BoldFish Note Beyond Email Marketing: Achieving Exponential ROI via Business Integrated Messaging 471 El Camino Real Suite 110 Santa Clara, CA 95050 408.236.3620 Overview Email has taken on a fundamental shift: it has evolved from a mere communication tool into a proactive business-messaging communication channel. It is a technology that allows you to communicate with your customers, prospects, and partners in ways never before possible. Innovative uses of high-volume personalized messaging can significantly affect your company s bottom line. This paper reviews the evolution of high-volume email and provides a few examples of how some companies have improved their bottom line through uses of this powerful business communication tool.
BoldFish offers a variety of products, services, and resources to help companies implement business integrated messaging. Visit to learn more about the products and services that BoldFish offers. Email and The Different Levels of ROI The implementation of high-volume email technology into the sales and marketing efforts of an organization typically results in a high return on investment (ROI). Email complements the effects of traditional direct marketing pull mechanisms with the unique aspect of push awareness. For example, instead of asking a person via a brochure or catalog to go to your site to make a purchase, email delivers a shopping cart to their inbox. Recipients merely click on your email to satisfy their need for the product and your need for the sale. This can be extended into the realm of content delivery in the case of publishers, for example. But email is capable of going beyond this type of marketing focus. It is capable of delivering information, which, until the broad reach of Internet email, was impossible to disseminate in any other way. Business integrated messaging has the capability of being event-driven. The integration of email and other business systems can trigger emails that ultimately increase your ROI and significantly impact your company s bottom line. The chart below shows how the use of high-volume email has evolved over time and how this evolution has improved the ROI that users have received by using this powerful communications medium. High ROI Event Driven & Tailored Email allows you to undertake campaigns that were impossible with traditional communication methods. Return on Investment (ROI) Low ROI Planned and Generic Email provides a significant savings over traditional direct marketing mediums, like direct mail. Reduced production and postage costs result in a higher ROI. Planned and Tailored Email includes features like personalization, fast response rates, and trackable results. These new features provide you with higher response rates, improved customer satisfaction, and ultimately a higher ROI. Email can be used to communicate faster than ever before and on a scale that was never before possible. Companies are sending things like storm alerts, product recall information, portfolio updates, proxy announcements and preventative safety alerts which can positively effect the bottom-line of the organization. Cheaper Better Smarter Cheaper Companies began to use email over traditional marketing avenues because it provides a significant cost savings. With email, design charges are lower. Print charges are non-existent, fulfillment house roles are nonexistent, and distribution costs are significantly cheaper (see Table 1). These cost savings contribute to an increase in ROI, but cost savings are just the beginning of the ROI power of email. The types of email in this cheaper phase would include the emailing of planned, generic messages such as company newsletters and product catalogs. Page 2
Visit The BoldFish Opt-In Resource Center Online to learn more about best practices in Opt-In Email Communications. Email Direct Mail Cheaper: Delivery cost per thousand $30 $500 Resulting cost per customer $6 $17 Up-front creative cost $1k $20k Better: Click-through rate 10% N/A Customer conversion rate 5% 3% Execution time 3 weeks 3 months Response time 48 hours 3 weeks Table 1: Source: Jupiter Communications, 2000 Better Email gives you the opportunity for greater power and functionality over traditional direct marketing methods. Email allows extensive personalization to tailor the content of the message uniquely for each recipient s interests or history, which results in higher response and conversion rates (see table 1) and ultimately higher revenues. Email allows the sender to easily segment their list(s) based on any number of criteria and send different, targeted offerings to each segment. Prior to email, this sort of segmenting was possible, but extremely costly. Email also enables the sender to determine the impact of the offers included by using the tracking capabilities of email. The following are examples of how some companies have used email to improve their direct communications efforts. Fitness Clubs/Weight Loss Plans Fitness clubs and weight loss organizations increase their email ROI by sending personalized fitness plans, recipes, and/or diet plans that are specific to each of their subscribers based on their fitness goals. These messages are customized to include information on the company s services that would help the subscribers reach their goals. In the case of a fitness club, this has lead to lengthier memberships (continuing or increased revenues) and members buying other a la carte health club services such as nutrition counseling, personal training sessions, and other offerings such as massage therapy. In the case of weight loss organizations, diet plans sent to members include the company s products as part of the plan, thus increasing revenues. It also promotes goodwill and helps to build a long-term relationship with each customer in the form of weight-maintenance programs. Newspaper and Magazine Publishers Email newsletters allow a significant amount of personalization within the message itself as well as the ability to push specific content to targeted members of a distribution list. This personalization allows publishers to insert ads to that are targeted to specific demographic segments of their lists as well as specific content to segments of their list. Publishers can charge much higher rates for insertions and thus increase their revenues and advertisers response rates. Smarter Now companies are getting smarter with their email campaigns. They are finding new uses for email that go beyond email marketing and results in the highest ROI. By using email in innovative ways, they are fundamentally changing the way their company does business and are providing a competitive advantage that was not previously possible. Until now, there was no way to embark upon this type of mass dissemination of information in such a personal way. The following examples provide you with concrete examples of how a few companies have gone beyond email marketing and used email in smarter ways to improve their bottom line. Page 3
