Subject: Romancing the Customer via E-mail

From: Chief Marketer <[email-masked]>
Date: Tue, 15 Feb 2005 09:10:00 -0600

February 15, 2005 | A PRIMEDIA Property |

Table of Contents
E-mail Marketing: Romancing the Customer
Demographic Targeting Part 1: Parents Just Say No
Demographic Targeting Part 2: Parsing the Online Youth Market
Product Placement: FTC Says Disclosure Is Unnecessary
TV: A New Channel for Sharper Image
Branding: Van Heusen, L'Oreal Don't Get No Respect

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This Week's Stories
E-mail Marketing: Romancing the Customer
Sure, Valentine's Day has come and gone, but every day is a good day to romance your customer base. Chris Baggott, chief marketing officer of e-mail services provider ExactTarget, detailed five ways to "bring love to your customers"--and of course, encourage them to love you back:

1) Treat them special. Woo buyers as you would a boyfriend or girlfriend. "If this were a potential spouse you would find out everything you could about what they like and don't like, then you would weave that into your conversations," Baggott says. For instance, "if he loves football, you would try to learn something about the game." Likewise, tailor your e-mail messages to customers' interests and preferences.

2) Be human. "People don't fall in love with institutions, and they are not inclined to fall in love with a brand," Baggott says. Personalizing the "from" line of your e-mail messages is one way to show the human face of your company.

3) Don't smother. Don't bombard customers with messages. Ideally you should ask them how frequently they'd like to receive e-mail from your company and respond accordingly.

4) Acknowledge when you make a mistake.

5) Know when it's over.

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Demographic Targeting Part 1: Parents Just Say No
By Andrew Grossman
Companies that thought they could make hay selling clothing and video games to teens online may want to think about floating them a loan instead, judging from the results of a Harris Interactive YouthPulse survey of 2,148 people 8-21 years old.

And if you want to reach the tween set, you should target your media messages as much to parents as to the youngsters themselves. That's because slightly more than half of the 12-and-under crowd said that they'd had to abandon a purchase because of parental interference, by far the number-one reason for shopping-cart abandonment among that age group. In comparison, 27% of the older kids said their parents had forced them to abandon an online purchase. The top reasons teens cited for aborting an online sale were an aversion to paying shipping costs (45%) and the age-old teenager's complaint: They were broke (42%).

Teens and tweens pumped $22 billion into online retailers' pockets last year, which represented 16% of their total spending, but little of that money came from the preteens, according to Harris. Those kids spent an average of $218 a year, compared with $866 for 13- to 15-year-olds, $682 for 16- and 17-year-olds, and $1,330 for the college-age sample. Harris analysts believe that online spending declines among older high-school students because they enjoy the social aspects of shopping at malls with their friends. That preference ends once they get to college or enter the work force, they added.

But here's some good news for multichannel merchants: The survey reports that young consumers spend $20 billion a year on shopping sprees that they initially researched online.

What's a Web merchant to do? Harris analysts suggest it's a mistake to try to ape the social allure of the food court. Instead, marketers should find their own ways to make shopping online as much fun as boy-watching, girl-chasing, and eating pizza.

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Demographic Targeting Part 2: Parsing the Online Youth Market
By Andrew Grossman
The Harris Interactive survey detailing the online shopping habits of 8- to 21-year-olds (see "Demographic Targeting Part 1: Parents Just Say No," above) failed to surprise to James Chung. The president of Reach Advisors, a Boston-based strategy and research firm that focuses on lifestyle-driven industries, Chung spoke with CHIEF MARKETER about the youth market and e-commerce:

CHIEF MARKETER: The Harris Interactive survey suggested a disparity among kids who shop online, with tweens the least likely and college-age people the most likely to do so.

Chung: It doesn't surprise me at all. We've actually done a lot of studies, and there does seem to be a peak at high school. There's a natural cognitive factor that's limiting the growth of Internet usage among tweens. They are still trying to develop friendships and a sense of who they are in the physical world vs. teenagers.

CHIEF MARKETER: How much does the social aspect of shopping at a bricks-and-mortar store vs. the isolation of the Internet play into the trend?

Chung: The 18- to 21-year-old population has money to spend in college at that point. They are less likely to have cars and more likely to be wrapped up in social life on campus. The social aspect among teens is critical. Shopping online is not a social event vs. shopping in the real world at a mall.

