Commentary
How email can help retailers stay customer focused
Will Devlin, senior director of marketing for MessageGears, offers up three ways retail marketing leaders can tap email to drive growth.
July 26, 2018
By Will Devlin, senior director of marketing, MessageGears
Many retail marketing departments have been expanding for the last few years, due to the strong economy and a surge in new marketing technologies. However, after three years of consecutive increases, marketing budgets have stalled, with mounting pressure for CMOs to show the return on investment for their spend.
The trend was outlined in Gartner's 2017-2018 CMO Spend Survey, which found that marketing budgets slipped from 12.1 percent of company revenue in 2016 to 11.3 percent in 2017. They also correspond with the changing role of the CMO.
“As CMOs survey the landscape, one thing is clear — previous budget increases have come with weighty expectations, some of which have yet to be met,” stated Ewan McIntyre, research director, Gartner for Marketers, in the survey.
However, CMOs may not realize the gains they could make in improving customer experience by tweaking one of their most reliable performers — email marketing. Email is already a top performer, with one of the highest ROIs of any marketing channel. Email connects companies directly to their customers and yields diverse and accurate data.
Still, marketers face numerous challenges when creating successful email campaigns that serve customers' needs. If these challenges were addressed, businesses would quickly see even greater customer engagement, sales and business development.
Below are three ways CMOs can improve their email marketing divisions to drive growth.
1. Rethink inactives
In assessing email's overall impact and not just looking at the channel-specific metrics, marketers may need to rethink how they classify someone as an “inactive” email recipient. Typically, emails that don't generate any action in the inbox are deemed a sign of a lack of engagement with your brand, and the tendency is for marketers to reduce the amount of email sent to inactive recipients. While this may be the proper move in some cases, it might be shortsighted in others.
Combining unopened email data with subscriber in-store activity can widen your view of customer behavior and give you a more accurate picture of customer behavior. By tying purchases at the subscriber level, you may see that someone you thought was ignoring your brand is still alive and well (and possibly influenced by your emails). If someone is still active as a customer, but doesn't open your emails, consider this a metric in itself. The strategy to reach this customer is different than the one for a customer who doesn't open emails and isn't active. This metric tells you that your messaging to this customer may be off base, you may have incorrect contact information, or perhaps they prefer a different form of communication all together. See this as an opportunity to adjust your messaging strategy to better fit the needs of your customer.
The lesson here is to measure email beyond opens and clicks. You learn more about your customers' behavior, and don't cut loyal customers off just because you weren't fully tracking their interactions with your brand.
2. Give them data
The data that marketing departments can access and share determines the success of their email marketing efforts. Unfortunately, many companies have yet to achieve an adequate solution. As a result, marketing departments continue to list data access and control as a major hurdle.
Consider marketers' top aspirations for 2018 as listed in The Relevancy Ring ESP Buyers Guide 2018, Enterprise Edition, which was published in March. The guide was based on executive data from 401 email marketers at all levels of management and covered the performance of six ESPs: Adobe, Cheetah Digital, Epsilon Agility Harmony, MessageGears, Salesforce Marketing Cloud, and Zeta Global.
When surveyed, marketers said they wanted 1) a greater use of analytics, 2) improved relevancy via greater segmentation and targeting, 3) access to real-time data, 4) the ability to attribute leads across channels, and 5) greater data agility via automation, data mapping and the use of AI/machine learning applications.
Meanwhile, the top five barriers to marketing success were 1) receiving adequate support from their IT department, 2) maximizing email deliverability, 3) moving data between the company and the ESP, 4) having adequate IT support for data extraction, and 5) managing marketing offers across multiple campaigns. (A total of ten challenges were listed in the report.) Awareness of these challenges is the first step in developing an action plan to address them.
In a recent media interview, former Microsoft CMO Thom Gruhler summarized the importance of data access and agility: “Agility is absolutely the coin of the realm for marketing performance…Brands are important, but as important is your agility in redirecting what you're doing with customers based on real-time insights and experimentation that help marketers be more precise with the allocation of precious resources to drive measurable impact.”
3. Connect with front-line players
A disconnect between executive and front-line teams is a common problem in enterprise companies. We conducted a recent survey of B2C marketers at companies that send at least 10 million emails per month found that the majority of executives underestimate the daily challenges marketing teams face when it comes to managing email marketing (2018 ESP Satisfaction Report).
While half (50 percent) of high-level executives indicated they were “very satisfied” with the performance of their current email service provider (ESP), only 17 percent of managers, senior managers, directors and vice presidents agreed. Another 80 percent of C-suite executives said they were “very satisfied” with their ESP's ease of use and real-time data access, compared with just 19 percent for the rest of the marketing team. In addition, C-suite executives were nearly twice as likely as other marketing team members to say their ESP's best attribute was ease of use (50 percent to 27 percent) and real-time data access (30 percent to 16 percent).
This disconnect means marketers may not be able to convince the C-suite to approve necessary changes, or maybe worse yet, marketers may have a change forced on them that makes their job more difficult. When executives don't know that an ESP is underperforming, there's also less incentive for the email industry to push forward and advance. CMOs need to maintain a close relationship with their email marketing teams and ground-level workers so they fully understand their needs. For example, in addition to requesting email ROI metrics, the CMO should ask their team for feedback on technology performance, which would provide a more comprehensive and accurate view of what's happening behind the scenes.
The short story for CMOs
Budgets may be stalling, but that doesn't mean your results will follow suit. Gartner advises the CMO to take a close look at your current programs and commitments, examine costs vs. contributions, and build a proactive cost optimization strategy to track spending.
Moreover, focus on what's working and how you can make those initiatives or areas work even better. With email marketers, that means making sure they have the resources they need to reach their goals.