Insurance Companies An insurance company uses email to send out personalized storm warnings via email to all their home policy owners in the area where the storm is expected. These storm warnings include tips on how the policy can protect their home from storm damage (i.e. how to board up your windows for an anticipated hurricane or how to protect water pipes against a cold winter storm). This not only creates an enormous amount of goodwill for the company, it also lowers the amount of claims that they have to pay out thus positively affecting the company s bottom line. On average, this company receives 1,000 claims a year that averages $25,000 a claim. If these types of email campaigns help reduce the number of claims by just a conservative 1%, the result is a savings of at least $250,000 per year. Financial Services Company Before email, brokers used regular mail to communicate changes in a client s portfolio on a monthly basis. Stock alerts were only transmittable on a one to one basis, usually by phone, limiting the number of trades generated by a stock alert and thus limiting the number of commissions realized by the firm. Now, with email, portfolio information can be automatically emailed to every client (or their representative) at the end of each trading day. Email stock alerts can automatically sent whenever a stock reaches a certain price. The key difference is that the company can communicate with all customers, not just a select few, via personalized messages to their client base. This makes their clients more active in the management of their accounts, and increases the amount of stock trades and/or purchases and sales of mutual fund shares. This increased trading results in increased commissions generated for the brokerage while increasing client satisfaction. Publicly Traded Companies Many proxy votes are shelved due to lack of response from traditional printed materials. Publicly traded companies can now use email as the method of distribution for proxy voting - a higher turnout results, and referendums can be processed. This eliminates the limbo that accompanies proxies that do not receive enough votes for action. Companies receive the mandates they need, and can move forward with important initiatives. Resorts For a ski resort that wanted to lure as many people as possible to slopes for the weekend, email was the ideal medium. By notifying their visitors about peak skiing conditions for the coming weekend, if the season starts earlier or extends later than anticipated, email helps them get the word out in an inexpensive, proactive manner thus increasing sales. A direct mail piece cannot do this due to the delay time in production and mailing. A hotline with ski conditions isn t as effective either because it requires the customer to think about going skiing first and calling the hotline. Email however, is a push technology that allows the resort to be proactive and push the tempting information to their customers. Auto Insurance By distributing auto recall notices to appropriate car owners as quickly as possible via email, insurance companies can reduce repairs, injuries, and accident claims, thus improving their bottom lines. Health Insurance Plans Health Insurance companies are now sending personalized, secure notifications to members on preventative health issues. For example, notifying women that they are due for mammograms at a certain age can prevent potentially larger claims down the road for an undiagnosed illness. Distinguishing the Difference in Phases If you are still confused as to the difference between the three phases of email, here s an example that will help you get on the right track. If you were a credit card issuer, here is how your ROI increases with each phase: Page 4
Cheaper By utilizing email, in lieu of sending a paper bill which requires extensive print and postage costs as well as planning efforts, you can notify cardholders when their bill is available for viewing online via an embedded URL in your message. You can also use email to notify customers en masse about changes to overall policies, or new features of your credit card, such as a picture card option. The return on investment derived from using email will typically be driven by cost savings from avoided printed material and reduced postal costs. Better A better use of email would be to send a personalized bill within the message itself, alleviating the need for the recipient to go to your website to view their bill. The cardholder can then authorize direct payment of the bill with a click of the mouse. You can also use email to let a customer know when they are reaching, or have reached their credit limit. The personalization allows you to deliver custom content to each individual in your database. The timeliness of the message keeps the cardholder from exceeding their limit, avoiding, penalties, and late fees. The card issuer ensures that cardholders don t overextend themselves and become delinquent. By generating such messages automatically, there is little or no need to allocate call center staff to place similar phone calls. Smarter A smarter way to use email would be, for example, an application that integrates with the company s credit risk assessment application to identify those cardholders who are in danger of becoming delinquent, or whose spending patterns have dramatically shifted in ways that signal potential problems. Email can be used to alert cardholders to potential theft or abuse, can offer budgeting suggestions, or referral to consumer agencies to help them manage debt. Alternately, to drive demand, the card company could offer shopping watchdogs that monitor multiple online retail or travel specials, and alert the customer when a product they ve expressed an interest in goes on sale (and present a link to make a one-click purchase using the company s card). These capabilities go beyond email marketing to the core to the credit company s business proactively preventing losses, and increasing card usage. What is most important to remember is this: In order to take advantage of these benefits, it will require an integrated solution on your part - one that integrates a high-volume messaging system with your customer database, your CRM package, and any other relevant business system. Outsourcing cannot provide you with this increased ROI due to the lack of API s and database integration. About BoldFish, Inc. Started in 1997, BoldFish, Inc. is pioneering the development of high-volume, outbound email systems. BoldFish is the leader in the latest phase of email Business Integrated Messaging providing software and services to enterprises that need to communicate to customers, partners, employees or investors in ways never before possible. The BoldFish system enables highvolume, high-speed, personalized email delivery with intelligent management of bounced messages, while minimizing enterprise network load and increasing an organization s ROI. With an architecture and product that enables the sending of millions of messages, BoldFish has a unique "opt-in" philosophy and incorporates an anti-spam clause in its licensing. Headquartered in Santa Clara, California, BoldFish is privately held and is venture-funded by Alloy Ventures and the Mayfield Fund. Learn more about BoldFish online at www.boldfish.com. BoldFish, Inc., 471 El Camino Real, Suite 110, Santa Clara, CA 95050 Tel 408-236-3620 Fax 408-236-3699 Email: info@boldfish.com. Page 5