E-mail marketing is moving up a gear. Piers Ford looks at how ‘spam’ is on its way out and personalised and relevant content is in
E-mail marketing has entered a radical new phase in online travel. Gone, for the most part, are scatter gunned blasts stuffed full of deals in the vague hope that a proportion of the loosely targeted recipients will be interested enough to click through and book.
In their place, an increasingly sophisticated variety of content-driven communications are taking the industry closer to its ultimate goal: personalised relationships and an integral role in customers’ lifestyle.
“Perceptions are changing,” says Frank Orman, managing director at digital marketing company LeadGenerators, which has developed a range of follow-up e-mail services for clients such as the Co-op’s Search Travel Online. These include an e-card containing offers, which customers can distribute to let friends know they are back from holiday.
He says: “E-mail marketing works best when you don’t try to sell anything. It’s more about relationship building. Travel companies have woken up to the concept of using it to chase repeat business: instead of spamming a million customers with special offers, focus on the 100,000 who’ve already shown that they want a relationship with you.”
Bold and successful as some of these strategies are – Thomas Cook estimates it is currently achieving e-mail ‘open’ rates, the first step to sales conversion, of 20% – there is a pervasive feeling that we are still in the foothills of realising their full potential.
For example, Lastminute.com e-mails its themed newsletter to three million UK customers weekly – and up to eight million across Europe. Lopo Champalimaud, managing director, lifestyle, claims it has set the industry standard for a combination of relevant and tailored marketing, but says there is still a long way to go when it comes to segmentation.
“The ultimate goal is one-to-one marketing,” he says. “The more we know about a customer, the more we can match the content to them, and that means getting all the pieces of data together to create the profile. Any offer within the newsletter should be tied to the customer’s previous actions. It all comes back to relevance: what did they look at? A deal has to be the right type of deal at the right time. When you hit it just right, the customer thinks ‘That’s what I need now,’ rather than ‘what a great price’.”
At the high end of the game, companies are busy tracking every click the consumer makes in response to their e-mails. The newsletter and Lastminute.com’s other weekly missive, Something for the Weekend, are just part of its e-mail marketing strategy.
Knowledge is also accrued through customer behaviour on the website itself, through transaction-centric personal campaigns – for example, if a user has booked a flight to Rome they’ll need to know about car rentals and hotels, and relevant destination information – and follow-up communication, and through all the activities they engage in with Lastminute.com during their ‘customer lifetime’.
Opodo UK customer relationship management manager Jo Holdsworth says it’s crucial to offer something to a subscribed audience over and above what everyone else is sending them.
“In the travel industry, most companies send a newsletter once a week – and we’ve been looking at changing that,” she says. “It isn’t just about giving them money-off deals. We’ve made our content more interactive with photo galleries and competitions and we’ve been quite surprised at the impact on opening and click-through rates. There’s a definite return on investment in terms of conversion to bookings.”
Holdsworth shares the belief that content must become more personalised and relevant. Regular travellers to Paris, for example, don’t want yet another puff piece with directions to the Eiffel Tower the week before they fly. She says: “If you listen to your customers, they’ll tell you what they want. We do a lot of user testing when we bring out an online product, so I know what to put in the e-mails. There’s a move away from simple price and destination-based offers to more meaningful travel: we want to evoke passion.”
Companies are wrestling with some key questions about frequency and intimacy of contact. Will they lose revenues if they drop mailings to once a fortnight? What’s the effect of staggering e-mails? Are UK customers ready yet for the growing US practice of chasing departing online browsers with e-mails offering prices, hotels and incentives for the holidays they’ve just been looking at?
The answer to the last question, says Holdsworth, is probably “not quite yet”. But as the audience becomes more sophisticated, it will raise less of a big brother-type spectre. For the rest, she says, “the best thing is that it’s the most measurable”.
Thomas Cook head of online marketing Manuel Mascarenhas says: “The technology is there, the information is there, the analytics are there to make it happen. E-mail marketing is low cost, it’s quick, trackable and measurable, and it gives you incredible customer insight. Look at Amazon: achieving that level of personalisation is what we’re all striving for.”
Mascarenhas says Thomas Cook’s current 20% ‘open rate’ for its newsletter is “reasonably good and much higher than an equivalent direct marketing campaign”. But beyond that, conversion to sales will depend on the quality and uniqueness of the content.
In 2005, according to the European Interactive Advertising Association, UK customers led the way in online travel purchasing across Europe.
But while more than 60% of them researched online, just 38% proceeded to buy holidays, and 48% to buy travel tickets. There is still a discrepancy between the premise of online marketing and actual conversion rates.
And this remains the hardest nut to crack. As Holdsworth points out, if you resolve to e-mail a customer just once a year – around the anniversary of their last booking, for example – the results will be hit or miss. “You need to be in their inbox at the time they’re planning their next trip,” she says.
Philip Bryan, managing director of web marketing services specialist Etelligent, says the industry has to move beyond seeing each message as a single activity and take advantage of the automation tools and software that allow e-mail marketing to be a fully integrated strategy.
“As a marketing medium it needs handling with care,” he says. “Frequency is one of the key parameters. Another is the subject line. It’s one thing to be attention-grabbing, but people are wary of things they don’t recognise or understand, so if you find something that gets a good response, stick with it.”
He warns that sending a single bad message could be even more disastrous than over-sending. When a customer agrees to receive regular e-mails – and the more you allow them to fine-tune their own requirements the better – a deal is struck, he says.
“The deal is, we’ll pester you occasionally, and if you decide to open it, you won’t find just another unfocused offer, you’ll find tailored content especially for you. Travel companies that achieve that will be the winners, because they’ll stick out from the crowd. But if the customer gets one bad message, they can avoid seeing anything from that company ever again. You won’t just lose them for that campaign – you’ll lose them for the entire year.”
During the next 18 months or so, there’s no doubt that proliferating mediachannels will add an even more complex layer to the e-mail marketing challenge. But getting it right – and again, everything depends on the supply of relevant content in the right format – will be a key weapon in the war for customer retention.
Reminder e-mails containing packing lists, guide book recommendations and well-written destination editorial material are practically expected by loyal clients. So, too, are follow-ups which encourage them to tell the company how their next experience could be improved. But factor in mobile phones – few people leave them behind while travelling – and PDAs, and a whole new opportunity opens up for downloadable communications that integrate the holiday with the client’s entire lifestyle.
“The technology is there to do all this,” says Gavin Sinden, digital marketing director at Twentysixlondon, which works with big names such as Opodo on developing e-mail marketing strategies.
“Full automation is a huge area to be exploited and most companies have barely scratched the surface. It’s key to building customer relationships. Holidays are exciting and the more you can do to get your client in the holiday mood, the better: MP3s of relevant music, guides, links to relevant blogs, anything that brings the holiday experience to them in anticipation of their departure. The only limit is a company’s own vision of what they can do with it.”
The reality of e-mail bulletins in travel
In an attempt to gauge just how sophisticated the online travel industry’s e-mail marketing proposition is at the moment, I subscribed to several e-mail and newsletter services, using the same demographic profile. [Age 35+, professional, partnered, no kids, household salary £45k+, preferred airport Stansted, preferred holidays: city breaks in Europe and long haul, cruises, all budgets, short availability].
The answer? Fairly good. Most of the subscription forms required surprisingly little profile information to begin with. However, there is a vast gap between the leading exponents and the rest.
Lastminute.com confirmed its reputation at the head of the field, along with Thomas Cook (an onslaught of self-catering apartments notwithstanding) and Opodo, with newsletters that aspire to be taken seriously as lifestyle e-zines.
Lastminute.com managing director, lifestyle Lopo Champalimaud says: “We change the theme every week and segment the readership in various ways. We work hard to maintain relevance and capture the right tone and voice, but the aim is to make everything relevant to a specific customer’s needs.”
Obviously, the more they know about their customers, the better the content match. After a couple of weeks of clicking through, some of the content was becoming startlingly relevant to our profile. This was less true of Lastminute.com’s Something for the Weekend, a regular offer-led communication that never recaptured our interest after an initial, off-target promise of karaoke and Take That reunion tickets.
Thomas Cook head of online marketing, Manuel Mascarenhas, says it’s a question of getting the right balance between generic e-shots (“We do like to send some which reflect the range of destinations and offers and the fact we provide much more than just charter holidays”) and alerts tailored to specific customer needs.
Elsewhere, there were some nice one-off e-mails, including a promotion for a wine holiday, and a click-through chance to win flights every hour from Ebookers, and a comprehensive cruise promotion from Travelcare.
Broadly, too, the offers took preferred departure airports and types of holiday into account.
But overall, the evidence is that even the best practitioners of e-mail marketing have some way to go before they achieve their goal and become an integral, even indispensable, element of their customers’ lifestyles.