Business mentor: Email proving to be powerful marketing tool

Q: We're not looking for a miracle, but like most businesses we're full of vim and proud to punch above our weight. In three years, we've gone from zero to more than 3000 regular customers who buy direct and online. Now we want to grow beyond Auckland and tell the rest of the country and the world, particularly Australia, how good our product is. We have a little budget and big plans. Can you help?

* Small business sector specialist Sarah Trotman asked Smartmail director Jeff Mann for some advice

A: Have you thought of email marketing? It is now proving its worth as a powerful marketing communications tool - and it is cost effective. For many businesses, email marketing is now forming a central component of their general marketing mix. Regular dialogue with customers far and wide is now no longer the domain of big companies with big budgets - email marketing allows high-quality communications at a fraction of the cost of traditional marketing.

Don't get email marketing confused with spam. They're not the same. Email marketing is permission-based, spam is not. Think of your letterbox. You have a relationship with your bank and airline and want to hear from them. But unsolicited flyers head straight for the bin - they are unasked spam.

So the success of this medium is based on the relationship between you and your customers. The customer will have as much control over what you send them as you do.

So how does email marketing work?

Imagine being able to send personalised emails that have the feel and appearance of your website or even one of your brochures, but are a lot more intelligent. Any good email marketing software package will allow you to access an array of features such as tracking on open rates, click-throughs, bounce-backs, refer a friend, uploading photos and survey/response forms.

The secret of a great email marketing campaign is to be well mannered. Always offer your customer the opportunity to unsubscribe or allow them to make other choices about what you send them.

If you don't have their email addresses already, then you will need to ask for them. In my experience, telemarketing with an incentive - say an invitation to an event or entry into a prize draw - is probably the best way to obtain this permission.

If this is too costly for you, then you might like to consider asking for their email address on your packaging.

The status of the prospects is a little "greyer". However, a one-off email inviting them to join your newsletter mailing list, again with an incentive attached, can work wonders. Don't forget to tell them what to expect from the newsletters. Sell the benefits.

The key to using email marketing to spread the word is to provide information that is worth spreading. We've found that creating a members club that provides exclusive benefits - such as discounts, advance notice of promotions, free shipping deals or special gifts - is a great way to encourage readers to pay attention and, crucially, to tell their friends.

What's most important is to respect your readers and the permission they have granted you. Keep in touch regularly with information that is relevant and worthwhile to them and you'll be surprised at how widely the word can spread.

Many local businesses get most of their overseas business coming largely from email marketing.

* Jeff Mann is the managing director of Jericho, the people behind SmartMail, an email marketing software agency that offers online email marketing services to many small to medium businesses.