How Email has Revolutionized Direct Marketing - ExactTarget and WorkSmart eMarketing Webinar February 2009

© 2007 ExactTarget, All Rights Reserved Entire Presentation Copyright © 2003 - 2008 ExactTarget. All Rights Reserved. No portion of this presentation may be recreated, reprinted, distributed, published or represented without the written permission of ExactTarget. How Email has Revolutionized Direct Marketing Tactics and Techniques to Drive Sales and Keep Customers Connected to Your Brand Joel Book Director, eMarketing Education ExactTarget, Inc.

ExactTarget is the world’s leading provider of on-demand, one-to-one, marketing software, services, and integrated solutions

About ExactTarget FOUNDED IN 2000 400+ EMPLOYEES 30 SALES OFFICES WORLDWIDE 6,000+ CLIENTS OVER 1 BILLION MONTHLY EMAILS

The Evolution of Marketing Communication

< 1990 1990s Direct Mail Telephone 1999 2000s 2008 TV Radio Print Display IM Email Direct Mail Telephone TV Radio Print Display Website Search Online Display IM Email Direct Mail Telephone TV Radio Print Display Website Search Online Display Paid Search Landing Pages Microsites Online Video Webinars Affiliate Marketing Mobile Email SMS IM Email Direct Mail Telephone TV Radio Print Display Website Search Online Display Paid Search Landing Pages Microsites Online Video Affiliate Marketing Webinars Blogs RSS Podcasts Wikis Social Networks Mobile Web Addressable Voice Mobile Email SMS + MMS IM Email Direct Mail Telephone TV Radio Print Display Website Search Online Display Paid Search Landing Pages Microsites Online Video Affiliate Marketing Webinars Blogs RSS Podcasts Wikis Social Networks Mobile Web Behavioral Social Media & Ads Virtual Worlds Widgets Twitter

The average consumer is exposed to 3000 ad messages each day.

Welcome to the Digital Age of Direct Marketing

Websites have become the “Hub” of Marketing Trade Shows Sponsored Events Print Advertising Direct Mail Social Networks Broadcast Advertising Public Relations Webinars Search Engine Marketing Word of Mouth Online Advertisements Corporate Blogs The Web

The Buying Process Begins with Website Visit “ 92% of business buyers go online to research products and suppliers.” Source: Forrester Research (July, 2007) “ 51% of consumers are researching on the Internet, then completing their purchases offline.” Source: Jupiter Research The Customer Life Cycle Interest Evaluation Purchase Usage Loyalty Re-Purchase Website Visit

WEBSITE SEARCH EMAIL “ Selling now takes more time and resources then ever before. The average sales cycle has become 22% longer as buyers are taking longer to consider their decisions.” Source: Sirius Decisions

Email Aids the Decision-Making Process The Customer Life Cycle Interest Evaluation Purchase Usage Loyalty Re-Purchase “ Those who buy products marketed through email spend 138% more than non-readers of email.” Source: Forrester Research “E-Mail Marketing Comes of Age.”

“ Once a person has been attracted to your web site, email can move the prospect through the consideration and evaluation stages . . . all the way to purchase.”

Source: Forrester Research

Email is Preferred for Direct Marketing Nearly two-thirds of US Internet users made a purchase because of a marketing message received through email . Source: ExactTarget 2008 Channel Preference Survey May 23, 2008

Email is #1 for ROI Source: The Direct Marketing Association (DMA)

“ Commercial email ROI will hit $45.65 for every dollar spent in 2008.”

“ Email produces the highest response rate of direct marketing methods studied."

5 Tips for Successful Email Marketing

Earn the subscriber’s trust .

5 Tips to Maximize Response

*SOURCE: 2008 Spam Complaints Survey from Marketing Sherpa & Q Interactive Consumers are Pushing Back 56% consider messages from known senders to be spam if they aren’t “interesting” 50% consider messages from known senders that are sent too frequently to be spam 48% are using “report spam” buttons for reasons other than to report unsolicited email

Subscribers Rule! Serve the subscriber’s needs … and they will serve yours

HP Sells the Value of Email Registration!

HP invites subscribers to identify preferences for newsletter content

HP explains why these questions are being asked.

HP Technology at Work

Newsletter content is dynamically personalized based on customer-defined interests and preferences.

Special offers, event invitations and alerts are based on HP products used and subscriber-defined product interests.

Test landing page and email creative.

Tests that Yield Highest ROI (2007-2008)

To Maximize ROI on ANY Campaign, Use the Following Optimization Sequence

Optimize Your Product/Offer (Product/Service Value Proposition)

Optimize the Presentation of the Offer (Landing Page and Order Process)

Optimize the Channel (Email, Mobile, SMS, Voice, etc.)

The form is lengthy and asks for 11 different pieces of information to subscribe to a “free” publication. These extra fields and steps create friction, making it more time consuming and aggravating to complete the offer form. Original Landing Page Objective: Drive Signup for Free Email Newsletter

The form has been reduced from 11 fields to just 3. The flow of the entire page is shortened, thereby substantially reducing friction and increasing conversion. If the additional fields are needed to deliver the final product or service, then move them to an incentivized post-conversion step. Optimized Landing Page

Align Landing Page and Email Creative

Make sure the email creative and landing page creative tie together. If they don’t conversion will suffer.

