Reusing direct marketing strategies for email-marketing campaigns

BELBEOC'H Gaëtan

June - December 2003

Is it possible to reuse the Direct Marketing Knowledge to manage E-mailing
campaigns?
Case study: LaRedoute International Websites

Master’s Thesis

“From Direct Marketing to E-mail Marketing”

Master’s professional thesis
Management & New Technologies
Promotion 2002 – 2003

Acknowledgments

D

uring the six months I stayed at LaRedoute Web Department, I called upon many
colleagues to help me understand the specific topics they mastered. They all
contributed to the realization of this thesis which tries to bring together the

knowledge of a whole team in the young and quickly moving e-mail marketing field.
I would like to thank especially Mrs. N. Boudaa and I. LeCam, who helped me to understand
the organization of the web department and to learn the profession of web marketer in an
international context. I also greatly appreciate the helpful advice I received from my thesis
director Mr. Bathelot who guided me in the organization of this thesis.
Special thanks to the team of web-developers who made me size the technical factors
behind all web-marketing decisions, and the “web-service” teams who easily shared with me
their competence and experience in copywriting, designing and “HTML- integrating”.
My regards goes also to many people working for other departments such as P. Delepaule,
(International Studio’s manager), I. Marcotte (Web Analyst), Aymar De Franqueville (Legal
Manager) and Obin, (Statistical and Targeting manager).

LaRedoute DCEM – Master HEC/ENST 2003

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Master’s Thesis


Executive Summary

I

n the year 2003, e-mailing is a key success factor for mail-order selling
companies such as LaRedoute. Most of their on-line business is done thanks to
targeted e-mailing special offers. More than just informative newsletters, they

have become a fully efficient direct-marketing media. Hence they have benefited
from the traditional direct marketing experience of mail-order selling companies. But
e-mail is an Internet media and has many differences with a direct marketing letter. In
this thesis, we will try to establish which from the direct-marketing techniques should
be re-used as is, which should be adapted to the e-mail media and finally what new
technique should be used especially for e-mailing campaigns. To achieve this goal,
we will review and compare the communication techniques, the tracking and
targeting processes and the final sending of a traditional direct marketing and an email marketing campaign.


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Table of Contents
Acknowledgments......................................................................................................................2
Executive Summary...................................................................................................................3
Table of Contents.......................................................................................................................4
Introduction................................................................................................................................6
Context.......................................................................................................................................8
1) Communication and promotional offer techniques..............................................................10
a) A changing strategy for a changing customer...................................................................10
i) A change in the view of the customer...........................................................................10
ii) An organizational change.............................................................................................10
b) Communication for paper mailing VS e-mailing.............................................................11
i) The mailing envelope / the e-mail header.....................................................................11
(1) Message on the envelope.........................................................................................12
(2) E-mail subject line...................................................................................................12
(3) Expeditor’s identification: the “from” line of e-mails.............................................13
(4) Consistency of email address over time..................................................................15
ii) The letter body / the email body...................................................................................15
(1) Text / Image coherence...........................................................................................16
(2) A readable text.........................................................................................................17
(3) A believable and proactive style.............................................................................19
iii) The gift leaflet.............................................................................................................20
iv) The order form.............................................................................................................21
c) The communication principles of direct marketing..........................................................23
i) The entertaining communication style..........................................................................23
ii) The standard commercial communication....................................................................25
iii) The intimate communication style..............................................................................26
iv) The administrative style...............................................................................................28
d) Commercial offers techniques for traditional mailing and for e-mailing.........................31
i) Special-offers codes and contingency marketing..........................................................31
ii) Specialized small catalogues and dedicated landing page...........................................32
iii) Transparent offer-codes links......................................................................................34
e) The viral process, a danger or an opportunity?.................................................................34
i) Viral Marketing, how to get the best from the viral phenomenon................................34
ii) The dangers of the viral phenomenon:.........................................................................37
2) Tracking, Analyzing and Targeting......................................................................................41
a) Tracking customers’ order and behavior..........................................................................41
i) Tracking the orders........................................................................................................41
(1) Tracking orders customer per customer..................................................................41
(2) Tracking and testing different targets in the same campaign..................................42
ii) Tracking prospects’ or customer’s behavior................................................................42
(1) The advantages of Web technology: almost everything is e-traceable...................42
(2) Technical bases of the e-tracking technology.........................................................43
b) Analyzing the results and targeting..................................................................................45
i) Customer purchase analysis...........................................................................................45
ii) The RFM model (Recency Frequency Monetary Value) ............................................46
iii) Behavior analysis........................................................................................................48
(1) The opening rate......................................................................................................49


