Using e-mail marketing effectively can increase business, especially if the lists you target contain former customers who might be interested in hearing about sales and new products. A well-crafted, targeted e-mail can receive a 10 percent to 15 percent response rate or more, according to Gartner. However, taking the wrong approach -- sending out mass e-mails -- is tantamount to walking a tightrope. Any unsolicited bulk email is considered spam, and can turn off customers or result in Internet service providers (ISPs) blocking your e-mails in the future.

On the positive side, sending e-mail is practically free. Costs can be lower than $1 per thousand emails sent, compared to average costs of $15, $500, and $1,500 per thousand impressions for online display ads, direct mail, and television ads, respectively, says Julie Katz, an analyst with Forrester Research.

On the negative side, e-mails may be blocked by the recipients' spam filters and not make it through. More than 15 percent of permission-based e-mails are blocked due to poor e-mail hygiene, according to Gartner, and that rate may increase as spam filters get tougher in the future.

Make sure your e-mails get read

Here's how to ensure e-mail marketing reaches targeted customers and avoids the spam inbox:

  • Make sure that recipients want to hear from you.  Move to an opt-in policy, rather than an opt-out policy, Gartner says. 'Avoid sending e-mail to customers unless you explicitly ask them permission to do so,' says Peter Firstbrook, Gartner analyst. Some experts advise adopting a 'confirmed opt-in' policy, where subscribers must return an invitation before they are cleared to be added to a mailing list.
  • Create lists wisely. Never buy e-mail addresses from another company, advises Chris Thompson, a volunteer with the Spamhaus project. 'No legitimate company will ever sell you a list of 'opt-in' e-mail addresses,' Thompson says. 'Anyone selling you lists of e-mail addresses is very simply a spam outfit.'
  • Tend your lists. Respect customers' wishes and quickly remove them from lists if they unsubscribe, checking this at least once a week. 'If outbound e-mail programs and e-mail servers are not meticulously managed, then it is likely that normal business e-mail will be disrupted by business partner and consumer spam filters,' Firstbrook says. This needs to be addressed company-wide, from all departments participating in e-mail marketing.
  • Stay out of spam inboxes. Don't look or act like spam. Spam filters look for certain words, phrases, or spelling, such as words spelled out in all capital letters. Embedded images, especially those retrieved from a Web server, or large files sometime trigger spam filters. So does the use of carbon copy or blind carbon copy. 'Some ISPs will increase the spam score of e-mail that is not specifically addressed to the actual recipient,' Firstbrook says. 'You can manually check your e-mail against some open-source solutions to see if they will trigger false positives.'
  • Don't alienate your ISPs by racking up complaints from those receiving your messages. It's super easy to report spam; with some ISPs, it's a one-click move. Monitor complaints. E-mail marketing software can automate this.
  •  Don't alienate customers. Some customers will report e-mail as spam simply because they don't like it. 'That doesn't affect our listings,' says Spamhaus' Thompson, 'but it might affect the sender's deliverability at specific ISPs.'

Let recipients know who sent it

Authenticate your e-mails so that recipients can verify who is sending them. Some companies are providing services that improve delivery rates and responses because they have trusted relationships with ISPs and public networks. Pet supplies retailer Petco recently claimed it saw a 40.5 percent improvement in click-through rates and an increase in profit of 3.5 cents per e-mail since it began using third party email authenticator Goodmail Systems.

It's not always easy, and senders need to be careful to provide satisfying content to subscribers, making sure that unsubscribes work, and that technical parts of e-mail delivery are also obeyed so that they don't annoy the postmasters of receiving networks, Thompson says. 'But done properly, non-spam bulk mailing can be highly effective at retaining customers and enhancing customer satisfaction.'