E-NEWSLETTERS - DEFINING AND REFINING Part 12

Decision 20 - listening

While the clickthrough and web-site outcome data can be used to second guess how well an e-newsletter is working, and what customers think of the company, there is no substitute for asking the question 'what do you think?', either face to face or through a structured survey, with recruitment of respondents through the e-newsletter or via a separate e-mail.

Since e-newsletters can become a large element of how your brand is perceived, it is important to know what people really think. We can 'See that online brands such as Tesco.com and lastminute.com poll their audiences regularly to find this out. An indication of the health of an e-newsletter can be built up using a mixture of 'watching and asking'. The Tesco.com e-newsletter seems to be in good shape, judging by the 'watching and asking' metrics provided by Kanaiya Parekh, the commercial development manager at Tesco.com, who presented the following at the 2002 Marketing Week Conference on e-mail marketing:

• 80 per cent of customers rated it as excellent
• there was a 65 per cent open rate (against the industry average of <20 href="http://internet2010.blogspot.com/search/label/cent" _fcksavedurl="http://internet2010.blogspot.com/search/label/cent">cent)
• 50 per cent of customers read the entire e-mail
• 20 per cent of customers purchased due to e-mail
• an additional 37 per cent of customers were considering purchase
• 13 per cent of customers forwarded the e-newsletter to friends/family
• there was a 5-10 per cent average clickthrough rate
• there were less than 1 per cent unsubscribes.

Managing Inbound E-mail House List

There will be a high turnover of your e-mail addresses or 'gone-aways' (in traditional direct mail speak). Research by MercerMC (2001) showed that, on average, 20 per cent of customers in a typical database will change their contact information over the course of a year. Changes vary from 16 per cent for the address and 17 per cent for the job to 25 per cent for the e-mail address and 33 per cent for a cell-phone number. Furthermore, they estimate that the cost of updating or reconsenting these databases can run into tens of millions of dollars for a large database — not to mention the opportunity costs from lost customers. These figures highlight the importance of creating measures to capture these changes. Worse still, the permission provided for contact may change through time, since you will have asked different questions about how personal data will be used to market to the customer. Options for managing this change include:

• periodic checks by call centre staff and at other touchpoints
• a 'change personal details' option on the web site (this is required by data protection laws in some countries)
• e-mail or telesales campaigns aimed at updating data (Case study 4.1 shows how this process works).

Software designed specifically for cleaning a list is Winpure (www.winpure.com), although many ESPs also contain this capability.

Note though, that changing e-mail address seems to have stabilized more recently. The

Doubleclick Sixth Annual Consumer E-mail Survey(Doubleclick, 2005) showed that, when asked how long they had maintained their e-mail addresses, most consumers had kept the same address for four to six years. Nearly two-thirds of consumers had never changed their e-mail address.

The survey (Doubleclick, 2005) also showed that almost half of all consumers reported maintaining at least three e-mail accounts — an increase from 2004. Nearly 95 per cent considered one of their e-mail addresses to be a 'primary' account; 72 per cent used a single address specifically for making purchases. This shows the importance of gaining the primary e-mail address for opt-in, particularly for an e-newsletter. To help with this, make sure you explain the proposition in detail and give examples of previous e-newsletters. If the frequency is relatively low, this may also help with gaining the primary e-mail address.

Inbound e-mail is all incoming e-mail to the organization. This includes bounces but also managing e-mail enquiries from customers. There are two conflicting concerns in managing inbound enquiry or support e-mails that will of effectively answering queries from customers whose support query may refer to a combination of online or offline activities. Multi-skilling also reduces hand-offs, and can increase variety for contact-centre staff.

Balance between automation and manual processes.Automated responses, intelligent routing and autosuggestion are all techniques, described in the next section, which can be used to reduce the number of queries handled by human operators. If the automated approach fails, however, then inappropriate responses may be received by customers.

Insourcing or outsourcing. Software, hardware and staff can be deployed internally or outsourced to an application service provider, who will work according to a service-level agreement to achieve quality standards.

02 AND THE GENIE INTERNET PORTAL

In order to set the context for this case study, it is important to bear in mind that mobile phones now have a 60 per cent market penetration in the UK, and usage increased by over 1,500 per cent between 2000 and 2002. The rate of industry growth and product innovation therefore has been — and continues to be — phenomenal.

02 is the holding company for the BT division formally known as Cellnet. It began trading in November 2001 and has 100 per cent ownership of mobile network operators in four countries:

* the UK (BT Cellnet);

* Germany (Viag Interkom);

* the Netherlands (Telfort Mobiel);

* Ireland (Digifone).

Additionally, 02 has operations on the Isle of Man (Manx Telecom) and a leading European mobile internet portal business, Genie (www.genie.co.uk). 02 was the first company in the world to launch and roll out a commercial GP RS (or `2.5G') network, and has secured third-generation mobile telephony (`3G') licences in the UK, the Netherlands and Germany. The company expects to apply for a 3G licence in Ireland when the application process commences. 02 has approximately 17 million customers and some 15,000 employees, with revenues for the year ended 31 March 2001 of £3.2 billion. Data now represents over 10 per cent of 02 service revenues and, with the recent launch of new devices and services as well as future developments, it is expected to increase to 25 per cent contribution within three years.

