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One of the theoretical big pluses of ecommerce was that
its lower marketing costs would make it more profitable than all other
shopping channels, both retail and remote shopping. However, one of
the most perplexing problems is the low prospecting response rates
everyone is experiencing.
There are five basic ways one can drive traffic to a website. They are
email campaigns, traditional advertising, viral marketing, portals and
traditional direct marketing such as catalogs.
No one will question that traditional advertising has proven
ineffective for most companies in ecommerce. Viral marketing seems to
work for a few sites but not the majority, as only a few people really
understand how to conduct viral marketing. Portals are the most
effective of all web based marketing efforts and for many is actually
meeting costs similar to traditional direct marketing which is still
the best way to drive traffic at an acceptable cost.
Although it was originally believed emails would lower ecommerce
marketing costs this has not happened. The response rates in email
marketing, especially for when prospecting, are too low. Not only
lower than that of all other forms of remote shopping but even too low
to make sites economically viable.
Unfortunately, there does not appear to be an easy answer how to
correct the ineffectiveness of email prospecting for most companies.
This is due to three prime reasons:
1. The static nature of emails
2. Limited broadband capabilities
3. Too few remote shoppers.
Emails are the most restricted form of advertising we have seen in the
past 100 years. In today’s world, where everyone is bombarded with
advertising messages, capturing a person’s attention for even a moment
is a very difficult task.
The static nature of emails is due to the limitations of the initial
design. The engineers and programmers that created the format for
emailing on the Internet were not concerned with commerce at the time.
They saw emailing as a form of communication like a letter or memo,
something to allow people to write to each other electronically. This
coupled with the technology of the time made them limit the length of
the subject line to a few words. Yet, this is where the advertising
occurs if one is to attract a prospect to their site. Only later did
marketers decide they would use emails as a form of driving traffic to
an ecommerce site.
The word limitations of the email subject line are greater than one
finds in any other form of advertising. Thus, creating one of the
greatest challenges in advertising history for copywriters. To write a
3-8-word headline that will generate click throughs. Even John Caples
had the benefit of an illustration of someone sitting at a piano to
support his famous headline.
Until there is a total redo of the protocol for electronic
communications companies are stuck with the limits of the subject line
protocol. Thus, the number one task for all marketers in ecommerce is
to develop captivating subject lines that generate click throughs.
The second problem is the lack of broadband width. The majority of
remote shopping is still done from the home where the customer has the
time to shop leisurely. Yet most homes today and for the next five to
seven years will be limited to connections at modem speeds of 56.4 kbs
or less. No one is developing new modems. Instead manufacturers are
investing in broadband width solutions. However, even the most
optimistic projection has less than a third of the homes in the U.S.
broadband wired by 2005, some four years out.
Most consumers know that the typical ecommerce site is loaded with
graphics and information. To open it up will take time, which is a
precious commodity in today’s world. With narrow bandwidth they will
skip over those emails from unknown sources 99 percent of the time.
This is the reason that established companies, not new ones, are
reporting most of the successes in ecommerce. If you are trying to
attract new customers, working with a small subject line and slow
bandwidth is very daunting.
The third problem is too few remote shoppers. The traditional form of
remote shopping was classic cataloging. According to most studies,
approximately 85 percent of adults have made a catalog purchase in the
past couple of years. However, only 60 percent make at least a
purchase every year. However, Abacus or Z-24, which are cooperative
databases, report that the number of catalog buyers who do the bulk of
remote shopping are far fewer.
The cooperative databases have shown that Pareto’s 20/80 rule applies.
That 20 percent of catalog buyers are responsible for 80 percent of
the sales. Therefore, the number of “real” catalog shoppers is less
than 25 million people. Their mailboxes are constantly filled with
catalogs, even for products in which they have no interest. These are
the people most likely to shop remotely. They understand the
procedures and accept the risks in shopping remotely. One of the hopes
of ecommerce was that it would entice some of the other 180 million
adults to become remote shoppers. Unfortunately, their numbers have
been insufficient to keep many of the dot.coms afloat. The traditional
remote shopper has shopped where they knew the merchant and
merchandise even though bombarded with both physical and electronic
offers.
The excitement and media discussions about shopping remotely will
induce more people to use this method, as long as the media does not
harp on the negatives all the time.
Is there a solution? At present it appears the best solution will be
to employ both new and old marketing methods to solicit new customers.
That will require writing traffic-building headlines for your email
campaign subject line and targeting your email campaigns better by
using demographic and psychographic information as well as traditional
RFM.
As to traditional methods, one would be foolish to not utilize
catalogs and direct mail pieces that go far beyond the subject line in
showing what the company is about. Your marketing campaign should also
reflect a reason for the consumer to go to your website to place their
order. Especially if your systems are integrated and the customer is
the one inputting the order, lowering your costs. Are these steps
easy? No, but if you do not do them, it is doubtful you’ll succeed.
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