The October 2006 Power of Direct report from the Direct Marketing Association (via EmailLabs) once again established the supremacy of permission-based email.
Projected ROI per channel, 2006:
- Email ROI per $1US spent: $51.45
- Print catalogs: $7.20
- Non-email Internet marketing: $21.08
Total industry spending projected 2006:
- Email: $400 million
- Print catalogs: $20 billion
- Non-email Internet marketing: NA
Projected sales generation, 2006:
- Email: $18.5 billion (+14.9%)
- All direct marketing: $1.939 trillion
- Non-email Internet marketing: $338.9 billion
Additional Benefits to the Direct Email Marketer
Not only do you have a significant cost savings from email marketing but it’s far easier to understand how the market responds to your offer and make appropriate adjustments. Open rates, click through rates, unsubscribes and purchases (or conversions) can all be – relatively – easily measured and reacted to.
Contrast this with direct mail. You have a very limited idea of how many pieces actually reached your market and practically no idea of how many were immediately discarded, read and acted on, or set aside for future action. To me, direct mail has always been a huge crap shoot.
The other thing about email vs. direct that can make it so powerful is the ease with which you can test various offers to make sure you have exactly the right offer for your target market. As a small business owner and manager most of my career I’d heard the mantra of test, test, test over and over with respect to my direct mail campaigns. Unfortunately, testing was something that I didn’t have the luxury of either a large enough list and, more importantly, a large enough budget to afford.
Email marketing changes all of that. Once you’ve eliminated (or vastly reduced) the costs of printing and distribution (postage, labor, etc.) you find that you do have the resources to test and effectively track the outcomes of those tests. Try this on your next email marketing send … Regardless of the size of your list, carve out 10% and send them 2 different offers. Try different pricing, free shipping, bundling, or urgency to name a few testable factors. Note which test offer got the best response – and, if this difference is significant – send that offer to the entire list. If both test offers sucked, you’ll have also learned something of value and you can take these lessons back to the drawing board.
