“Better start building your list ASAP.”
“What’s your top-performing campaign?”
“Must optimize for click-through and open rates!”
“Have you started segmenting?”
Confused yet? Dipping your toes into email marketing, whether as a business owner or marketer, can plunge you into an ocean of jargon and unfamiliar performance metrics.
But the reality is, email marketing is actually pretty simple.
Email marketing is about taking a communication channel we already rely on – the humble email account – and leveraging it for sales, branding, and community-building purposes.
What is Email Marketing and its benefits?
Email marketing is marketing to your customers via emails.
It takes a cue from its pre-digital age predecessor, direct-mail marketing. In the old days (and occasionally today), companies would send dozens of sales letters, catalogues, newsletters, or coupon books to customer’s physical mailboxes every week.
Each of these communications served a specific marketing goal. A sales letter asked you to send a check for the product, a catalogue, or coupon book enticed you to come into the store, and a newsletter shared behind-the-scenes updates to help you feel more connected to the brand.
There would be something eye-catching on the envelope to motivate you to open the mailer. Then the design and copy kept you reading until the end (if the marketer did his or her job right.)
A very similar dynamic now exists in the email marketing world. Companies still send sales pitches, coupon codes, product announcements, and newsletters directly to customers. Only now, most send them through – you guessed it – email.
Instead of a snazzy phrase on the envelope to inspire you to open it, email marketing relies on compelling subject lines.
Email is basically the digital version of direct mail. And it’s extremely powerful.
How Does Email Marketing Work?
Email marketing can take many forms. However, the birds-eye view of how email marketing works is the following:
1. First, a company convinces customers to provide their email addresses & permission to send marketing emails to them.
2. Next, the company sends a welcome email. This email is meant to set expectations for what’s to come and solidify the tone of their email marketing.
3. Finally, the company begins sending each subscriber their regular marketing emails. The content, frequency, and structure of marketing emails depend on the company’s goals.
Many service-based businesses send helpful, in-depth content related to their service (much like blog articles), which are designed to establish the company as a reliable authority in their industry. Other types of businesses, such as e-commerce companies, send promotional emails announcing a new product launch or sale.
The content of your email marketing will depend on what you’re trying to accomplish.
Email Marketing is Extremely Powerful (The Proof)
Email marketing works because it taps into a key way that a huge chunk of the people communicates with one another. Email is what we like to call the communication backbone of the internet.
Just check out these statistics:
- About 293 BILLION emails were sent in 2019, and that number is expected to increase by 50 billion by 2023.
- More than half of all people report checking their email first thing in the morning–before text messages, phone calls, or social media.
- In 2019, there were 3.9 BILLION active email users, compared to just 330 million Twitter users or 1 billion Instagram users.
On an anecdotal level, because email is so embedded in our daily communications, it feels more intimate than a social media blast or digital ad. With email, communication is one-to-one.
Plus, once you’re reading an email, it’s the only thing on your screen. There’s less of an urge to “scroll away” than there is on social media.
Finally, email marketing works because it’s all about building and maintaining relationships with customers.
Every email you send to a customer, even the transactional emails (like order confirmations), is an opportunity to speak directly to your customer. In addition, customers can often reply to emails directly. This isn’t something you get with other marketing channels.
“Buy This”, “Buy That”, “Buy it Now”…
Is this your email marketing strategy?
Email is all about growing relationships.
You need to offer VALUE. Relationships involve more than asking people to “BUY”.
— Alec Beglarian (@alecbee) January 24, 2020
Why Every Business Needs Email Marketing…
The beauty of email marketing is that it has the potential to be effective for every type of company, with every type of target market. Because email use doesn’t skew heavily toward a particular demographic, every company can trust that they can reach their target market through email.
But the power of email marketing goes far beyond that.
Email Marketing Has a Huge, Proven ROI
Forget aiming to 10X your investment.
Why not go for 40X with email marketing?
For every $1 the average business spends on email marketing, they generate $40 in revenue.
If that isn’t enough to convince you, compare this to the typical ROI of other marketing tactics. Spending $1 on the following marketing tactics gets you:
- SEO: $22
- Search engine keyword ads: $17
- Catalogs: $7
- Banner ads: $2
Did you notice that email marketing’s ROI is almost twice that of the top runner-up?
Pretty crazy, right?
