As large and small companies alike turn to the Internet to sell products and services -- what is known as "e-commerce" -- entrepreneurs should be sure to engage another mechanism as its catalyst: namely, e-mail. Because e-mail is so widely used and has a lot in common with pre-Internet direct marketing tools such as printed catalogs, it is exploding as a marketing vehicle. Indeed, it is quickly becoming the sales tool you can't afford to ignore.

So make e-mail your e-commerce ally. When you set up your Web page to sell products or services, incorporate e-mail technology as an integral part of your online campaign. What follows is a look at doing that.

The Big No-No

Before we dig into the how-to, let's start with the evil stuff, the what-not-to-do, which comes down to one all-too-familiar word: spam. Named after everyone's favorite canned lunch meat, spam is unwanted e-mail, the Internet equivalent of junk mail.

Over the past several years, many wannabe online merchants have turned into what we now call "spammers," gathering lists of e-mail addresses and then, for a fee, either selling them or soliciting the addressees. The solicitations weren't requested by the people receiving them. Worse, spammers' ethics were such that these companies made it impossible for recipients to "opt out," or remove themselves from such lists.

Spam is broadly despised by the Internet community, so a word to the wise: stay away from it. It could actually damage your company or brand name.

The Way to Go

Instead of generic mass mailings, turn to the acceptable way to build your online community of potential customers: namely, to a so-called "opt-in" list. This refers to a roster of recipients who choose to receive e-mail about a certain topic -- in this case, your products or services. Building such a list is an e-mail marketer's first challenge.

You can create an opt-in list by asking potential customers for their e-mail addresses, by providing a button on your Web site for users to click on to indicate interest, or by allying with other opt-in providers to gain access to their mailing lists. In this last instance, be careful about crossing the line into spam, especially when sending your first message. Always provide a way for recipients to opt out.

To Market, to Market

Having established your electronic customer list, make your e-mail strut its stuff as a marketing tool. Think communications, context, and presentation. First, use the medium to send out periodic communications, such as new product information, newsletters, special correspondence, and promotions.

Then, consider more complex mailings such as customized content for each receiver, matching a user's preferences with the information to be delivered. A customer could request articles on specific topics, for example, which you would send when those pieces became available.

Next, turn to what is known as "information presentation." In the physical world, a credit card bill or a frequent flyer statement often includes inserts promoting products or services. Likewise, in your e-mail messages to customers, you could include inserts for additional or forthcoming offerings.

Enter Advertising

With inserts, of course, you're edging closer to advertising, the e-mail marketer's endgame. So consider the possibilities -- and then act on them. In e-mail newsletters, for example, you might include "Web banner ads," those advertisements you see at the top of Web pages.  With e-mail programs now "HTML-equipped," or able to send and receive Web pages, the quality and complexity of these banner ads have increased.

In the beginning, you should be able to run your electronic marketing list with an ordinary e-mail program, such as Eudora or Microsoft Outlook. Once you expand your roster of customers, customize your content, or increase your advertisements, however, you will probably want to contract your e-mail delivery and list management to a specialized vendor. Turning to an outside vendor is a well-established procedure, which I call a "natural outsource." Most direct mail marketers outsource the mail delivery and list management of their physical mailings.

In fact, by then, you will have created the electronic equivalent of the catalog retailer's marketing war chest: a targeted list of customers who've also chosen you, a bevy of techniques for enticing them, and a mechanism for advertising. You will have made e-mail your ally in your electronic marketing campaign.

Bradley Feld is a general partner at Softbank Technology Ventures, a U.S. venture capital group affiliatedwith Softbank Corp. He is actively involved in the Young Entrepreneurs Organization.

Copyright 2000


Published on: May 1, 1999