In January 2002, 02 announced that it had signed a group-wide agreement with Handspring to distribute and market Handspring's Treo family of compact wireless communicators throughout 02's operating businesses. Handspring is a leading innovator in personal communication and handheld computing. Targeted principally at the mobile professional and SM E markets, Treo is the first integrated Palm OS wireless communicator product to be launched on 02 networks, providing customers with a pocket-sized solution for combined voice and data services. With telephone, organizer, Web and messaging applications combined in a small and lightweight device, Treo will initially take advantage of 02's broad GSM networks, but will upgrade to GPRS upon availability of GPRS software.

The company is now in the process of rebranding its consumer services, which will trade under the 02 banner from spring 2002. An extensive advertising campaign encompassing both digital and traditional channels and rumoured to be costing £150 million is currently at the planning stage. Agency Republic has been appointed to manage the 02 brand across the web, mobile phones and interactive television, and digital advertising is to be fundamental to the rebranding campaign. Traditional advertising has not been forgotten — on the significant date of 2 February 2002 (020202), double-page spreads in the UK quality press kick-started the rebranding exercise.

Emerging e-Marketplaces

In its traditional sense, a 'marketplace' allows information to be disseminated and activity between buyers and suppliers to be co-ordinated. Before the slump in 2000, many firms took a huge 'leap of faith', investing large sums of money into new forms of technology and the associated business practices, without always fully realizing the implications of doing so. In the B2B electronic marketplace arena in particular, new exchanges appeared overnight, and from a peak of some 8,000 the inevitable shake-out reduced the number to about 2,000 in early 2002 (according to www.ebusiness.uk.corn, February 2002). The e-Marketplace industry is therefore only just beginning to evolve, and a wealth of confusion currently exists as to the optimal strategy for companies to adopt. Many commentators see it as the next wave of the IT/information revolution.

The division of markets by spatial competition is now evaporating because of the scalability and virtual geographical nature of the Internet. The emergence of B2B e-Marketplaces is leading to more open collaboration among buyers and suppliers, and the rise in information-based products and services on the Internet has led to the circumvention of traditional intermediary business and information brokers. As evidenced by the travel industry, traditional market structures are being transformed and are giving rise to new forms of intermediaries and business models. With the introduction of new technologies that take advantage of this e-Marketplace phenomenon, markets can perform transactions on a glob scale, and thus grow exponentially.

Some of the most notable early impacts on market structure have been i the financial services industry, where online brokerage services such as E*Trad have stolen market share away from many of the established brokerage firm such as Goldman Sachs. Each user of E*Trade benefits from a larger network, since online booking enables a larger number of transactions to be made. It facilitates the exchange of 'investor tips' and the usage of discussion forums on the membership Web pages. As a result, more and more traders are willing to in the E*Trade 'community' and thus use the E*Trade platform for trading. An optimum e-Marketplace entry strategy must take into consideration a umber of factors:

• the estimated lifespan of the market;
• the degree of change required to existing business processes;
• the costs of imitating the pioneer;
• the extent of financial resources available;
• the likely cost of customer acquisition.

At present, despite the ongoing shake-out, many marketplaces are striving each critical mass. The initial focus has been on transactions, with only a -term view taken towards collaboration. Some, particularly independent marketplaces such as Chemdex (chemicals) and Opitmark (equities), have already been forced to close down. Transactions are limited and costly at this stage, and there is little incentive for many industry participants to take advantage of what is currently available. Moreover, creating an online catalogue remains complex process, and the willingness of many companies to use marketplaces a medium of exchange has been less than enthusiastic. Some prefer to keep prices confidential and negotiate closely with their customers. In addition, most of the FTSE 100 and Fortune 500 companies are locked in to existing electronic technologies such as EDI, which represents an expensive point-to-point trading network.

Despite current low usage levels, the potential for e-Marketplaces is evidenced by many recent studies. For example in a research report conducted by Forrester Research (2001), more than 75 per cent of companies envisaged trading online by 2004, and at least 50 per cent expect to participate in four or more e- Marketplaces by 2004. According to Durlacher (2000), B2B e-Commerce is estimated to account for almost 20 per cent of GDP in the UK and approximately 12 per cent of GDP in all of Europe by 2004. Forrester Research (2001) notes that while industries are moving at different speeds in order to take advantage of B2B initiatives, the automobile industry is leading the way with a forecast spend of almost 200,000 million euros by 2005. For example, Covisint, owned by Ford Motor Co., DaimlerChrysler AG, General Motors Corp., Renault SA, Nissan Motor Co., Commerce One Inc. and Oracle, plans to reduce supply chain costs and bring efficiencies to its owners' business operations. As a result, many B2B e-Marketplaces are incorporating a variety of value-added services in their offering in order to attract participants and differentiate themselves from competitors, and thus create a sustainable revenue model that is also profitable. These services vary across different industries and products, but some of the most common features include:

• auctioning;
• collaborative planning, forecasting and replenishment (CPFR);
• improved knowledge management, reporting and visibility;
• e-Procurement;
• supply-chain management;
• e-Logistics services.