Bargains direct to your desktop

By DITA DE BONI

E-mail marketing may be new to New Zealand, but the debutante has had the first slot on her dance card filled by the country's largest retailer.

The Warehouse - with more than 100 bustling red barns turning over around $1 billion a year - signed on for its first serious stab at e-marketing this week.

While the company does considerable business-to-business online, and has a limited virtual storefront, its online direct marketing efforts have been less than flashy.

The contract to target the company's Gold Club members was settled on Tuesday with MessageMedia, an e-mail marketing business whose staff of five work from "Silicon Basin" on the Auckland waterfront.

Gold Club members are those who have brought pre-paid phones.

They can opt to receive e-mail from The Warehouse.

It is thought that more than 15,000 Gold Club members have chosen to receive the messages, which will be sent every three or four weeks. Since May 1999, more than 75,000 prepaid mobile phones have been sold.

MessageMedia, meanwhile, has won one of the biggest contracts in its four-month history.

The company is almost a senior in the fledgling domestic e-mail marketing scene. It is 20 per cent owned by NZ Post; other part-owners are Craig Heatley's e-Ventures and US namesake MessageMedia, which is listed on the Nasdaq index.

Although Warehouse founder Stephen Tindall is on the board of e-Ventures - and so indirectly related to the company - general manager Chris Price is keen for the world to know that MessageMedia won the contract to structure the retailer's e-mail marketing strategy on merit alone, a process that took three months of hard work.

"It wasn't easy - they were very tough," says Mr Price, who is clearly relieved the pitch process is over. "And yes, we did crack a few bottles of champagne when we heard we had got it."

The Warehouse is MessageMedia's first big client, but it is quick to point out that it is talking to other large companies - which, it says, it cannot name - and NZ Post is reportedly keen to jump into the cyber communications realm using the company's marketing tools.

"The market is moving very quickly, and it is hungry for information on ways to best utilise e-mail to create relationships," says Mr Price.

"It's still very small, but growing."

The MessageMedia crew license their software to a company for $2500, then charge it by the number of messages sent and the amount of information stored on its server - a common pricing system, says Mr Price.

The Warehouse's e-mail marketing catchment group is entirely specific. People who buy pre-paid phones can choose whether to give their e-mail address.

Those who do are sent messages asking if they want to join the e-marketing list.

Using the MessageMedia server, The Warehouse then sends an "offers and promotions" message roughly once a month.

MessageMedia and The Warehouse say they are keen that customers are fairly solicited for the service, and can opt out easily.

Every message a customer is sent has an opt-out link.

The Warehouse has used e-mail marketing before, but the previous campaign was contracted out, and messages were transmitted as text only.

It can now use its own creative and marketing people to structure the campaign, using the tools provided by MessageMedia.

The e-mails can contain corporate brand colours and graphics.

But do these brightly coloured messages still have the capacity to become pesky?

Mr Price agrees that anything can be a nuisance if not handled well.

"But The Warehouse has a broad base of consumers it wants to reach, and in a way it's the first cab off the rank with e-mail marketing."

The company wanted the campaign to be "permission-based," and had said it wanted to offer only relevant promotions and offers.

Inevitably, however, the messages sent to the mobile-owning customers consumers will extend beyond things related to the phone. They have already gone there, using the channel recently to plug rugby player Jeff Wilson's autobiography.

The Warehouse reportedly tested its strategy of introducing phone customers to other merchandise before expanding the campaign to cover the whole country.

Have companies shied away from e-mail marketing in an environment where dotcoms are struggling? Unsurprisingly perhaps, Mr Price says no. He says that at the e-mail marketing awards in the US, which he attended recently, the head of one e-commerce portal told him that dotcoms were being forced into using e-mail because they could not get extra money for conventional advertising campaigns.

"People want cost-effective marketing, cheaper, better and faster. E-mail fits the bill."