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(2) Click-through analysis.............................................................................................49
(3) Unsubscribe rate......................................................................................................50
iv) Behavioral targeting....................................................................................................51
v) Towards a multi-channel data-mining and targeting....................................................56
3) Sending and making sure it arrives to destination................................................................59
a) The importance of timing..................................................................................................59
i) The best months.............................................................................................................59
ii) Choose your day...........................................................................................................59
iii) Choose your time.........................................................................................................60
iv) Choose a frequency.....................................................................................................60
b) Coordination with the call-center.....................................................................................62
i) Coordination with the call center...................................................................................62
ii) Interview with LaRedoute.fr web call center...............................................................62
c) Foresee the load on your servers.......................................................................................64
d) Receiving the (e-)mailing.................................................................................................67
i) Importance and origins of Spam....................................................................................67
(1) Defining Spam.........................................................................................................67
(2) Origins of the Spam problem..................................................................................68
ii) Anti-Spam legislation...................................................................................................69
(3) U.S. regulation: the CAN Spam act of 2003...........................................................69
(4) E.U. regulation:.......................................................................................................69
iii) Anti-Spam software and the False Positives problem.................................................70
(1) Automated Spam Filters..........................................................................................71
(2) Anti-Spam tools and actions taken by e-mail users................................................72
(3) ISP’s Anti-Spam black-list......................................................................................74
Advices and recommendations................................................................................................75
Conclusion...............................................................................................................................78
Bibliography.............................................................................................................................79
Index of illustrations................................................................................................................81


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Introduction
From mailing to e-mailing:
Is it possible to reuse all the direct marketing knowledge to manage e-mailing campaigns?
Case study: LaRedoute.

L

aRedoute, as one of the oldest European leader in mail-order selling, has a great
experience in direct marketing. Communication techniques, personalization, special
offers, reporting and targeting, all these techniques have no secrets for the company.

Engaged in the e-commerce since a few years, the company has recently achieved one of
the last steps of multi-channel integration: the e-commerce department is now standing side
by side with the more traditional direct marketing.
If multi-channel technical integration is today’s trend and seems to be the right path
for modern companies, the evolution of marketing is not so clear. Indeed, direct-marketing is
quite a mature field with its long years of experience and its easily-measurable campaigns.
E-mail looks like traditional mail in many ways and it seems easy to translate directmarketing experience toward emailing. However, Internet is a lot different than paper in many
aspects and these differences should apply indeed to e-mails and traditional paper mailings.
In this thesis, we will try to prove with facts, technical literature and a bit of
experience, which from the direct-marketing techniques should be re-used as is, which
should be adapted to the e-mail media and finally what new technique should be used
especially for e-mailing campaigns. To achieve this goal we will describe the process of a
direct marketing campaign from its conception to its final destination and analysis, each time
highlighting what is presently used in both traditional direct marketing and e-mail marketing,
what could or couldn’t be used from the direct marketing experience toward e-mailing and
which new techniques appeared specifically for e-mailing.
In the first part we will step into the communication and promotional offers techniques of
direct marketing and see how well they can adapt to e-mailing. Then, we will explain the
techniques used to track, analyze results and define targets to enhance the efficiency of the
campaigns. We will therefore present different techniques such as “special-offer codes
tracking” and “Recency Frequency Monetary-value” model for traditional direct marketing and


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explain some of the latest internet tracking technologies. Finally, we will explore in our last
part the sending process of paper mailing and e-mailing campaigns and show the great
differences between them.
Topic restrictions:
The scope of this thesis has been reduced on purpose to the study and comparison of
traditional direct marketing and e-mail marketing techniques for mail-order companies. The
following subjects have not been treated:
 Detailed statistical, financial or technical explanations: more than giving details about
used techniques, we will attach to explain which techniques are useful and what are
their basic principles.
 Direct marketing and e-mail marketing in other sectors of activity. This thesis was
done at LaRedoute and is hence mainly focused at mail-order selling companies.

