Is Email Marketing Still Effective for Businesses in 2023?
As per a McKinsey Global Institute analysis, managers and professionals spend 28% of their workday reading and answering emails. While internal communication emails are for employee engagement, companies also widely use them for interacting with and influencing consumers. Why is Email Marketing Important for Businesses? Let’s find out today.
“Email has an ability many channels don’t: creating valuable, personal touches – at scale” –
David Newman, a renowned marketing expert, and author. Well, these words throw light on the impact email marketing can create for businesses.
No wonder that email has been a highly popular and indispensable communication format ever since its advent. Today, having an email address is not as uncommon as having any other contact details.
As per Statistica, a market and consumer data company, in 2019, there were 3.9 billion email users worldwide. And the estimates show that, in the coming years, the global email audience will only increase.
Furthermore, close to 281 billion emails, both consumer and business emails, were sent and received every day globally in 2018. This number is forecasted to increase to over 347 billion by 2023.
For a long time, emails have been an effective means for product promotions and marketing. Businesses have been using emails for advertising and building relationships with customers.
What is Email Marketing?
The Cambridge Business Dictionary defines email marketing as,
“the process of using email to advertise and sell products and services.”
Mailchimp, an email marketing company defines email marketing as, “a form of direct marketing that uses email to promote your business’s products or services.”
Perse, email marketing is one of the digital marketing channels used by businesses with the following objectives,
- Creating awareness about the brand
- Converting prospects into customers
- Retaining existing customers
- Informing customers of new product developments and changes
- Improving traffic to desired websites or social media pages
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How do businesses carry out email marketing?
Let us know the types of emails sent out as part of the email marketing campaign.
Types of Email Marketing
Welcome Emails
A welcome email is the first email sent to the new subscribers or customers confirming the subscription and congratulating them. Through welcome emails, brands introduce themselves, provide links for products or services, and invite new subscribers to their social media channels.
The open rates and click-through rates are higher for welcome emails over other email types, making it the most effective.
According to The Email Marketing Benchmarks Report from GetResponse, an email marketing software provider, in 2019, a welcome mail had an 88.7% open rate and a 35.07% click-through rate. These statistics indicate the value welcome emails offer to the marketer.
Also, welcome emails provide immense opportunities for conversions. Exclusive offers, coupons, or content are made available to entice a new audience and to build a relationship with them.
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Promotional Emails
As the name goes, promotional emails promote products or services or marketing offers. The primary objective of such emails is to push customers to make buying decisions.
However, having decent open rates and click-through rates for promotional emails in a crowded inbox is quite challenging. As such, marketers put effort to differentiate themselves and grab the attention of the readers.
For standing out in the crowd, emails include limited-time deals, flash sales, attractive graphics, captivating GIFs, eye-catchy subject lines, clear offer description, free product or service offers, call-to-action links, and so on. The reader is convinced to take call-to-action in all intriguing ways.
Even so, marketing emails to be effective must not sound too promotional. The audience may unsubscribe or mark it as spam if the emails are overly bothering or annoying.
Transactional Emails
Transactional emails are ones sent out confirming a commercial transaction. For instance, specific actions like a purchase, sign up, reservation booking, password resets, and so on trigger automated emails, referred to as transactional emails.
As these emails provide the information required for customers, the open rate is high. According to the Email Marketing Benchmarks Report, triggered emails have an open rate of 44.05% and a click-through rate of 10.39%.
As such, transactional emails provide an opportunity for marketers to reinforce customers’ purchase decisions and upsell products with customer engagement.
Newsletter Email
Emails sent regularly, such as a weekly or monthly roundup, to build a relationship with the customers, are termed email newsletters. These emails usually share useful and informative content with customers in a consistent manne
Newetter emails comprise company updates, blog items – articles, product information, or any other content which can help to connect with customers and build top-of-mind awareness.
Since newsletters are scheduled for regular communication from the company, the email content should be intriguing to keep the readers glued. Otherwise, the chances of unsubscribing would be high.
Milestone Email
Milestone emails celebrate important milestones of customers like anniversaries, birthdays, special occasions, and so on. These emails have tailored content to increase customer engagement.
The objective of milestone emails is to make a customer feel important by offering an exclusive experience, which increases customers association with the product or service for a long time.
