From the July 2001 issue of Entrepreneur

Want your e-mail marketing messages to jump out of the inbox? Then try using rich e-mail. Featuring streaming video and audio, these minimovies are inspiring customers everywhere to click and watch.

"Our e-mails are 30-second commercials," explains Clelland Green, founder of America's Choice Health Plan, based in Philadelphia. "They're combinations of music and Flash presentations." Are the glitzy ads more effective? "We began using streaming e-mail last fall and had a 23 percent read rate; that's 6 to 8 times greater than a direct-mail campaign," says Green, 38. "Ten to 20 percent of those customers are [active customers], and our sales grew 78 percent from December to January."

MAIL STOP?
If you're primarily a B2C company with customers who have e-mail accounts at AOL, Hotmail or Yahoo!, you should know about a potential roadblock: These free Internet providers make it difficult for your customers to access rich e-mail. Many ISPs ask users to open a separate browser or cut and paste a new URL to access these media messages. Though most e-mail marketing companies don't charge for unopened messages, conversion rates will be lower if you can't get the message out to everyone on your list.

If you decide to launch a rich e-mail campaign, your best bet is to outsource the process to an e-mail marketing service (you can find dozens online). According to a 2000 study by Forrester Research, outsourcing produces higher conversion rates and is a better long-term investment than keeping your e-mail marketing operations in-house.

Including setup fees and delivery costs, outsourcing your first rich e-mail campaign can run you $20,000 to $40,000, depending on the volume and creative content. TMX Interactive, in Philadelphia, charged Green $25,000 to design and send two rich e-mail messages to 2,350 addresses.

While the industry average for standard e-mail advertising campaigns is 200,000 messages sent twice per month, rich e-mail messages like Green's are generally aimed at a more specific audience-so you'll likely send fewer of them. "We aren't spammers," says Green. "We sell B2B, and we only target multistate corporations."

According to Hans Peter Brondmo, who wrote The Eng@ged Customer: The New Rules of Internet Direct Marketing (HarperBusiness), creating a permission-based, targeted list is more effective than buying a random list, even if you're selling B2C. "So if you e-mail 10,000 people who've already expressed interest in your company, you're going to get a better response than if you e-mail 1 million [random] people."

To create a permission-based house list, first post a form on your Web site asking users to either opt in (check a box authorizing you to send them e-mail) or opt out (uncheck a box to not receive e-mail). Opt-out lists generally result in higher sign-up rates, because many users simply ignore the pre-checked box on the form. Opt-in lists are more effective, however, because those customers have chosen to receive e-mail from you.

Brondmo suggests putting specific demographic questions on your form, plus a privacy statement that promises users you won't disclose their information. You may also want to expand your house list by doing co-promotions with other companies that have customers with interest in your product or service.

If you need an outside list, Brondmo recommends using Netcreations, Yahoo! Delivers or YesMail. These companies sell only permission-based lists, which often include details about everything from users' stock portfolios and yearly income to their geographic location and hobbies-information necessary for creating effective rich e-mails.


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