Measuring the Effectiveness of E-mail Direct Marketing in Building Customer Relationship

Abstract

The objective of the study is to examine how response data from direct marketing email campaigns could beutilized in measuring the development of a customer relationship in the context of an end-user loyalty program.The case analysed in the study is Club Sony Ericsson e-mail campaigns targeted at its registered members. Theprimary research problem covered in the study is “how can e-mail direct marketing results be measured by usingClub Sony Ericsson existing campaign response and customer data?” In order to gain understanding of the roleof e-mail direct marketing campaigns in a loyalty program, a framework is created around the concept ofcustomer relationship. As a form of interactive marketing, e-mail direct marketing contributes to relationshipdevelopment by providing a channel for dialogue that consists of both communication as well as interaction.The empirical study is conducted by using a quantitative research method. Data analysis is performed in waysthat could also be applied in ongoing monitoring of relationship development within the case company. Thestudy focus is on the information that click-through data can provide when combined with variables found fromthe customer database. The study is conducted based on individual level secondary data available on recent ClubSony Ericsson e-mail campaigns, collected from campaign report files and Club Sony Ericsson member database.Click-through activity was found to have positive correlation with all the other behavioral variables available onthe customer relationship. The youngest age group is found to have the lowest response rates. Repeat responsesare rare within the studied time period. E-mail address invalidity is found to have significant effect on dialoguetermination.Analysing interaction data from e-mail direct marketing campaigns clearly provides new insight into thedevelopment of a customer relationship. Due to the relatively high frequency, tracking click-through activitiesenables monitoring relationship development in between monetary transactions and reflects the level of interesttowards the loyalty program in particular. However, clicks on links in direct marketing e-mails should be mainlyconsidered as a confirmation of interest rather than a requirement.