The VP of marketing of this email marketing service provider gives examples of innovative use of email, and points out common mistakes.

Loren McDonald is VP of marketing for EmailLabs, an email marketing solutions company named a top 10 email marketing service provider by Jupiter Research in 2003. McDonald is responsible for all customer touch points, including messaging and positioning, lead generation, advertising, PR and customer communications. He was previously founder and president of Intevation, an emarketing services firm specializing in email and search engine marketing. We talked with McDonald recently to get his views on the state of the email Industry. Read the first part of the conversation here.

iMedia: What's the most innovative use of email you've seen?

McDonald: Well in general some of the more innovative and cool uses of email are coming from small agencies that specialize in email and online marketing. Their clients are constantly being pressed by their clients to increase the ROI of their programs and thus are leveraging the full capabilities that email has to offer. A couple of examples:

• A residential real estate industry-related client is sending emails to subscribers with listings of recently sold homes in their area, based on the zip codes of the subscriber.

• An agency client is serving up multi-level personalized emails to customers of auto dealerships. The emails are auto service follow-ups and reminders that deliver personally relevant offers to the car owner based on the year, model, most recent service, mileage, et cetera of the car.

• Another agency client manages a birthday club program for a large entertainment company. Kids are sent birthday emails targeting products geared to the child’s specific gender and age group. Our system automatically calculates the child’s age based on their birth date, which then allows the age-based categorization. The mom’s of the children receive an email 30 and then three days in advance of the child’s birthday recommending the appropriate product for their child. Underpinning this is that many kids and their parents share the same email address. We created unique identifiers outside of the standard industry approach of using the email address. This enabled our client to send different emails to mom and each child in the household, even when they share the same email address.

iMedia: According to DoubleClick, the most significant findings from its latest Email Trend Report was the record purchase conversion rates for email in the quarter, as well as a changing significance in how marketers can measure and leverage certain performance metrics. Are these consistent with what you're seeing with your customers? Please explain.

McDonald: Well, first I always advise caution when drawing too many conclusions from statistics reported by email vendors (including us) and analysts. The statistics reported by email service providers in particular are handy benchmarks, but they generally aren’t apples to apples as the client base and emails being sent are constantly changing. So saying that X rates have gone up or down may be true, or it may be that much or all of the changes was due to changes in the sender population.

That being said, we are seeing email marketers becoming more sophisticated -- whether it is by integrating offline data and web analytics, increased segmentation and personalization, increased testing and more. The smart marketers are not worried about open rates, for example, and are completely focused on the interaction between clickthrough rates and conversion rates.

Obviously, one of the beauties of email marketing is its measurability and the ability to then immediately act on the metrics and individual actions. Marketers can conduct simple A/B split tests or multi-cell tests to part of their list and then 24 hours later send best performing creative to the rest of their list. Or they can set up trigger campaigns that automatically send follow-up emails to recipients that clicked specific links in an email, or perhaps didn’t open or click on the email. A simple example is one of our etail clients sending different emails (more aggressive and offer-oriented) to their customers that haven’t purchased in the last three to four months, with the intention of getting them to be more “active” purchasers again. The possibilities with email are almost unlimited; it just requires allocating the necessary resources.

iMedia: What's the biggest mistake you see clients making with their email marketing?

McDonald: Probably not taking advantage of the technology. Applications such as ours and our high-end competitors provide marketers with a very sophisticated set of tools to maximize the ROI from their email marketing program. But because email marketing is still so new to many organizations, they lack the resources, time or internal expertise to adequately take advantage of what the medium and technology tools enable. The analogy is that many companies are using high-performance vehicles capable of speeds of 150 miles per hour, but due to internal constraints, they rarely or never get their email vehicles over 55 miles per hour.

These tools include using an API (application programming interface) to synchronize data between customer databases and email marketing database, individual-based reporting, website and purchase tracking (the ability to pull website activity back into an individual's email profile), trigger-based emails (emails based on events, actions or profiles that are automatically triggered) and advanced segmentation and personalization functionality.

For our clients that lack the dedicated resources, we work with them to add sophistication to their programs in “chewable,” simple steps. For example, for one client that categorizes product preferences for only five percent of their subscriber base, we used our clickthrough link reporting tool to assign subscribers to a specific segment based on their history of clicking on links that went to any URL within different categories of their website. This approach immediately brought their segmentation up to 50 percent of their list. The client then implemented a very simple, but effective segmentation strategy by sending different versions of a core email with certain products, copy and the subject lines targeted to each segment. These simple steps resulted in a tremendous improvement in conversion, open and clickthrough rates.

iMedia: What's the most important thing email marketers need to know?

McDonald: What’s the “one thing”? That’s a tough one, but probably just that email marketing is different from most other forms of marketing. It is part technology and part marketing. It isn’t about blasting out messages until the ROI drops below a certain level. Email marketing is about permission, trust, building relationships, relevance and choice. Email subscribers feel very proprietary about their inboxes, a level of ownership that they don’t have or express with their mail boxes, televisions, billboards, et cetera. Email marketers must understand and come to grips with the idea that email is first and foremost a communications vehicle, not an advertising vehicle. Email recipients will reward those publishers and marketers that consistently provide personally relevant content, whether news, articles, tips or product offers and penalize those who simply “load and send.” Break recipient trust or lose relevance and your emails are toast and you’ve probably lost a customer/subscriber relationship forever.

iMedia: Anything else you want to share?

McDonald: Wel,l I’m obviously a bit biased, but despite the many perceived and real challenges in email marketing, I believe it is still the most exciting and most effective form of marketing yet. While search engine marketing is certainly hot, exciting and effective, email is perhaps the only marketing vehicle that provides a platform for the best attributes and strategies of marketing: permission, brand building, personalization, behavioral segmentation, testing, immediacy, detailed and actionable reporting, data and multi-channel integration, automation of activities -- and it is fun. Does it get any better than that?

Dawn Anfuso is editor of iMedia Connection.