Vocabulary:
Direct Marketing definition1: the practice of delivering promotional messages directly to
potential customers on an individual basis as opposed to through a mass medium.
In our thesis, however, we use the word "direct marketing" for traditional (paper) directmarketing as opposed to “e-mail marketing” or “e-mailing”.

1

Definitions given in the inverstorwords dictionary: http://www.investorwords.com


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Context

L

aRedoute is the largest and oldest mail order company in France. Since 1922, the
company is selling products through catalogues and has developed a great
experience in direct marketing. Traditional mailing is still the most important mean of

contact with customers. Depending of the customer's quality, LaRedoute send up to one
mailing every two weeks, to an active database of around 8 million active customers
which accounts for almost three quarters of French population. This great experience has
led LaRedoute to an international leading position.
The first newsletter was sent once every two month in 1997 to almost 10 000 customers
without a real commercial planning. Since that date the importance of e-mailing is growing
every day, and today a commercial planning is prepared every season for France and for
International as well. Campaigns are sent to more than 750 000 customers once every
two weeks for France, and targeting is thoroughly used to enhance the results. 2002 has
also been the year of tests for e-mailing campaigns and results were clearly in favor of multichannel cooperation.
All these results showed that e-mailing is becoming a strategic asset for mail order
companies such as LaRedoute. Moreover e-mailing has two major advantages over
traditional mailing which makes this media particularly interesting.
The cost of printing and sending processes is virtually free for email compare to the very
expensive cost of traditional mailing. For example, the “Fideli7” campaign for the year 2002
has been sent to 2 465 000 customers using traditional mail and to 650 000 using e-mailing.

paper mailing
cost of the document
(paper, ink…)
stamp cost
Envelope Adressing
Sending
Total

€
€
€
€
€

0,056
0,231
0,029
0,025
0,341

E-mailing
€
€
€
€
€

0,010
0,010

2

2

The sending cost for traditional mailing is the cost of preparation (mainly putting letters into envelopes).
For emailing, the cost of sending is the redemption cost of the e-mailing software.


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Master’s Thesis


The other major advantage of e-mailing compared to traditional mailing is the fact that you
can reach your customer almost anywhere. This is really useful for example during the
summer holidays. This is especially important for mail-order companies because of the
timing of operations which are generally valid for three weeks only.


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Master’s Thesis


1) Communication and promotional offer techniques
a) A changing strategy for a changing customer
A few years ago, internet was still an evolving media concerning a small, well educated part
of the population. Some say this is still the case today, but in 2003, the internet crisis is far
away, and e-commerce is growing at an incredible yearly rate of more than 100% (for
French mail order companies), accounting for almost 10% of overall turnover3 to compare
with almost 0,5% in 1999. Moreover, in USA, Online sales totaled 30% of cataloguers’ sales
at the end of year 2002 according to DoubleClick 4. This prefigures that online growth has not
reached its maximum and will certainly be as important as the traditional letters. According to
many actors at LaRedoute, 2003 has been a year of great changes:

i) A change in the view of the customer5
In 2000, the number of e-shopper was quite negligible. Hence it was interesting to take them
as a separate target. Profiling study showed that the average LaRedoute e-shopper was
a working young mother with children. At that date, the e-mailing commercial planning
was adapted to this client profile. Today, with a growing customer database of nearly one
million customers, the segmentation has to be redefined. As many customers in the emailing database were also recognized as making orders via traditional mail, telephone or
minitel®, the decision was to give up the distinct view of internet shoppers and instead to use
a single “multi-channel”6 customer database to follow a single targeting process and a
single multi-channel commercial planning.

ii) An organizational change
This change has led to an internal reorganization that occurred in July 2003 to change the
place of the e-commerce department in the company. No more a stand-alone department,
the e-commerce is now completely integrated in the flow chart of LaRedoute, standing
side by side with the paper-catalogue department and the stores department.