CHIEF MARKETER: The Harris survey reported that one of the biggest factors that discourage teens from shopping online is shipping costs. Did that surprise you?

Chung: That sort of caught me out of the blue. Shipping costs are a little bit out of hand, which is why Amazon offers free shipping [for purchases] over $25. The issue of not having any means to pay goes back to [parents taking control of their kids' lives]. Five years ago parents would not hesitate to give them a credit card and say, "Go charge it." It was part of the culture in raising kids. That's less of a case now. It's now a case of parents trying to take back a little more control over their children's lives. The average age of getting access to credit cards is no longer dropping.

CHIEF MARKETER: What accounts for the popularity of auction sites among teens?

Chung: You have to speculate whether it's just with that group or refers to the population at large. Assuming it's an important factor with that group I'd say the pricing factor [is critical]. If you take a look at the average online sales price vs. the retail price it's half off. So the budget is one issue. The second thing is the particular appeal of online auctions in that they made [shopping] to some extent entertaining. It's a fun way for people to engage online.

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Product Placement: FTC Says Disclosure Is Unnecessary
PROMO XTRA
The Federal Trade Commission has deemed it unnecessary to let viewers know that product placement in television shows may have been paid for and could be considered an "advertisement." But it did say that the commission will continue its policy of evaluating on a case-by-case basis whether an advertising format or specific product placement is deceptive or likely to cause consumer injury.

The FTC's ruling came after consumer watchdog group Commercial Alert asked for an investigation into whether product placement was deceiving and blurred the lines between advertising and programming. A letter to the FTC dated Sept. 30, 2003, from Commercial Alert executive director Gary Ruskin also stated that the appearance of products placed in programming is implicated in diseases such as obesity and Type 2 diabetes in children.

Ruskin asked that guidelines be established requiring adequate disclosure of TV product placement including the inclusion of the prominent superscript "ADVERTISEMENT."

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TV: A New Channel for Sharper Image
By Margery Weinstein
CATALOG AGE
Think you have all the available marketing channels covered? Think again. The Web, 149 stores, and 85 million catalogs annually aren't enough for San Francisco-based high-tech gifts marketer Sharper Image Corp. On Feb. 2 the company launched its own interactive shopping television channel, Sharper Image ITV.

Broadcast on satellite TV programming provider DISH Network, Sharper Image ITV will feature 25 best-selling Sharper Image products, such as its line of Ionic Breeze silent air purifiers, the iJoy Turbo 2 Massage Chair, and the Emergency Radio/Spotlight. Viewers can make purchases via their DISH remote control rather than having to pick up the phone or head to the Website. According to DISH spokesperson Kelley Baca, Sharper Image ITV is the first channel in the U.S. to offer purchasing via remote control.

"Much like e-commerce," notes Sharper Image senior vice president of marketing Roger Bensinger, "interactive TV shopping is available 24/7, and you don't have to get off your couch to do it."

To read more, visit CATALOG AGE.

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Branding: Van Heusen, L'Oreal Don't Get No Respect
If you're looking for a corporate Website that commands respect, you can't go wrong with those of Nike and Gillette. On the other hand, the sites of Van Heusen and L'Oreal command little respect among consumers, according to the Boston-based Customer Respect Group.

In its First Quarter 2005 Online Customer Respect Study of the country's largest consumer firms, the consulting firm interviewed adult Web users and analyzed more than 2,000 corporate Websites to determine the attributes that create the online customer experience and measure a company's "customer respect."

The attributes are simplicity (ease of navigation), responsiveness, privacy, attitude (customer focus of the site), transparency (open and honest policies), and principles.

Among the companies ranked, Nike scored the highest, with a customer respect index (CRI) of 7.9. The average CRI of its market sector, apparel, was 6.3. Van Heusen scored the lowest, with a 3.0.

In the furniture sector, Steelcase was number one (CRI of 7.0), and Herman Miller brought up the rear (5.8). Gillette headed the household and personal products sector with a CRI of 7.7, while L'Oreal ranked last in the segment with 3.9.

Among other findings:
* 37% of the firms did not respond consistently or at all to online inquiries. Only 36% of all inquiries were answered within a day.
* 97% of the Websites have privacy policies in place explaining how they use customers' personal data.
* 86% use cookie technology, but of those, only 10% explain the advantage of cookies and the data they hold.

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