Email Marketing Value During Customer Acquisition

email marketing valueBy Jim McCormick

As companies continue to put more of an emphasis on their social media strategies there is a misconception that email marketing has become passé.  While some feared that the ascension of social media would bring about a decline for email marketing, the two have proven not be mutually exclusive. A new global marketing operations study by Custora confirmed that email marketing still remains a more effective channel of acquisition than social media. The study found that during the last four years, the rate of customer acquisition through email has quadrupled, rising to approximately 7 percent, while the acquisition rates for social media platforms like Facebook and Twitter barely registered at all.

The companies that participated in the study found that organic search was the most popular way customers reached their websites, followed by cost per click ads then email campaigns. Intuitively this makes sense, if a customer is searching for a website they have an existing interest and are more inclined to make a purchase. Email campaigns target a larger group of potential customers so the success rates are lower but the customers that are converted are more valuable.

Benefits of Email Marketing

The Custora study is able to quantify each type of ecommerce customer with a measure called the Customer Lifetime Value (CLV). The measure “refers to the future profit a company expects to earn from a customer throughout his or her relationship with the business.” Compared to the baseline CLV, organic search customers are 54% more valuable, email customers are 12% more valuable and Twitter customers are 23% less valuable. So while global marketing services use social media to successfully drive brand awareness and product promotion, the study indicates that the medium isn’t well suited for customer acquisition.

According to a Daze Info article “the global email marketing industry size is expected to be worth $6.5 billion by 2018.” The expected growth is attributed to further Internet penetration in areas currently with limited web infrastructures and the approaching ubiquity of mobile devices. The effectiveness of email marketing has benefited from the rise of smartphones and now one third of emails are opened on a mobile device, according to Yesmail Interactive. Tailoring email marketing more for mobile devices will be essential for global campaign management going forward.

Email is better suited for customer acquisition because the messages are more substantive than those that appear on social media. Promoted tweets on Twitter are ephemeral and easily passed over while the ads on Facebook are located on the perimeter of the page where users have banner blindness. Email messages are economical with their information but not restricted by the number of characters. The best email marketing is illustrative of their company and enticing enough to get the reader to click through.

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