3

9% of total turnover of French mail order companies in 2002, Journal du Net, July 18, 2003
http://www.journaldunet.com/0307/030718vad.shtml
4
DoubleClick report of July 15, 2003
5
Isablelle Marcotte, laredoute.fr analyst
6
a « multi-channel » customer can make an order either by phone, by mail or by internet


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These great changes interfere in favor of integration of the web, and more specifically of email as a new media for LaRedoute’s direct marketing strategy. In practice, the integration of
e-mailing in the general commercial planning allows costs and time saving as it is possible to
re-uses the texts and images that were created for traditional mailings. The question we
should ask is how far can we go in re-using the communication of a traditional campaign for
an e-mailing campaign?

b) Communication for paper mailing VS e-mailing
With more than 30 years of direct mailing experience, LaRedoute has developed a great
experience in communicating to its customers. A lot of different tests have led to a set of
“Best Practices” of direct marketing. We will present them and show if and how they
can be applied to e-mailing. Information about traditional direct marketing communication
comes mainly from an interview with Philippe Delepaule, manager of LaRedoute
International Studio (August 20th 2003).
A traditional mailing is generally composed by four elements: the envelope, the letter, the
gift description, and the order coupon. A commercial e-mail cannot be decomposed in
such a way, but we will try to show the similarities.

i) The mailing envelope / the e-mail header
The envelope has to attract the customer in a matter of seconds, without affecting the
image of the company. The only goal is to make the customer open it!
To achieve this goal, the marketer can play on different factors: the size and the format of the
envelope, its design, the message written on it, and the identification of the sender. In
comparison, the email can only play with two of these factors: the subject line and the
identification of the sender.


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(1) Message on the envelope

In traditional mailing, the envelope must show a
clear promise to the client: it must be unique
and irresistible (“for me especially, today or
never”). The second point is that the promise
must

The justification

have

a

justification,

otherwise

the

customer will have an image of bad quality or outof-date products, and the brand image of the
company will be affected.
Figure 1: Example of an envelope from a mailing from
LaRedoute in France

The strong promise

(2) E-mail subject line

We can apply these "Best Practices" to the email subject, which is the first element of a
newsletter seen by the customer and hence directly related to the opening of the email.

The two key points of a good subject line:
 A strong and clear promise
 Personalized and clear justification

Taking into account these two constraints, marketers should do their best to distinguish
their e-mail from the bulk of other commercial e-mails that their customers receive
everyday. A good example of differentiation is the use of subject-customization: in Spain,
the use of first name in the subject of the email increases the opening rate of about 13%
(figures from Spain e-marketing workshop 2003) and about 9% in USA. This kind of results
shouldn’t be taken as a definitive truth, some U.S. companies claimed that the use of client’s
first name in the subject line upped their opening rate by 50% 7 in 2002, but as this practice
was used by more company, the power of this trick decreased.
Examples of email subject lines:
7

Circulation Management, Nov 1, 2002

http://circman.com/ar/marketing_email_subjectline_testing/


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This email follows these best practices:
£10 off and free delivery for Christmas
Strong promise

LaRedoute UK

Justification

This one only shows the promise:
Take 15% off Puma(R), Adidas(R)...

LaRedoute US

Strong promise but no justification
No real promise and no justification:
Succombez a la tentation!

LastMinute.com

(Succomb to the tentation!)
No explicit promise and compelling justification
Email subject line has many drawbacks in comparison with the envelope, mainly for its small
size (only a few words) and its zero-flexibility in the choice of the format. But these
constraints give an extreme importance to each word of the subject line. We can find an
interesting comparison with the newspaper advertising copywriting: according to the well
copywriter David Ogilvy8, "on the average, five times as many people read the headline
as read the body copy. When you have written your headline, you have spent 80 cents
out of your dollar." This basic principle applies exactly for e-mails and should be email
marketer’s motto.

(3) Expeditor’s identification: the “from” line of e-mails

The sender’s name and address are the other key elements of the envelope which can be
relevant for emailing. They also play in favor of the opening of a letter or an email.
In traditional direct marketing, recognition of the sender through the expeditor’s address,
name and logo has mainly two objectives:
 Reassure and identify the sender
 Attract his curiosity to make him open the letter
Email “from” line is, like the subject line, far less flexible than traditional mailing. There is
only place for an email address and a few words. But the absence of place doesn’t mean
absence of importance, according to Doubleclick Consumer Email Study9, nearly 64% of
consumers cite the “from” line as the most important factor in opening an email. This
8

David Ogilvy, Ogilvy on Advertising, Vintage Books (March 1987)

