eCRMGuide: Targeted E-mail: A Case in Point
MarketingFix reader Cezanne Huq wrote to complain that too much of our email coverage is about spam and not enough about best practices. So here you are, a great case study of how Charles Schwab has used email to reduce call center costs and increase customer profitability by over 30%. The piece extensively quotes Jim Nail, senior analyst for Forrester Research, and Michael Raneri, SVP at Schwab, on the success of this program.
In the interest of full disclosure, this case study features the work of the email vendor Quris, which has been a client of mine for several years. Nonetheless, it's such a good case study of email marketing excellence, I doubt you'll hold it against me, if the topic's of interest to you.
In research I've conducted recently for Quris about the email marketing practices of the Fortune 1000 companies, I came to the conclusion that the market divided up into three categories: Newbies, DMers and CRMers.
Newbies are firms that are still fairly clueless about email marketing, who at this late stage in the game are still just dipping their toes into the waters for the first time, strugging with the basics like setting up databases, generic newsletters and privacy policies. A surprising number of companies still fall into this category: many insurance firms and other financial institutions still don't have their arms around email, some wholesalers and discount retailers have yet to set up opt-in points on their sites at all, and so on.
DMers are where most of the market is stuck. These are all those companies that have realized the economics of email are attractive enough to invest in aggressive opt-in programs to send out frequent campaigns through lowest-priced campaign management bureaus, in large part to offset costs of postal direct mailings.
Then there are the CRMers. These are the leaders in their fields that, like Schwab, have realized the real value email presents as a marketing tool is not for driving immediate returns in the classic direct-marketing campaign model, where they will never win the battle for attention and differentiation against spammers. These companies recognize that email's real value is as a means to enhance services for customers, to reduce call center expenses by pushing out frequently requested information, and, most importantly, to make customers more profitable in the long term through improved satisfaction and loyalty. In short, email is the ultimate CRM tool.
I recommend you read the whole article, but here are a couple of choice quotes from Nail and Raneri that support this customer-centric view:
Nail: "The first thing to know is that e-mail is a lot harder than it looks. Because people deal with e-mail on a daily basis, they think that is all there is to it. It is one thing to do your daily correspondence, it is a very different matter to go to the scale of doing hundreds, thousands, millions of e-mails at a time. There are lots idiosyncrasies that require specialized expertise. As you get into the targeting of dynamically generated content to individual users and profiles, you are getting into computer programming….
"E-mail is not like direct mail. Often, a company gives the job to the direct marketing person and they pull a big list and mail a bunch of stuff. People are getting fed up with the amount of e-mail that isn't relevant to them."
And:
Raneri: "We have been able to understand customer behavior by tracking these e-mails. We have become more intelligent on how to bundle the e-mails and keep open rates and readership high. We also have been able to understand not only what clients want from the e-mail but also where they go from the e-mail on the Web site. This has helped us to improve design of the Web site to guide clients down relevant paths….
"By having customers subscribe to one or more e-mail alert products, we increase the net profitability of net user customers by over thirty percent. That pertains to customer revenue in trading and assets as well as reduction in attrition."
