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A recent Internet Retailer survey gives email marketing a big thumbs-up, especially for its response rates and cost-effectiveness.
While some respondents were concerned about spam issues, more than two-thirds of respondents said they were stepping up email programs in 2005.
Why are marketers bullish on email's prospects this year? Here are 12 key findings from Internet Retailer's survey:
1. Sixty-eight percent of responding e-retailers said they plan to increase their email marketing this year, with a majority saying they believe email is an effective way to communicate with customers, even if that communication doesn't produce a sale.
2. Thirty-eight percent of those who are boosting their email program this year said they are responding to the growth of their online business.
3. The email boom is coming mainly from larger retailers. Eighty-two percent of those with annual online sales of $25 million or more expect to boost email programs this year, compared to 60& of those with $3 million or less.
4. While bigger retailers are more likely to ramp up email in response to growth in their Web operations, retailers with sales of $1 million or below say they will boost email as a better way to stay in touch with their customers.
5. Nearly half -- 49% -- of all respondents say email marketing is more effective than other forms of marketing their Web sites.
6. Although e-retailers praise email's effectiveness, more than half of respondents said email generates 10% or less in online sales.
7. Email generates a larger percentage of online sales for frequent mailers. Fifty-six percent of marketers who send more than one email a week report email produced 10% to 25% of online sales, compared only 15% of those who send less than one message a month.
8. Email still costs much less than other Web marketing tools, including SEM. Seventy-one percent of respondents said they spend 10% or less of their marketing budgets on email.
9. Higher frequency also equals higher response rates. Nearly 40% of e-retailers who send more than one email a week said they got a 5% response rate or better, compared with only 18% of marketers mailing less often than once a month.
10. Response rates are climbing, despite worries that spam has polluted the email channel. Almost 45% of respondents said their response rates are climbing. Of the rest, 16% report a downward trend while the remainder said response rates were holding steady.
11. The vast majority -- 88% -- of retailers said they mail to in-house rather than rented lists, no matter how large or small their online sales presence.
12. Spam figured in the email plans of 13% of respondents who said they cut back their email marketing for 2005. About a third of those blamed declining response rates on spam, and about a quarter worried about the legal risks associated with spam complaints.
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