Landing Page Email

Engage with Eye-Catching Design

Why this design works

Emotional, relevant imagery

Clean, uncluttered graphics

Color backgrounds & borders for content areas

Buttons, color links to entice responsive action

Clear call-to-action

Interactive zones: Q&A, submit tips, survey, share an idea

Example: B-to-C

Engage with Eye-Catching Design

Why this design works

Logo is in upper left

Text headline (not a graphic) is used for main article

TOC appears in in upper left quadrant

Color backgrounds & borders for content areas

Interactive zones: Q&A, submit tips, survey, share an idea

Type font and size are easy to read.

Example: B-to-B

Deliver content personalized to needs and interests.

Segmentation Doubles Opens and Click Rates

Purpose:

To cultivate global prospects by:

Providing content, tailored to their country and their specific selected interests.

Keeping them actively engaged as they move from awareness through consideration to a purchase decision.

My EMC Insight

EMC invites email subscribers to identify their geo location and topics of interest.

Data is transferred to the EMC Global Marketing Database

Subscriber-supplied data is used to dynamically personalize email content

“ 83% of consumers want more control of what email content they receive.” Source: MarketingSherpa, 2007 Subscription Center

How EMC Delivers Personalized Content

9 Solutions of Interest

BURA

Information Security

Business Continuity

Content Management

Oracle

Microsoft

SAP

Storage

Virtualization

3 Buying Process Stages

Early: prospect researching a solution

High level overviews

Analyst whitepapers

Middle: prospect evaluating vendors

Customer case studies

In-depth technical notes

Late: prospect ready to buy product or a solution

Product spec sheets

Technical whitepapers

Three Stages X 9 Tracks = 27 Different Pieces of Content for Each Issue. My EMC Insight

Segmentation Strategy

Market First Prospects Registered Subscribers Defined Interests Content Viewed Subscriber Country Output File For Email My EMC Insight Send My EMC Insight

TOC (Dynamic Content )

Changes by country, user –defined interests, and buying stage

Feature Article (Static Content)

Features events, products, and content that the whole subscriber base receives

Other Articles (Dynamic Content)

Changes by country, user interest and intensity of interest

Creative expands to allow up to 9 dynamic offers

My EMC Insight 2. 3. 1.

Align online strategy and process with off-line.

Uses email to drive traffic to stores

Left hand well for national messaging

Right hand well for local messaging

Offers are personalized for individual customer

One offer for existing favorite

Second offer promotes trial of new product

Cold Stone Creamery Gets It!

Johnston & Murphy Gets It!

The Challenge

Acquire new customers

Accelerate re-purchase and cross-sell

The Solution

Invite opt-in through website and stores

Automated email campaign triggered by “life-cycle events” (i.e. first purchase)

Personalized offers based on interest or purchase behavior

The Results

New Customers: Up 29% in last 24 months

Email Open Rate: Up 18%

Email Response Rate: Up 44%

Sales Generated from Email: Up 33%

Example: Online Ordering using Email + SMS

Papa John’s uses email to drive registration for its SMS-based online ordering system

In May, 2008, Papa John’s surpassed $1 Billion in online sales

Since 2001, customers have placed nearly 60 million orders at papajohns.com

Online represents more than 20% of total sales

Don’t Ignore Mobile!

Mobile is huge! The global mobile market subscriber base reached 3.25 billion in July 07.

2007 also marked the beginning of a new era for smartphones which overtook sales of PCs and Laptops for the first time.

The market for smartphones is expected to reach 1 billion units and grow a phenomenal 1600% in the next three years.

Sources: The Mobile World, June 07; The Yankee Group; IDC, Gartner, Canalys 2006

Banana Republic Gets It!

Behavioral Targeting Optimizes Relevance Visitor arrives at your website Visitor Profile Repository Call goes out to Visitor Profile Repository create profile First-time visitor Automated Self-learning Predictive Modeling Engine Repeat visitor retrieve profile Optimal content decision sent to ExactTarget Content Library ExactTarget sends email with content tailored to visitor profile

Align online strategy and process with off-line.

Measure what matters.

What Metrics Should Marketers Be Tracking? Metric Definition Value Click-to-open ratio Click rate divided by open rate Provides a measure of relevance by removing the unopened emails from the equation. Asks the question: “Once someone opens, how relevant do they find the content? Click times conversion Clickthrough times conversion rate Takes open rates out of the calculation of success and looks at how the campaign performed with recipients who clicked. Revenue per email Total revenue generated by a campaign divided by emails sent Assesses the value of different messages, offers, etc., by comparing the revenue attached to specific campaigns. A good metric with which to communicate the value of email marketing at budget time. Also a powerful metric with which to evaluate the dollar impact of poor deliverability. Order size per email Total orders divided by emails delivered Effective for comparing campaign messaging. Categories based on order size may also be good for segmentation. Leads per email For lead generation- focused marketers — total number of leads divided by emails delivered Allows for easy comparison of offers and lists. Engagement per campaign Based on marketers’ activities Looks at non-financial impact by measuring engagement activities, such as registering, entering a contest, commenting to a list, amending a profile, etc.

Resources to Help You Improve Your Game

© 2007 ExactTarget, All Rights Reserved Entire Presentation Copyright © 2003 - 2008 ExactTarget. All Rights Reserved. No portion of this presentation may be recreated, reprinted, distributed, published or represented without the written permission of ExactTarget. Thanks! Joel Book Director, eMarketing Education ExactTarget, Inc. Email: [email_address] Phone: 317.275.5444 Blog: Email Marketing by the Book