Your Email List Is 100% Controlled by You (Not a Third Party)
Remember how we said that email marketing is the digital age twin of direct mail marketing? With direct marketing, you can trust that if you snail-mail a catalog to your list of addresses, it will arrive in the mailboxes of the recipients. Most likely, each recipient will see it.
The same is true for email marketing.
— But the same is not true for most other forms of digital marketing.
With social media marketing, you don’t control how your content is delivered to your followers–or if it even is delivered at all. You’re subject to the rules and algorithms of the platform.
Segmenting allows you to tailor content for different subscribers
Email segmentation is when you categorize your subscribers based on past behaviors, and send specialized messages to each group.
Common segments are:
- Subscribers who have never purchased anything
- Subscribers who have recently purchased
- Subscribers who attended a webinar
- Subscribers who have not opened your emails in a while
- Subscribers who left unpurchased items in their cart
Let’s look a little closer at that last one to illustrate how segmentation works. Abandoned cart emails are the most familiar form of email segmentation, especially for e-commerce.
The concept of segmentation often follows an “if this, then that” pattern. For example: “If someone adds an item to their cart and exits the website before checking out, then they get added to the ‘abandoned cart’ email sequence.”
The power of segmentation is evident in the comparably high average open rates of abandoned cart emails: 41%, compared to an overall average of 15-25%. When your message can be tailored for a specific group, it’s more likely to feel relevant for them, leading to higher conversion rates.
Speaking of which…
Email marketing is better for conversions
The average click-through rate (the percentage of people who click on a link, such as “buy now”) for email is considerably higher than for other marketing tactics.
According to MailChimp, the average click-through rate for email across all industries is 2.62%, and for some industries, it averages as high as 5%. Meanwhile, the average click-through rate for Facebook ads is only 0.9%, and for search engine ads, it’s only 1.91%.
Not only are the click-through rates better for email marketing, but you also don’t have to pay for each of those clicks. For paid social media or search ads, you typically have to pay per click (averaging $1.72/click for Facebook and $2.32/click for search).
You can take email subscribers through every stage of their customer journey
With email marketing, you can more or less control the order in which subscribers see your emails. This means you can effectively lead a customer through the customer journey (also known as the “stages of awareness”).
The customer journey includes the following stages:
- Learning about the company
- Engaging with the company
- Purchasing from the company
- Being consistently in contact with the company
- Becoming a loyal fan
In practice, this might look like sending educational and brand-awareness emails to new subscribers, then asking for responses/replies, then sending a promotional email.
What’s more, for every email you send, you can tell if your subscriber opened it. If they didn’t, then you know to send another email in that buying stage instead of moving on to the next one.
Email marketing, therefore, allows you to market to your customers wherever they are in their customer journey, rather than blindly marketing to the masses.
Email Marketing use cases for startups:
1. To Find Customers
2. To Engage Customers
3. To Retain Customers
4. To Generate Revenue
— Alec Beglarian (@alecbee) December 17, 2019
How to use email marketing
To get you started with email marketing for your business, we’ve put together a helpful list of ways different companies use email marketing. No matter what type of business you run, you’ll be able to find inspiration here.
E-commerce companies can benefit from an email marketing strategy that drives consistent and repeat sales from their website.
If you’ve ever been offered a dessert menu after dinner at a restaurant, then you’re familiar with the concept (and the appeal) of upsells. Upselling is when you attempt to sell an additional product or more expensive version of a product someone is currently buying.
Upsell emails are particularly effective for e-commerce stores. When someone makes a purchase, you send them an email suggesting other products they might like. Or, you send an email suggesting they upgrade their current purchase to a monthly subscription or to a more expensive version.
Like a server offering dessert, when done right, upsell emails feel thoughtful rather than pushy. For example, this email from Wayfair upsells “trending now” items in a casual way:
New product launches
How better to announce a new product than in a direct-to-the-customer email?
New product launch emails serve both to drive awareness and sales of the new product and to update customers on your growing business. This email from Uncommon Goods announces the addition of a brand new product, birth month wine glasses:
Referrals and loyalty programs
Many e-commerce stores use loyalty or referral programs to generate goodwill with existing customers and acquire new customers. Email marketing can be an effective way to get top customers (targeted via email segmentation) to sign up for such programs and refer others to your store.
