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E-mail Marketing:
Flash in the Pan or Replacement Technology?

by Rosalind Resnick, president of NetCreations, Inc.
Web Marketing Today, Issue 45, June 1, 1998

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This article contains older information. Go here for newer information on e-mail marketing.

In April, the American Management Association made a startling announcement: E-mail has eclipsed the phone as the primary business communications tool for 36 percent of the over 400 human resources executives who attended the AMA's recent conference in New York City. Twenty-six percent said they used the phone most frequently, and only 15 percent favored face-to-face meetings.

The consumer market will be quick to follow. Forrester Research predicts that nearly half the U.S. population, or 135 million people, will communicate via e-mail by 2001. More than 3 billion "permitted" (opt-in) commercial e-mail messages were mailed out in 1997, Forrester estimates, and this number will grow to 250 billion by 2002, creating a $1 billion market in just four years.

So here's the question: Will e-mail marketing remain an alternative medium like card decks or package inserts, or will it emerge as the replacement technology that one day makes postal mail and telemarketing obsolete?

I'm placing my bet on the second scenario, and here's why:

1. E-mail cuts the post office and the phone company out of the action.

The biggest reason why e-mail will triumph over postal mail and telemarketing is because it's cheaper. Much of the cost of postal mail is not lists or lettershop services but stamps, and I doubt that the U.S. Postal Service, Federal Express or United Parcel Service are going to start giving away its services for free. Likewise, telemarketing requires paying metered access fees to the local or long-distance phone company -- another old-line industry that will no doubt cling to its lucrative business model until the bitter end. E-mail, by contrast, is cheap and unregulated -- at least, as long as the Net-friendly Clinton Administration is in power. There are no Net taxes, and any mailer with a dial-up Internet connection can pump out all the e-mail he wants at no charge. Sure, there are e-mail list brokers and lettershops, but the cost of sending an e-mail message -- especially if you mail to your own e-mail house file -- is essentially free.

2. E-mail speeds up mailing and delivery times.

No slower technology has ever triumphed over a faster one -- not in this country, at least. Sure, a handful of commuters still ride Amtrak trains along the Northeast corridor, but rail travel is all but dead in this country, replaced by the car and the plane. Why will marketers continue to spend weeks or even months laboring over postal mail campaigns when they can upload a message to a list of e-mail addresses and send it out the same day?

3. E-mail links response to transactions.

No matter how compelling your catalog or pitch letter may be, the consumer still has to pick up a pen and fill out a form or pick up the phone and make a call. With e-mail, recipients simply click on a link embedded in a message and instantly go to the marketer's Web site where they can browse and buy. Not only that, but it's all automatically trackable through the Web site's server logs -- without the need for live operators to staff the phones.

4. E-mail lets consumers run the show.

Finally, and most importantly, e-mail will win out because it puts the consumer in charge of the marketing relationship. You don't need to be a market researcher to see that the one-to-one future is already here and that consumers are fed up with the many privacy invasions that the direct marketing industry has inflicted on them. Trouble is, there's no easy way to "opt in" to get the postal mail of your choice; all you can do is "opt out" when you've had your fill. With e-mail, by contrast, opting in is as easy as going to your favorite catalog's Web site, clicking a box, and typing in your e-mail address. Or you can opt in to receive targeted commercial messages from a variety of e-mail marketing services such as our PostMaster Direct Response service, BonusMail, MyPoints, DeliverE and others.

Now, I'm not predicting that e-mail will take over the marketplace next year or even the year after that. But I can assure you that the e-mail revolution is coming and that it is going to cannibalize much of the postal mail and telemarketing business that exists today. Just like the car replaced the horse and the PC replaced the mainframe, e-mail marketing will replace postal mail and telemarketing because it is cheaper, faster and more scalable.

Case in point: Leading computer magazine publishers are switching to e-mail for their prospecting and renewal campaigns, in many cases scaling back their postal and telemarketing efforts in the process. Consumer magazine publishers and cataloguers will surely follow suit once they get a critical mass of e-mail addresses on their subscriber files.

What should the direct marketing industry do? My advice is to beat the market to the punch -- to cannibalize your own business before the marketplace does it for you. Encourage your clients to start collecting e-mail addresses. Start managing and brokering e-mail lists. Hire some Net-savvy sales people. Launch an electronic lettershop. Or partner with a company that can do these things for you.

But, above all, start now. Once the revolution comes, there won't be any place to hide.

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Rosalind Resnick is the president of NetCreations, Inc., a New York Internet marketing company that operates the PostMaster Direct Response opt-in e-mail marketing service. She can be reached via e-mail at rosalind@netcreations.com or through her website at http://www.postmasterdirect.com/

Read more articles from Web Marketing Today, Issue 45, June 1, 1998