One of the theoretical big pluses of ecommerce was that its lower marketing costs would make it more profitable than all other shopping channels, both retail and remote shopping. However, one of the most perplexing problems is the low prospecting response rates everyone is experiencing.
There are five basic ways one can drive traffic to a website. They are email campaigns, traditional advertising, viral marketing, portals and traditional direct marketing such as catalogs.
No one will question that traditional advertising has proven ineffective for most companies in ecommerce. Viral marketing seems to work for a few sites but not the majority, as only a few people really understand how to conduct viral marketing. Portals are the most effective of all web based marketing efforts and for many is actually meeting costs similar to traditional direct marketing which is still the best way to drive traffic at an acceptable cost.
Although it was originally believed emails would lower ecommerce marketing costs this has not happened. The response rates in email marketing, especially for when prospecting, are too low. Not only lower than that of all other forms of remote shopping but even too low to make sites economically viable.
Unfortunately, there does not appear to be an easy answer how to correct the ineffectiveness of email prospecting for most companies. This is due to three prime reasons:
The static nature of emails
Limited broadband capabilities
Too few remote shoppers.
Emails are the most restricted form of advertising we have seen in the past 100 years. In today’s world, where everyone is bombarded with advertising messages, capturing a person’s attention for even a moment is a very difficult task.
The static nature of emails is due to the limitations of the initial design. The engineers and programmers that created the format for emailing on the Internet were not concerned with commerce at the time.
They saw emailing as a form of communication like a letter or memo, something to allow people to write to each other electronically. This coupled with the technology of the time made them limit the length of the subject line to a few words. Yet, this is where the advertising occurs if one is to attract a prospect to their site. Only later did marketers decide they would use emails as a form of driving traffic to an ecommerce site.
The word limitations of the email subject line are greater than one finds in any other form of advertising. Thus, creating one of the greatest challenges in advertising history for copywriters. To write a 3-8-word headline that will generate click throughs. Even John Caples had the benefit of an illustration of someone sitting at a piano to support his famous headline.
Until there is a total redo of the protocol for electronic communications companies are stuck with the limits of the subject line protocol. Thus, the number one task for all marketers in ecommerce is to develop captivating subject lines that generate click throughs.
The second problem is the lack of broadband width. The majority of remote shopping is still done from the home where the customer has the time to shop leisurely. Yet most homes today and for the next five to seven years will be limited to connections at modem speeds of 56.4 kbs or less. No one is developing new modems. Instead manufacturers are investing in broadband width solutions. However, even the most optimistic projection has less than a third of the homes in the U.S. broadband wired by 2005, some four years out.
Most consumers know that the typical ecommerce site is loaded with graphics and information. To open it up will take time, which is a precious commodity in today’s world. With narrow bandwidth they will skip over those emails from unknown sources 99 percent of the time. This is the reason that established companies, not new ones, are reporting most of the successes in ecommerce. If you are trying to attract new customers, working with a small subject line and slow bandwidth is very daunting.
The third problem is too few remote shoppers. The traditional form of remote shopping was classic cataloging. According to most studies, approximately 85 percent of adults have made a catalog purchase in the past couple of years. However, only 60 percent make at least a purchase every year. However, Abacus or Z-24, which are cooperative databases, report that the number of catalog buyers who do the bulk of remote shopping are far fewer.
The cooperative databases have shown that Pareto’s 20/80 rule applies. That 20 percent of catalog buyers are responsible for 80 percent of the sales. Therefore, the number of “real” catalog shoppers is less than 25 million people. Their mailboxes are constantly filled with catalogs, even for products in which they have no interest. These are the people most likely to shop remotely. They understand the procedures and accept the risks in shopping remotely. One of the hopes of ecommerce was that it would entice some of the other 180 million adults to become remote shoppers. Unfortunately, their numbers have been insufficient to keep many of the dot.coms afloat. The traditional remote shopper has shopped where they knew the merchant and merchandise even though bombarded with both physical and electronic offers.
The excitement and media discussions about shopping remotely will induce more people to use this method, as long as the media does not harp on the negatives all the time.
Is there a solution? At present it appears the best solution will be to employ both new and old marketing methods to solicit new customers. That will require writing traffic-building headlines for your email campaign subject line and targeting your email campaigns better by using demographic and psychographic information as well as traditional RFM.
As to traditional methods, one would be foolish to not utilize catalogs and direct mail pieces that go far beyond the subject line in showing what the company is about. Your marketing campaign should also reflect a reason for the consumer to go to your website to place their order. Especially if your systems are integrated and the customer is the one inputting the order, lowering your costs. Are these steps easy? No, but if you do not do them, it is doubtful you’ll succeed.
Article courtesey of Family Business Strategies.
About the author: Bill Dean can be reached via
email or at http://www.dean-assoc.com. Bill Dean is the Founding Partner of W.A. Dean & Associates a catalog consultancy. Dean & Associates provides companies with the intelligence and professional recommendations to aid them in their decisions about their remote shopping options.