For example, Winc sends out emails that encourage subscribers to get their friends and family to order, via their referral program:
As we talked about earlier in this article, cart abandonment emails have some of the highest open rates. When a customer exits your store with unpurchased items in their cart, the best way to remind them (or convince them) to buy is through email. Email is the best way to directly reach such a customer.
Savage X Fenty sends out a simple email for cart abandonments–with a powerful incentive to complete your checkout:
SaaS companies benefit from an email marketing strategy that’s built around helping potential customers overcome hesitations and understand a complex product.
Welcome emails establish the tone for an email list, help subscribers feel like they made the right decision by signing up, and encourage customers to start using the software. Mailchimp sends out this welcome email to new subscribers, which includes helpful information to get started with the software:
Onboarding and education
SaaS customers may eventually cancel their subscription to the software if they never figured out how to use it properly. Emails that guide new customers through setting up and getting the most out of the software can help eliminate this churn.
For example, Superhuman sends a series of emails for 14 days guiding how to use its different features.
Promotional or upgrade email
For SaaS companies that offer a premium or paid version of the software, the upgrade email is an important email marketing tactic. The upgrade email targets users of the free or basic version of the software and explains how the higher tier version would benefit the user.
For example, this email from Grammarly lays out the difference between the Free & Premium version. There is even an incentive to upgrade with the 40% discount offer.
Courses, books, and educational resource brands
Brands or individuals who have an information product like a course, book, or resource can use email marketing to fill their launches and pre-orders.
Pre-launch emails are sent out in the months and weeks leading up to a book or course launch. The goal is to make the audience aware of the launch, get them excited, and likely even start pre-selling.
Foundr sends this pre-launch email to say that they are launching something for the audience & even includes a survey link to make the audience feel a part of the launch.
When an information product is finally for sale, brands can use email marketing to announce it to their audience. Sales emails also make it easy for their audience to buy the product because you can include a link to purchase within the email. Author Cat Johnson announced that her book Hot Chick for Hire was on-sale in an email to her list:
The intimate, two-way nature of email makes it the perfect channel to request a review from customers who have already bought the resource. Author Glenn Fisher sends the following email to all his subscribers, asking them to either buy the book, or if they already bought it, to review it.
Nonprofits can use email marketing to drive donations and share their mission with their supporters.
A donation request email persuades subscribers to make a donation. Often, the most successful donation request emails tie the call for donations to a specific cause, project, or goal. The nonprofit The Dog Cafe LA sent this call for donations out to subscribers. As you can see, a donation request does not always have to be monetary but may include requests for items.
To keep donors, supporters, and volunteers engaged throughout the year, nonprofits can use email to share progress updates. When supporters are kept informed as the nonprofit works toward its goal, a stronger sense of connection is formed, and they’ll be more likely to donate again later.
An updates email can take the form of a newsletter, like the following email from Goodwill Southern California:
The thank-you email may be the most important email of all! This email personally thanks a donor for their gift. A thank-you email can serve as more than just a receipt for tax purposes; it can make the recipient feel good and confident about his or her decision to donate.
charity: water sends out this thank-you email to donors, which reiterates why the work the nonprofit does is important:
Events companies use email marketing to drive ticket sales and get attendees excited about the upcoming event.
Promotional emails that build interest around an upcoming event serve two functions: 1) to drive sales and 2) to prepare attendees for the event. Usually, promotional emails include a call to action to buy tickets for the event.
For example, the following email from Mindvalley highlights their upcoming online event & encourages people to learn more about it on their sales page.
Announce on-sale tickets
A strategic sales email can sell-out your event the day tickets go on sale. Especially if you’ve been selling pre-sale tickets, the official “on-sale” day can include a sense of urgency. For example, the following email for a blogging workshop highlights that sense of urgency:
Affiliate marketing for events works by inviting certain attendees to bring paid guests and sharing a percentage of those ticket sales with them. Affiliate marketing can increase event attendance and lower the marketing burden for the company. Use email to send an invitation for certain attendees to be affiliates.
Creative Successful Entrepreneurs sends an affiliate marketing email like the one below to increase event attendance:
We’re guessing you’re already doing some type of marketing for your business…but if you’re not yet leveraging email marketing, you’re missing out on a big opportunity.
Email marketing can help businesses develop stronger relationships with customers, stay top of mind for repeat sales, sell-outsell out launches, and much more. Plus, the flexibility and versatility of email marketing mean that you can tailor it for your customers and marketing goals–whoever and whatever they are.