It may sound odd, but the Holy Grail of Internet commerce and marketing is to provide the same kind of service that merchants and storekeepers did about a hundred years ago. At the turn of the last century, if you were a good customer your butcher might set aside his best cut of meat for you. He knew your tastes, your preferences, perhaps even how many family members you were buying for and whether any of them had special dietary needs. He might even suggest a few recipes every once in a while.
Customers — whether they’re buying online or walking into a store — have always patronized companies that offer good products and services. But that has never been all there is to a purchase decision — and the old-time butcher knew it. He understood four basic principles: recognize and greet every customer by name, communicate with each one as an individual, reward the best customers, and provide great service to everyone. Consumers responded accordingly, giving their business to companies that recognized them, respected their time and privacy, simplified their choices, knew when to talk and when to listen, and engaged them in open, honest communication.
But in the era of mass merchandising and mass marketing, getting to know every customer and interact with each one individually is a financial near-impossibility, especially if you’ve got tens or hundreds of thousands — perhaps even millions — of customers.
As we look at the history of retailing and customer marketing over the past one hundred years, it’s clear that there’s a direct link between technological innovation and change in retail. Incredible improvements in manufacturing, transportation, and communication technologies made three things happen.
First, manufacturing made it possible to produce and distribute an enormous range of new products with incredible efficiency.
Second, new forms of transportation and communication allowed consumers to travel greater distances to shop or even transport goods directly to consumers. The railroad made it possible to open the first department stores at the turn of the last century. Goods could be manufactured at geographically remote locations and transported by train in large volumes and at reasonable costs to the department stores. Customers, in turn, could jump on a local passenger train or streetcar and go shopping downtown. A few decades later the automobile made it feasible to build big malls outside of the town center, where there was ample and cheap real estate. New forms of communications technologies had eliminated distance as an important factor in where and how people could shop. Credit cards were invented in the 1950s, and toll-free 800 telephone numbers were introduced in the late 1970s. Both these advances gave catalog and telephone shopping and marketing a huge boost. But even though new manufacturing, transportation, and communication technologies resulted in increased product selection and reduced costs, what we as customers lost was the personal relationship with the neighborhood store owner. Service and individualized communication was not a cost-effective option for the large retail superstores and the catalog marketers. Enter the Internet.
Thanks to email, there is now a way for companies like yours to regain the ability to communicate and maintain ongoing dialogues with their customers the way they used to so many years ago. You’ll be able to get to know each one individually and give them all personalized attention and service in a timely way. You’ll be able to offer all your customers a nearly limitless selection of products and services and still set aside the best deals for the best customers. And you’ll be able to do it all not just with a few hundred customers but with millions.
What’s the secret? Email marketing, which we define in this book as personalized Internet direct marketing and communication based on strategic marketing program design, and data analysis. Email marketing is about helping you to understand who your most valuable customers are, establish meaningful dialogues with them, and offer them individualized service in order to realize the maximum value from them over time. It’s about allowing your customers to communicate with you in ways they never could before. More broadly, email marketing is about helping you understand how you can use customer insight combined with finely targeted, personalized, and timed communication to meet your bottom-line business (and marketing) objectives.
The problem is, email marketing is still largely misunderstood and misused. What could and should be the single most effective tool for building a lasting dialogue with prospects and customers ends up not only wasting a lot of time and money but alienating customers who are sick and tired of receiving spam. It doesn’t have to be this way.
An Engaged Customer Is A Valuable Customer
Although every company will take a slightly different approach to designing a strategic email marketing program, they are all realizing how important it is to engage their customers — to have an ongoing dialogue with them, to get to know their likes and dislikes and treat them as individuals. Why? Well, let’s start with a quick definition of what the word “engaged” means. Engagement is often a first formal step on the road to marriage. We can also be engaged in our work or in extracurricular activities and hobbies. Wherever or however we use the word, engagement involves some form of ongoing, active participation in a relationship. To be engaged is to be committed. To engage is to show interest and participate.
The same applies to your business. Engaged customers listen and interact with you. They care about what your company can offer them. They spend more time with you and give you a greater share of their attention. This translates into something far more tangible: a greater share of their wallet and increased long-term value. Engaged customers are also loyal; they tell their families, friends, and colleagues about you and get them engaged as well. Simply put, the more engaged your customers are, the more valuable they are.
The New Rules of Engagement
In the old world of direct mail and telemarketing companies controlled customers’ access to the information they housed in their databases. Not surprisingly, customers usually considered themselves victims, rather than beneficiaries, of direct marketing campaigns. But today customers are no longer willing to be passive targets. Increasingly, they’re taking control, choosing which companies they will engage with and defining the terms of the interaction