Survey Emails
Survey emails are feedback requests sent to customers to know them better. Marketers often come up with attractive coupons, incentives, and so on for the readers, to encourage them to respond to the survey.
Feedback is crucial to understand customers, to know what they think about products or services, the improvements or changes they want to see in the offerings, and so on.
With survey emails, businesses can gain valuable insights from customers and use the information to serving them better.
Wh does Email Marketing work for businesses?
Email Marketing is an effective digital marketing strategy for businesses, considering the various advantages it offers. Let us look at a few of them.
Return on investments (ROI)
When it comes to ROI, the email marketing channel is the most attractive one. As per a Campaign Monitor’s article, the ROI of email marketing is 4,400%, wherein every dollar spent by a company yields an average return of $44.
What points contribute to the ROI of email marketing?
- Through emails, companies send custom-made and relevant information to targeted customers. Right and engaging content helps in improving click-through rates and conversions and thereby leading to improved sales.
- Emails help in building positive relationships through scheduled communication. Connecting with customers enables them to influence their buying decisions and generate sales.
- Furthermore, relevant and useful email content always offers value and keeps prospects and customers interested in the brand.
Affordability
The absence of print cost, digital ad space cost, traditional advertising cost, and so on makes email marketing cost-effective. If working with an email marketing management agency, businesses have a choice of various pricing plans. The basic packages for email marketing are pocket-friendly.
Moreover, considering the number of emails sent regularly, companies are incurring very low or no per-unit cost.
Furthermore, the time spent on setting up email marketing campaigns is less, slashing down all expenses incurred in traditional channels due to the time factor.
Audience Reach
With the penetration of the internet worldwide and the number of internet users manifold, there is a large potential customer base to reach digitally.
With email users standing at 3.9 billion globally, email as a marketing channel provides an enormous opportunity for marketers to tap its potential. Moreover, email marketing statistics like open rates and click-through rates are quite promising.
Out of ten welcome emails sent, more than eight emails are opened. And 1 out of 4 readers click-through the websites. Emails sent with exclusive content, graphics and images are attracting the audience even more.
Personalized Messaging
An email enables marketers to send tailor-made messages to improve open rates. By personalizing email content, the marketer ensures that every prospect or customer is delivered the value proposition.
Email personalization takes place through the segmentation of subscribers on varied parameters like geographical location, customer purchase behavior, and so on. Segmentation ensures the right content reaches the right audience, which helps in improving customer trust and loyalty.
Moreover, personalized subject lines proved to be more engaging with customers. A small technique of displaying the subscriber’s name in the subject line can drive email open rate.
Audience Connect
An email provides a better opportunity for marketers to connect with readers and establish a long-term relationship with them. Delivering worthy email content is crucial for engaging the audience between purchases.
Also, companies can strike a conversation with the audience through feedback emails and surveys. It is a way to gain inputs from customers and understand them better.
Can Email marketing be replaced as a powerful marketing tool?
The Marketing landscape is ever-evolving, offering numerous means for marketers to reach out to the audience. The growing trend of digital marketing has many digital channels like social media marketing, pay-per-click advertisements, content marketing, and so on for promotional and advertising purposes.
Email marketing is also a prominent channel of digital marketing. Infant, sending, and receiving emails have been in place since the 1970s. With the explosion of the internet in the 1990s, email usage has widely increased.
Given various benefits offered by emails like audience size, audience engagement, cost-effectiveness, and revenue generation, email marketing has been the most sought-after channel for marketers.
However, in recent years social media marketing has gained popularity among marketers with a potential user base present among various social networks. The social media platforms like Facebook, Twitter, Instagram, Linked In, YouTube, and so on built the social media marketing landscape.
As such, is there a threat to email marketing with the growing prominence of social media platforms? Can social media marketing take the place of email marketing?
Let us look into both the marketing channels comparatively.
Key Statistics on Social Media
As per Statista, a provider of market and consumer data, the key statistics on social media are as below,
- Facebook, with more than 2.7 billion monthly active users, is the biggest social network
- The Facebook audience of India is over 290 million users, which makes it a leading country for audience size.
- Facebook, Instagram, and Twitter are widely used in social platforms by global marketers.
