Email and Facebook – Email is Still the Winner

Posted on 08. Jan, 2012 by in Uncategorized

If you are an ecommerce business leader (or have a heartbeat), it’s likely you have seen these headlines since 2007 that proclaim the death of email.

At first, this produced a smirk and a chuckle from most folks in the business. However, a war is underway between Facebook and Email… a war for the eyeballs of consumer. It’s time to review the state of the battlefield. Headline = Email is still winning the war but just lost a key battle!

Here are some quick facts:

1) Facebook won the younger customer! A new study by Chadwick Martin Bailey was summarized onĀ Emarketer today. The headline is that consumers 45 and older are far less likely to use Facebook to share content than 18-24 year olds. 95%+ said that they use email to share content with friends/family versus only 43% saying the same of Facebook. The younger audience was the opposite with only 70% saying they use email to share content versus 76% saying they would use Facebook.

2) Email typically provides 20% to 40% of an online retailer’s sales AND often 25% to 50% of Contribution to Margin (e.g. profit before all of those nasty fixed costs). Yikes! That’s pretty important. Email is NOT dead right now.

3) Email driven by member posts and direct messages is propelling overall FB traffic. YES! Good ol’ html email is the driver of the majority of visits to Facebook. Think about the average number of emails per week per user on Facebook and the percent that convert to a visit. In a funny way, email is still massive but the brand is losing control of the content and frequency. The customer owns these levers now through social media. Will Jenny Jones get your email about an upcoming promotion? Maybe, if she has social proximity to one of your Facebook Page friends AND that friend “likes” your promotion. What a wake up call!

So the war rages on, and the battle for the younger consumer is over. Already many younger consumers use email only as a transactional tool (required to buy stuff and as a password maintenence tool). Older consumer demographics will follow suit and Facebook will overtake Email across the board.

How to Avoid Becoming Collateral Damage:

1) Build Your Facebook Fan Friends List Now: This will, over time, replace (a portion) of email reach as the way to reach your existing customers. Victoria’s secret is a great example of getting ahead with 8 million on VS and nearly 6 million on Pink (strong content doesn’t hurt). Most retailers are facing very low friend counts. My rough estimate finds .005 friends to each active email is the norm. Wow. We must get on the ball, people! Think about how your blog, twitter, email, site and Facebook site can be integrated across campaigns to drive fanbase.

2) Make Email Personal: This is old news but the urgency is heating up. The capabilities to build triggered or personalized content into your email program are all here today. Use them now to reduce the speed at which the email channel declines over the next few years. Companies with younger customers will see the pain first. Email will not drop off from 20% to 0%… it will gradually decline until the tipping point and then the decline will accelerate. When I review the email programs of most ecom businesses, there are still many initiatives that can increase dollars per email.

3) PROFIT MIX FORECASTING: Companies should review what three years of continuing channel mix and profit mix change will do to their business. What impact to your EBITDA will emerge if email shrinks? What channel will take its place? What will this do to your overall “active” customer base?

Ecommerce leaders who watch this battle closely and shift resources will actually become beneficiaries. Whoever wins, your brand can be on the winning side!

Forbes story here/

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