9

DoubleClick 2003 Consumer Email Study, October 2003
http://www.doubleclick.com/us/knowledge_central/documents/research/dc_consumeremailstudy_0310.pdf


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Master’s Thesis


result can be explained by the email-specific Spam 10 problem: customers receive each day
more unsolicited commercial emails, which makes them very selective. Since opening tens
or hundreds emails just to check whether they’re worth is very time consuming, the “from”
line is becoming the easiest and fastest identifier of the trustworthiness of emails.
Email marketers should brand their newsletter with an easily recognizable address. The
email address should sound as true as possible to inspire confidence, and marketers
should avoid using computer-generated email addresses
Bad examples:

Good examples:

Houra.258248.6624.0@info.houra.fr

annonce@amazon.fr

VictoriasSecret@vsd.m0.net

newsletter@maximiles.com

Beside the email address itself, SMTP11 allows the sender to add a small description. This is
another opportunity to precise the provenance of the email and to reassure the receiver. You
can for example add a short description of your company or precise the department
from where the email has been sent.
Examples of email “From” lines:
"Houra votre cyberMarche" <Houra.258248.7319.0@info.houra.fr>
Good description

Bad computer-generated-like email address

This short description is good because the Houra is not a “top-of-mind” brand of
supermarket.
"Claire_3SUISSES" <Claire_3SUISSES@xmr3.com>
Good precision

Bad computer-generated-like email address

This is here a good Idea to give a real name to establish a relationship between the seller
and its customers because 3Suisses is a “top-of-mind” mail order company in France and a
description wouldn’t be useful. But why the address looks that much generic? Would you like
to establish a relationship with a machine?
"LaRedoute" <LAREDOUTE@uk.redoute.com>
Average description

misleading

email

address

(http://uk.redoute.com

or

www.uk.redoute.com brings nowhere)
10

Spam : Electronic junk mail or unsolicited commercial emails. This topic will be deeply treated in the second
part of this thesis.
11
SMTP: Simple Mail Transfer Protocol.


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The short description could be enhanced with a short indication of the business, as
LaRedoute isn’t a top-of-mind company in the UK, we could use for example “LaRedoute,
Fashion at my doorstep” to precise it.
Concerning the email address, this is a better-looking example comparing with the two
precedent examples. However, it is misleading because most email address ends with the
website

host

name

(for

example,

somebody@hotmail.com

www.hotmail.com) and here http://www.uk.redoute.com

refers

to

the

site

or http://uk.redoute.com are not

valid web addresses.
(4) Consistency of email address over time

Another point, directly related with Spam is the fact that some exclusive email filters accept
only emails coming from a personal email-address “white list” edited by the user. If a user
subscribed to a newsletter and added the newsletter email address to his white list, he will
receive future emails coming from this newsletter only if they are sent with the same address.
This is a copy of the Exclusive email filter of the well known webmail www.hotmail.com :

12

This constraint tells us that email address should always stay the same on all your
newsletters.

The three main points of a good from line:
 A clear and reassuring address
 The address should stay unchanged over time
 Add a short description of the company or the department

ii) The letter body / the email body
According to Philippe Delepaule, there are mainly three key points for a good direct
marketing letter: text / image coherence, easily readable, and believable.

12

Screenshot of a part of hotmail.com “Junk Mail Filter” option page. November 15, 2003 - 23:30PM GMT+1


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Master’s Thesis


(1) Text / Image coherence
First, the letter must attract the attention of the reader with pictures: the first reading is more
a global view of the mailing and is done by the right -imaginative- part of the brain. The visual
part of the letter should set an ambiance and seduce the reader. Then, the second reading is
made by the left –analytical- part of the brain. The text you write must confirm the first
impression set by the images. This is the text / images coherence communication rule.

Figure 2: Example of a problem of graphic / textual coherence

This is a bad example: do you see anything common between the design and the text?
(traditional mailing, LaRedoute)

Figure 3 : e-mail commercial Newsletter from Newport News Sept. 12th 2003


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This is a coherent example:
All images are showing a leather-fashion collection and the text is not speaking about
something else.
(Email newsletter, Newport News)

(2) A readable text

•

Choose the right font

Tests made for traditional mailings advocate for the use of readable font. This may seem as
evidence, would it be useful to create a mailing if it’s hardly readable by its customers? But
the important thing is that most fonts used for paper mailings are not adapted to screen
reading. “Arial” and “Times New Roman” are good examples of paper-font. Microsoft has
therefore developed four web-specific fonts:

You can easily compare these fonts with the next one, Times New Roman, which is paper
specific.