- Marketers’ preference for social media marketing is due to reasons like increased exposure, better traffic and sales, customer loyalty, lead generation, and so on.
From the above statistics, social media marketing is promising with several benefits. As such, let us understand its effectiveness concerning email marketing.
Email Marketing and Social Media Marketing: A Comparative perspective
Uncertainty of getting noticed
No doubt social media is gaining a huge audience base and providing immense opportunities for marketers to engage with them, but the purpose of social networks is entirely different.
For instance, Facebook and Instagram are in use for sharing photos and videos, connecting with friends, and building social experiences. Here, people spend time social networking and unwinding and seeking entertainment. So, grabbing attention to promotional content is challenging.
Most of the content, posts and ads on social media may go unnoticed or do not generate enough attention unless it becomes viral. On the other hand, too many sales promotions over social networks irate the audience. Chances of receiving negative reviews and discontentment are very high, tarnishing the brand image.
However, in the case of email marketing, content is directly delivered into the inbox, wherein the possibility of reading email is high. As already observed, open rate and click-through rates for email marketing are high. Moreover, most of the audience would be subscribers and are receptive to content.
The Problem of fake accounts
Fake social media accounts create their own set of problems for marketers. The effects are low engagement and conversions rate, as fake profiles don’t involve the brand.
Perse, marketers struggle in reaching specified social media marketing goals. The incorrect numbers of social media profiles would only result in audience inaccuracy, confusion, and questions about the trustworthiness of a brand.
Additionally, fake profiles hack into the accounts of real followers of the brand and lead to virus attacks or phishing attempts. Consequently, pose a real problem for businesses and also to their audience. Although spam detectors and relevant measures are in place to curb the issue, fake followers and problematic accounts continue to rise.
The top social platform Facebook has blocked 1.7 billion accounts in the third quarter of 2019. Bochra Gharbaoui, data science manager of Facebook said,
And that doesn’t even include accounts the company prevents from ever being created in the first place.At any time, Facebook estimates that 5% of its active accounts are fraudulent.”
On the other hand, email marketing is no exception to fake email sign-ups. However, many anti-spam techniques, spam filters, and their sophisticated algorithms, and law enforcement on criminalizing spamming, have brought down email spam to a greater extent.
Issue of account deletions
Lack of trust in social media is growing among users due to privacy concerns. Doubts are persistent over the safety of information on social media platforms as user data is tracked and sold to other companies by social networks.
For instance, the Facebook and Cambridge Analytica scandal, wherein Cambridge Analytica purchased personal data of millions of American Facebook users without their knowledge for political campaigning.
In this context, Edelman president, a US-based public relations consultancy firm, referring to its study said,
We learned that there is a serious lack of confidence in social media in all regions of the world. This is a cry from the heart; people are scared. They are outraged about the violation of their privacy, and uncertain about the truth because of the plague of fake news.
In the wake of security issues, social media accounts are either temporarily deactivated or deleted by sizeable users. Also, another big reason contributing to account deletions is the negative impact of social media on mental health.
Young people are more inclined towards deactivating social media accounts fearing its negative impact. This shift poses a challenge for marketers.
On the flip side, being a one-on-one channel, email is the preferred form of communication for serious business activities. The audience is more willing to build relationships with marketers through emails. On top of this, the number of email users is projected to rise from 3.9 billion in 2019 to 4.48 billion in 2024.
Difficulty in measuring ROI
Quantifying the effectiveness of social media marketing is challenging for marketers. Although likes, shares, comments, tweets, and other social media engagements are trackable, it is hard to know their contribution to sales.
Social media marketing gives exposure to brands but measuring its impact on overall revenue is unclear. As per MDG Advertising research, a marketing and advertising agency,
“44% of CMOs say they have not been able to measure the impact of social media on their business, while 36% say they have a good qualitative sense of the impact, but can’t quantify it.”
While, in the case of email marketing metrics like open-rate, click-through rate, deliverability rate, conversion rate, bounce rate, and overall email campaign ROI help in determining the returns in a better way.
Conclusion
Since its inception, email has been constantly evolving and is a powerful marketing and advertising channel. Today, email is more than advertising means.
It is customer-centric, content-driven, compatible with devices, privacy prioritized, automated, and interactive. This ever-evolving nature of email has made it a preferred marketing channel for businesses.
