When planned and delivered effectively, small business email marketing fosters customer engagement and capitalises on sales opportunities. It offers a rapid and cost-effective means of establishing seamless communication with existing customers.

It takes time and effort to build a list of potential new customers. That said, for the right type of business, with the right process, the return on investment is often significant. In this post, we discuss the advantages of email marketing. We also cover what returns you can expect and how to maximise your return on investment.

The Advantages Of Email Marketing

A well-constructed Email marketing campaign has many advantages, these include:

  • Cheap and easy to set up and deliver.
  • Almost immediate response – Opens and click-through rates.
  • Measurement and analytics.
  • Builds trust and credibility.
  • Delivers client retention and upsell/cross-sell opportunities.
  • Delivers enquiries and sales.

Easy To Set Up

As a minimum, you will need somewhere to store contact data, a tool to build your email template and content and a mass-send mechanism.

At the entry-level, an excel (or Google) spreadsheet and a MailChimp or CampaignMonitor subscription will suffice. The cost is minimal and you also get a basic level of analytics and measurement.

Setup time should be no more than two to three hours. A basic subscription will also deliver a level of automation. That is the ability to create a series of emails triggered by subscriber activity or on a specific date.

At a higher level, you will need to segment and create groups of customers, so each receives a different message or message flow. At this level, there are more sophisticated tools available, such as Salesforce or Marketo. The downside is these systems are more costly and take longer to learn, maintain and manage.

Immediate Response

With Email marketing, there is no waiting for weeks or months to analyse a campaign. Generally, most prospects open emails within 48 hours of the send. Worse case you should have a complete picture of a Email delivery results within two weeks.

A fast response enables the marketer to make rapid changes (if necessary) to a campaign. Small-scale testing is possible before committing to a larger campaign. More importantly, it is possible to show management a result. This helps secure ongoing support for Email campaigns.

Analytics and Measurement

As mentioned above, Email marketing delivers detailed analytics and measurement data. However, as with all analytics, take care to establish exactly what the data means.

Data is available at the campaign level (open rates) down to the subscriber level. At the individual prospect level, it is possible to determine when an email was opened, the content viewed and the action taken. Over time it is possible to determine your most active prospects. You can use this information to refine deliveries and message flow.

The quality and depth of the analytics data available are dependent on the sophistication of the CRM software. As with all analytics data, it is important to measure the cost of time spent on retrieving and analysing data with the benefits.

Builds Trust

Email marketing should be a long-term (drip, drip) process. Expect results from a one-off email blast and you will be disappointed. Manage an Email campaign properly over time and it will build trust with prospects. Ultimately you can convert that trust into sales.

That said, manage trust with extreme care. Remember you can destroy your small business reputation in an instant with messages that are off-topic, or worse, too pushy or salesy.

Client Retention

Marketers, across all industries, tend to focus too much on prospects and not enough on existing customers. If properly managed, existing customers deliver repeat sales and upsell/cross-sell opportunities. They also deliver referrals, reviews and testimonials that are the lifeblood of service businesses.

Email marketing is perfect for customer retention. You have their address, you have a relationship and the existing customer is much more likely to open your email than any cold prospect. Hopefully, you have a good relationship, but a well-built email process can continue to build trust.

New Sales Leads

The benefits of Email marketing grow with increasing list size. Some estimates state that a well-constructed Email campaign can deliver ROIs of 600%. The key to success is to ensure any message delivered is relevant.

Content must be interesting and short, with links to a website for more information. The Email subject line must be compelling. Avoid words which could categorise the Email as spam. Expect the best results from well-thought-out Email campaigns where each Email builds on the previous one to deliver a desired outcome.

Email Marketing – The Numbers

The basic ROI calculation is (returns – spend) / spend. Simple in principle, but in practice evaluating your return on the campaign can be a problem.

For example, an email campaign might generate a lead. In some cases, follow-up will be immediate, in others, the sales process could take several months. Given many factors can influence the sale, what sales value is due to the campaign?

One way around the problem is to allocate a value to a lead generated by the small business email marketing campaign. Unless you have a relatively straightforward business, deciding on this value can only be an approximation.

You might see ROI on email marketing campaigns quoted as anywhere between 35 and 50 times your investment. Given the above discussion, be careful with these numbers. What matters is your business and your ROI.

On the spending side of the equation, remember to include the costs of tools, training and setup. For a small business these costs are generally low, but be sure to include them in the calculation.

What Is Your Objective?

For best results, determine the campaign objective at the earliest possible stage. With this in place, develop a content plan. Then decide on an appropriate frequency of delivery. Each Email must deliver value as repetition is counterproductive.

Email marketing objectives can include increasing website traffic, increasing sales, building brand awareness or nurturing established relationships. Be careful to select your objective and then stick to it. To a point, there is some crossover between objectives, but you should understand what outcome you desire.

You need to decide if you intend to focus on potential new customers, existing customers or both. Also determine what resources (time primarily) you can allocate to Email marketing. It might not be possible to cover everything. If so, our advice is to start with existing customers.

Maximise Email Marketing ROI

To maximise Email marketing ROI, you first need a compelling reason for people to subscribe. You should offer something of real value. This applies to both existing and new customers. There is value in products and services (obviously!) but also in high-quality and helpful information.

When you have secured sign-ups to your Email campaign, the next step is to build trust and establish a relationship. Understand trust takes time to build, but can take seconds to destroy. Trust is one of the foundations of a strong Email marketing ROI.

Finally, as your list builds, you need to minimise unsubscribes. You should deliver value to your subscribers over the long term. Small business Email marketing campaigns can show results but be careful to stick to your plan and focus.

For best long results, keep abreast of the latest Email marketing techniques. Good practice develops over time and it is best to be aware of what works and what is outdated. Most Email marketing solutions are useful tools, but they require hard work, expertise and ongoing commitment to achieve the best results.

It is also important to understand the latest legislation on protecting customer data and what is (and is not) allowed by that legislation. Assuming something is acceptable because a competitor uses it is not a sensible way forward.

The advantages of Email are also its worst enemy. Email’s ease of use and low cost means it is an ideal medium for spammers. Symantec estimates 92% of all Email sent is spam. It is vital any campaign is well-designed, targeted, and provides immediate value to the prospect.

Bad practice over many years has damaged the credibility of Email marketing. Open rates have fallen over time. The Email marketer must work hard to overcome those barriers and deliver a consistent and valuable customer experience.

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