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Email Marketing 1: Customer Retention is Key

by Ben Castelli
published 08/25/06

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I must say I was impressed to find that Constant Contactemploys a development director whose sole job is to travel around and offer free training on how to use the Constant Contact service and general strategies on how to run a successful email marketing campaign. I recently attended a one such seminar here in Boulder and found it to be quite informative.

Overall the Constant Contact interface is easy to use and more intuitive compared to some other email services such as Aweber. They currently have 70k customers and are growing rapidly so they must be doing something right. Here are some interesting stats thrown out at the seminar:

- It is 6-7 times more expensive to gain a customer than to retain a customer.
- On average it takes 7 customer touches before a sale occurs.
- The average email user receives 361 emails per week and they perceive 70% to be spam.
- The industry average for open rates is 25% however this number is likely higher since many people use the preview pane and the email is not counted as an open if they do not download the images.
- Industry average for email blocking, where the email does not reach any folder is 17%

Email marketing is not a great tool for gaining new customers (spam), however it continues to be among the most inexpensive and effective ways to reach your customer base. For most business models, repeat customers will generate the most business and as a result customer retention is key.

The immediate purchaser is very small piece of the pie. Most consumers will be exposed to your product or service and then purchase at a later date. Email marketing allows you to stay in contact with potential customers and keep your business at the top of their mind.

Check out part 2 where I will highlight the steps in creating an effective email marketing campaign.



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