Business mentor: Email can be a powerful marketing tool

Q: In just a few years we've built our customer base to more than 5000, with people buying through our retail stores and online through our website. Now we want to expand our market throughout the world. We have a limited budget but some ambitious plans. Can you help?

Small business sector specialist Sarah Trotman spoke to Jeff Mann, managing director of Smartmail, for advice:

A: Have you thought of email marketing? It is now proving its worth as a powerful marketing communications tool - and it's very cost effective.

In fact, for many businesses, email marketing is now a central component of their overall marketing mix. Regular dialogue with customers far and wide is now no longer the domain of big companies with big budgets - email marketing allows high-quality communications at a fraction of the cost of traditional marketing.

Don't get email marketing confused with spam. They're not one and the same thing.

Email marketing is permission-based. Simple as that. Spam is not. Think of your letterbox. You have a relationship with your bank and airline and want to hear from them. But unsolicited flyers head straight for the bin - they are unasked and are spam.

The success of this medium is based on the relationship you and your customers have. The customer has as much control over what you send them as you do.

So how does email marketing work?

You can send personalised emails that have the feel and appearance of your website or even one of your brochures - but are a lot more intelligent. Any good email marketing software package will allow you to access an array of features such as tracking on open rates, click-throughs, bounce-backs, refer a friend, uploading photos and survey/response forms.

The secret of a great email marketing campaign is to be well mannered. Always offer your customer the opportunity to unsubscribe or allow them to make other choices about what you send them.

If you don't have their email addresses already then you will need to ask for them. Telemarketing with an incentive, say an invitation to an event or entry into a prize draw is probably the best way to obtain this permission. If this is too costly you might like to consider asking for their email address on your packaging.

The status of the prospects is a little "greyer". However, a one-off email inviting them to join your newsletter mailing list, again with an incentive, can work wonders. Tell them what to expect from newsletters: Sell the benefits!

The key to using email marketing is to provide information worth spreading.

We've found that creating a members club that provides exclusive benefits - for example, discounts, advance notice of promotions, free shipping deals or special gifts - is a great way to encourage readers to pay attention and crucially, to tell their friends.

What's most important is to respect your readers and the permission they have granted you. Keep in touch regularly with information that is relevant and worthwhile to them and you'll be surprised at how widely the word can spread. Many local businesses have the majority of their business coming from overseas, driven largely by email marketing.

* Jeff Mann is managing director of Jericho, the people behind SmartMail - an email marketing software agency that offers online email marketing services to many small to medium-sized New Zealand business. More information at smartmail.co.nz.