Roving.com: Leveraging Loyalty E-mail

As an ISP, you have a captive audience: your subscribers. You can leverage the relationship with that audience to increase your profitability, through a concept called "loyalty e-mail".

by Christopher M. Knight [January 26, 2000]

Loyalty E-mail consists of communications about products and services, sent by online merchants to customers with whom they have an existing relationship, either through past purchases or through site registration.

Loyalty e-mail has four key characteristics: It's relevant to recipients, it is personalized, it is targeted, and it is ongoing.

Loyalty factor
Generating repeat sales is critical to the success and profitability of your merchants, as it costs approximately six times as much to acquire a new customer than to sell to an existing one. By helping your merchants further their relationships with customers, loyalty e-mail can drive repeat sales.

With loyalty e-mail, you are mailing to folks who know you, to whom your name is familiar. For this reason customer-list mailings can get as high as a 25 percent CTR (Click Through Rate), according to Gail Goodman, CEO of Roving Software Inc, provider of loyalty e-mail software and services.

Loyalty e-mail is not to be confused with "opt-in" lists, such as the ones managed by companies like PostmasterDirect or Yesmail, but rather your customer lists or your customers' customer lists (if as a hosting provider, your merchant/customers use the technique).

Outsourcing factor
Any ISP who is hosting online stores or almost any other e-commerce services for small to medium size businesses can benefit from the loyalty e-mail services of a company such as Roving.com. They have built their loyalty e-mail component into packages such as Intershop's store building tool, among others, so that it's an easy integration for the ISP.

According to Goodman, one of her company's primary objectives is to help the ISP to help their merchants, so they can be successful at e-commerce. You must provide more than a hosting service if you wish to retain your merchants for the long haul, and this increases your short term revenue and lowers your churn rate. The more successful your customers are with your ISP, the longer they will stay with you, the greater your long term revenue will be with them, and the more referrals you will get.

Program for every purse
Roving.com offers three levels of service. Entry level costs $25 per month per merchant. Mid- and high-level services are priced at $75 and $200 per month, respectively. Roving.com shares this revenue with the ISP. They ask ISPs to give them $1,500 to get started, and if they want deeper discounts, there is also a $10, 000 program. As an ISP, you get up front technical, support and sales/marketing training, sales and marketing kit, collateral, e-mail marketing templates, website materials, selling presentation and a selling telesales scripts that work.

If an ISP hosts 1,000 stores, and all those customers were to buy the $75/month program, that would bring in $900,000 per year, and the ISP would get gross $450,000.

The marketing message
By providing customers with valuable, relevant information about products and services, loyalty e-mail helps merchants build awareness and loyalty with customers, ultimately increasing repeat sales. From a consumer's perspective, loyalty e-mail alerts them to offers that are relevant to their needs and interests, based on past purchases and requests.

From the consumer's point of view, loyalty e-mail convieniently notifies them of new products they're likely to be interested in, informs them of special sales, and reminds them when special occasions are approaching and suggest appropriate gifts-all of which can save consumers time and/or money.

Is this spam?
By some definitions, it is. It is, after all, unsolicited commercial e-mail. But there are mitigating factors: Spam is usually irrelevant to the recipient, and most often sent from a party unknown to the recipient. By contrast, loyalty e-mail is generally relevant to the recipient, provides value, and is from a sender with whom the recipient has a known relationship.

Key Point: Loyalty e-mail always offers the recipient the opportunity to "opt-out" and be removed from further communication.

With loyalty e-mail, the potential benefit to recipients is clear. As long as it's not abused, businesses have a right and a responsibility to communicate on a regular basis with their clients, but, again, it's crucial that you respect their right to privacy by making it easy for them to stop receiving communication from you or your merchants.

Adding it all up
Building customer loyalty is a goal of all marketing programs and loyalty e-mail reinforces the other elements of the merchant's marketing mix to help accomplish this goal. It provides a very cost-effective means to generate awareness and build a merchant's brand by directly reaching customers on an ongoing basis to communicate the merchant's value.

To Your ISPs Success!

Christopher ("Sparky") Knight
Founder & Managing Editor of the ISP-Lists Discussion Community

Discalimer: Neither Christopher Knight, nor ISP-Planet, nor internet.com Corporation has any ownership interest in Roving.com, nor were we paid to do this ISP profile. This ISP-Planet ISP Profile was done as a courtesy to ISPs everywhere. Send us your feedback at: feedback@isp-planet.com.

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