I think it is very important. Before the Internet, there was a vague attempt by many luxury brands to have a direct relationship with their customers through direct mail. Many of those direct mail pieces were very efficient, because they led to increased store traffic and they had the added benefit of being able to do it in a very qualitative way, whilst respecting the values of the brand.
With the Internet the opportunity is accelerated. Having a direct, online relationship with customers to better tell your story, where you are going and the values of your brand, in addition to driving incremental business, whether it be through the website or through the traditional retail outlets is critical. Email marketing is, and can be, a significant profit driver for luxury brands whilst respecting the values of the house.
What are the key characteristics of an effective email marketing campaign?
The results of an effective campaigns are those where the customer is standing by waiting to receive it, because they know in that email there is going to be something of value, something of interest, something of relevance – whether it be a great story, knowledge about product or the brand, a sense of exclusivity and of course the opportunity to purchase something, online or in the store.
The characteristics of a great email campaign are is one where the customer is actually waiting to get that campaign, anticipating that campaign and that starts with the promise. As in what did the brand promise when that customer signed up? Was it to get exclusive offers, was it to be the first to know, or was it to get invited to private sales? And then it follows through with the “From” partner – who is it coming from?
Then the subject line – the number two most important thing that a consumer will look at before deciding whether to open it. And then when they have opened it, I think a good campaign gets straight to the point and tells a story and calls for some kind of action. And that action ideally is a revenue or profit generating action or something that the brand can measure in terms of revenues.
Demographic, behavioural and purchasing data are used to create targeted email campaigns
And what are some of the most common mistakes made by brands? What do you personally observe in the luxury space that makes you cringe?
Even before getting to the campaign level, I think that what is most disappointing is when I, as a consumer, go and buy something in a luxury store and they don’t ask me for my email address. Why aren’t you asking to communicate with me directly outside of the retail experience? Outside of the online shopping experience?
I think there is a lot of wasted opportunity where brands are not profiting from all the contact points that they have with their customers, and they are missing out on the opportunity to for capturing the email address, gaining the permissions to send them campaigns, and starting an on-going dialogue.
I am also disappointed when luxury brands just send me versions of their print advertising via email and are not treating me as an individual. The great advantage of email is the ability to tailor messages for the individual. What I like to see, is luxury brands leveraging the big marketing data that they are collecting from the behaviours exhibited in their previous email campaigns, on their websites, from their mobile and social campaigns and leveraging all this data to develop highly personalised, targeted, timely and relevant campaigns.
“ Email marketing is still by far the most profitable marketing channel on the planet, for every $1 invested in email marketing you get $40 back, within 24 hours ”
How are luxury brands currently using email marketing? Which brands are doing it well and why?
Luxury brands are at a tipping point. They are on the verge of starting to leverage this fantastic revenue, profit and customer relationship opportunity. Let me step back a minute to when email first started in 1971 – the year the first email was sent. This is not a new channel, but it was not highly available to the masses.
It only started to take off as a direct marketing channel around 2005 for retailers and e-tailers and e-publishers, early adopters of email marketing. Today it is still by far the most profitable marketing channel on the planet, for one euro/dollar/pound invested in email marketing you get forty back, within 24 hours (Email Marketing Census by DMA). So I think the luxury have a great opportunity to leverage the innovations of this channel, learning from the mistakes made by the retailers and e-tailers in the past, and profiting from huge improvements in technology available today to make a significant impact on their marketing efforts.
In your idea of the perfect marketing mix for luxury brands, where do you see email marketing?
I think that the luxury brands should take email marketing up a level in their marketing mix. I think that up until now email marketing has been so incredibly profitable with so little work that a lot of brands have become lazy and put it at the bottom of their priority list.
It needs to be taken up a level and it needs to be considered from a 360° perspective; taking into account how their customers are behaving online, in their retail stores, on the web and taking all that information, that customer information gold, and integrating it into their email marketing campaigns.
Ranking of channels for ROI in 2011, proportion of companies ranking as ‘excellent’ or ‘good’ (Email Marketing Census by Econsultancy)
You have spoken about the importance of segmentation and targeting, but I can hear luxury brand marketers asking how? What are some concrete ways in which marketers can segment their client data?
Emailvision is the first company to offer customer intelligence in an easy to use format and easy to use software as part of a service package. It enables luxury marketers to analyse their customer data into one single location and be able to ‘slice and dice’ that data to send out more targeted and segmented campaigns.
But segmentation is not new, what is new is customer intelligence. And customer intelligence is about going on a journey, exploring and discovering new things. And what we offer is very fast, integrated analytics tools so that a marketer can dive into their customer list and identify new cross sell opportunities, and new reactivation opportunities, which can be turned into campaigns both manually and automatically, which equates to revenues, sometimes overnight. It’s what we call actionable analytics.
And this information, does it come from in-store sales data or related to e-Commerce?
Our customer intelligence technology enables marketers to upload and access any of their customer data, be it point of sale, behaviours such as purchase, online and mobile and other demographic information. We recommend starting off simply with just email, mobile and social behaviour – those three alone are a huge pot of gold, and very easy to mine with our technology.
Marketers can go out there and make selections on their most frequent, recent, openers and clickers. It is possible to drill down into selections of customers that only buy a certain type of product and cross-sell other products. The opportunities for data mining are endless and what we do, because we make it so fast and easy to use, we is enable marketers to discover new insights that they didn’t even know existed before they set out.
“ Mailing frequency will start to flatten out and there will be an increasing amount of targeting and quality in email marketing campaigns, making them even more profitable ”
Increasingly people are reading emails on their smartphones, presenting a distinct challenge to marketers developing email campaigns. How can brands work to accommodate both the mobile device and the laptop/desktop experience?
That’s a great question because with the rise of the iPhone and smartphone – mobile is an important medium to consider. We are very lucky in the fact that, from a technological perspective, the mobile has come to email. One of the primary uses and reasons to buy a Smartphone is to do email.
Emailvision’s technology makes it easy for brands to send out their email campaigns and make sure their messages are easy to read, across all different types of mobile devices. Our system will track who is opening what, where and when, and on what device, which also provides another level of data when creating targeted campaigns.
And how do you see all these factors affecting the evolution of email marketing in the near future?
As marketing lists continue to grow, marketers will get better at using this information more strategically. I think that mailing frequency will start to flatten out, as marketers continue to realise that they can’t keep blasting lists with the same messages, treating customers with a same ‘one size fits all’ mentality. What I do think will happen is there will be an increasing fragmentation and number of micro campaigns, that will be sent out both manually and automatically, based on the vast amounts of data that marketers are now able to collect and use, about and from their customers.
There is going to be an increasing amount of targeting and quality delivered in email marketing campaigns, which is going to raise the bar and make this channel even more profitable. It’s going to require a little bit more work on behalf of the marketers – and it is why we have developed and integrated our customer intelligence technology with our campaign management platform. Together, these technologies make it easier for marketers to leverage new marketing data about their customers and apply these insights directly into their online campaigns.
For other discussions regarding the future of luxury and communications, please see the following: