Why the food and beverage industry should be eating up email marketing
Josh Perlstein is a recognized pioneer in the digital marketing space and CEO of Response Media. He has experience in digital media and relationship marketing for some of the world’s largest advertisers and most successful brands, pioneering best-of-class consumer acquisition, brand partnerships and relationship marketing platforms for the likes of Procter & Gamble, WhiteWave Foods, Enfamil formula, Coca-Cola, ConAgra Foods, IBM, Disney and Capital One.
Email is old news. In spite of its age, however, email marketing continues to be successful. Transparency Market Research recently published a study suggesting that the industry, currently worth $4.51 billion, will expand to $22.16 billion by 2025 — an estimated compound annual growth rate of 19.6% over the next eight years.
Although a few major companies such as IBM and Microsoft make up about 44% of the market, growth is expected to surge among small and medium enterprises as email marketing tools become simultaneously easier to use and more sophisticated, with the ability to more precisely target various user groups.
Of the smaller enterprises, the ones that stand to gain the most from email marketing are those in the food and beverage industry. While a few major brands such as Pillsbury and Kraft have increased their investments in digital and email marketing, most companies in the industry have fallen behind the curve.
The industry’s consumers are on their mobile phones, but the brands aren’t delivering anything of value there. Millions of Americans create shopping lists on their smartphones, and the use of apps in the “shopping and lifestyle” category is increasing. To take it further, research from AdAdapted shows that consumers end up buying 65% to 85% of products they include on their mobile shopping lists.
Although it seems contrary to those statistics, most coupons still are distributed on paper. Food brands are slowly starting to notice the trend toward digital, but while 62% more brands offered email signups from 2014 to 2015 — statistics that are admittedly a couple of years old, but it’s unlikely the numbers have changed dramatically since then — a third of them failed to utilize the email addresses even once. Thirteen percent more never established any contact beyond an obligatory welcome message. That leaves a major gap in brands’ marketing efforts.
Display ads have long been thought of as ineffective by advertisers and annoying to consumers, and now this perception is gaining scientific traction. While marketers spend huge amounts of their budgets on banner ads, research indicates that users click on them just 0.06% of the time.
Email, on the other hand, is far more useful for food and beverage marketers. A poll on email use commissioned by Adobe Systems Inc. suggests that email will only grow in importance. Respondents guessed they spent about six hours each day checking emails. While that time was roughly split between work emails and personal messages, 90% confided that they spent some time at work checking personal emails.
Receiving brand emails requires a signup somewhere along the way, which means the consumer has invited the brand into a space where it wouldn’t have been allowed otherwise. Because it’s permission-based, brands have a willing audience that is far more likely to read the email they themselves subscribed to than click on a banner ad that is forced on them.
Email marketing has an ROI of 4,400%, netting $44 for every $1 spent. Management consulting firm McKinsey and Co. also points out that email is 40 times more effective at acquiring new customers than resources like Facebook and Twitter.
When you give an advertiser a cookie ...
Understanding the true value of a consumer’s email address is the best way to create a successful email marketing initiative. Part of the value stems from email’s ability to unlock a consumer identity across multiple channels.
Because email can be matched to cookies and social profiles on many different devices, an email address gives the advertiser the ability to not only send relevant messages, but also to build an accurate picture of the consumer. This can allow them to deliver more relevant ads on channels like Facebook, Pinterest, Twitter, and Instagram. These newer and arguably sexier ways of advertising still generally require plain old email logins for authentication, which makes email the key to unlocking better and more targeted digital media initiatives.
Email can provide a wealth of insights for marketing campaigns. Wondering where to start? The following strategies can help implement these insights to generate more successful initiatives.
- Put focus and investment behind driving scale into email marketing. Merely putting an email signup on a website isn’t enough. Optimize the website for email capture using a light box, and make sure it renders appropriately on both mobile devices and desktop computers. Optimize the timing as well to ensure you capture the greatest number of addresses possible.
- Think about the value proposition. The last thing people want is another useless email. Consider offering exclusive content, downloadables, unlocked benefits, or coupons as an incentive for a subscription. Think about what would be valuable from the customers’ perspective — or just ask them what they’d like to receive — and give them a method of articulating what they want.
- Consider the amount of investment needed to scale. For a national food brand, 200 highly engaged people won’t move the sales needle and a TV ad has better reach. But scale is possible through email for brands willing to put in the funds. We’ve seen food brands build their email programs to more than 5 million active consumers. Building an email list of millions and maintaining great reach will require strategic planning and investment, so budget for this appropriately.
- Understand what drives consumer interaction. Acquiring permission to email the consumer is only the beginning. Keeping that consumer engaged is the key, and nice surprises are one of the best ways to do this. Say a consumer has signed up for email from Pepperidge Farm brands. At some point, sending out an opportunity for loyal customers to get free cookies will not only thank them for being a part of the club, but will also make them feel exclusive and will deepen their connection with the brand. And who doesn’t love free cookies?
- Don’t talk about yourself all the time. Everybody hates that. Prevent email fatigue by developing your relationship with customers instead of just talking about products in an attempt to drive sales. One way to do this is to be transparent and provide information from other sources that they might find beneficial. It’s OK to promote a delicious recipe from a food site that isn’t yours.
Email is an incredibly powerful tool for marketing, and studies overwhelmingly indicate that it isn’t going away anytime soon. When building an email marketing initiative, however, make sure to measure what really counts. It’s easy to get lost in the number of subscribers, but engagement is much more important than sheer quantity. Focus on deepening relationships for a reward of not only increased purchase and loyalty, but also consumer advocacy.