DIRECT MARKETING: Marketers Put E-Mail to the Test - the First-Ever Survey of E-Mail Marketing Shows How Companies Are Using the Medium to Their Advantage. David Murphy Reports on the Findings

Article excerpt

E-mail is now firmly entrenched as an indispensable part of many people's lives, both for business and for social use. And over the past couple of years, a growing number of companies have begun to use it in a variety of ways to communicate with their customers.

But how exactly is e-mail being used, and what are marketers' perceptions of e-mail marketing? To find out, the Direct Marketing Association (DMA), in conjunction with Experian, has conducted the first-ever UK survey of e-mail marketing. The survey was issued by ContactMail, a permission-based e-mail marketing service, to 2000 DMA members and Experian clients. It generated 402 responses, including 119 from DMA members and 283 from Experian clients.

The results show that the majority of companies are using e-mail for marketing purposes, but it only accounts for a small proportion of the overall marketing budget in most of them. While 60% of respondents said that they currently use e-mail marketing, compared with 37% who do not, only 8.5% of respondents said that e-mail accounted for more than 20% of their marketing budget. Fifteen per cent said that it accounted for between 11% and 20%, while 76.5% claimed that e-mail marketing represented less than 10% of their total marketing budget.

On a more encouraging note, 87% of respondents said they anticipate using e-mail more in the future, compared with 4% who do not, and 9% don't-knows.

Even among those not currently using e-mail as part of their marketing plans, only 15% are not planning to do so at some point during the next two years.

Opt-out guidelines

Among those using e-mail as part of their marketing activities, the most appealing aspects of the medium are its low cost (83%), speed of delivery (71%) and ease of delivery (59%). On the other hand, those discouraged from using e-mail for marketing purposes cite three principal reasons.

Fearing the perceived intrusiveness of e-mail by customers (30%) is top, while 17% are put off by the opt-in guidelines, and 11% admit that they would not know how to put together a campaign.

'The US industry hasn't helped,' says Phil Singh, head of e-commerce at Experian. 'In the early days there were lots of organisations out there issuing spam, but I believe the DMA opt-out guidelines have helped.'

Forty-two per cent of respondents say they are not discouraged from using e-mail for marketing purposes, but 33% said that they are concerned about security issues.

'There is obviously still a level of concern over security and potentially upsetting current and prospect customers,' says Mike Barnes, marketing director at the DMA. In response to this concern, says Barnes, the DMA has produced a Code of Practice for E-mail Marketing (see box, page 20), to be incorporated in the revised DMA Codes of Practice, to help ensure the industry is responsible with its use of e-mail.

Singh sees this finding in a more positive light, however. 'If one third of respondents are concerned about security issues, then two thirds see e-mail as a secure system,' he says. 'And that's got to be good for e-commerce and e-business generally.'

Traditional methods

When it comes to how e-mail is being used, there is an almost equal split between reactive and proactive applications, with 60% of respondents saying they use e-mail to service requests for information and 58% using it to target new business. Other popular uses include customer newsletters (53%) and account management (44%).

'It's not just e-commerce businesses that are using e-mail now,' says Singh. 'The more traditional businesses are realising the benefit of it, such as people doing newsletters, account management and people providing information to customers.'

Singh admits, however, that he is surprised that none of the respondents point to the ability of e-mail to drive prospects or customers to a web site. …