•

Writing for commercial mailings and emails

Customers don’t read commercial mailings like poems; marketers have only a short time to
attract their attention and shouldn’t distract them from the only objective of the newsletter:
sell them products or services.


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Master’s Thesis


Dear Madam, Dear
Sir,
Often, summer stays
longer and we can
benefit from its light
and warmth… this is
“Indian summer”.
This period of
sweetness, of
clement sun,
exceptional colours,
is the ideal moment
for…

Figure 4 : bad (commercial) copywriting example (LaRedoute paper mailing)

This is a bad example; the text is very long and not related with the product.
The only good point is the use of small paragraph which facilitates the reading.
•

The major differences from traditional mail and e-mail writing styles:

Interview with François Demontagne, LaRedoute web copywriter and ex- paper copywriter:
(September 2003)
“All along the year we do a continuous piecework rate, reading our customers’ favorites
magazines. This leads to the seasonal establishment of a set of editorial rules we define
together. That helps us to always stick to our clients’ favorite writing style and keep a
consistence in what we say. As an example13, LaRedoute is now using a personal and
familiar writing style. Texts are written as if a customer was speaking. The use of “I”
prevails to help the customer place herself in the situation described by the texts and
imagine her with the products. This editorial guide is used for paper as for web copywriting,
but as you write for the web, you must be very synthetic and transmit only important
ideas using magic words of direct marketing and an inciting language. You must find the
good sentence. You must also be more intriguing…make the customer want to click to
learn more.”

13

Fil Rouge – Charte éditoriale PE04, LaRedoute


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Master’s Thesis


Figure 5 : good example of commercial e-mail copywriting. Newport News, September 19th 2003

This newsletter is a good example; it is easy to read thanks to two reading levels: (colors and
fonts are different). Small but explicit descriptions illustrate the pictures. Writing is inciting
and asks for action.
•

Reading on the web:

According to the web ergonomics specialist Jakob Nielsen 14, 80% of the web users do not
fully read web pages but only “scan” them. This goes in favor of shorter text writing.
You should only explain one idea per paragraph. Titles must be carefully thought of to attract
the reader into the paragraph. He insists in using the journalistic writing method of the
inverted pyramid. The most important ideas should be said first so that the web users
get a chance to read it. Only if he is interested, he will go deeper into the text.

(3) A believable and proactive style

The Call to action: a direct marketing technique essential for the email marketing:
14

Jakob Nielsen, Homepage Usability: 50 Websites Deconstructed


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Master’s Thesis


As the president of Red Door Interactive 15 says, “the call to action is the moment of truth for
each e-mail. The trust you have developed lets you tell people about special deals, offers or
sweepstakes and expect a more direct action. If you have built a good relationship with the
user, he will expect it, understand why it is there and react to it when he is ready.”
Many different communication techniques can be used in a traditional mailing or an email to
influence the customers and convince them to buy your products. You should use them as
they have been tested for many years, but they will work only if they look believable and if
you could be convinced yourself by what you tell your customers.

The main points to follow for writing the content of a newsletter:






Maintain a coherence between your images and your text
Choose a font optimised for screen reading (Verdana or Georgia)
Use short paragraphs and concise sentences
Tell the most important things at the beginning
Use a proactive style: push customer to act immediately

iii) The gift leaflet
The gift leaflet is a component of many mailings. It is a traditional direct marketing technique
to show in details the advantages you offer to customers. The leaflet presents the
advantages of your gift, using direct marketing “magic words” such as “free”, “for you”,
“exclusively” and seducing pictures of the gift.
Presenting a gift, especially if it’s free should always be as detailed as possible.
Should it be on a paper mailing or on the web, customers will read all the details to make
sure that what is showed on the picture is true and qualitative. Show it precisely, and present
every advantage, technical details and completions. Free gifts are always leading to doubt
for customers who are wondering what’s behind your product. You need to reassure them
about the gift’s commercial value; the warranty duration…This is important to present the
gift in details in a separate leaflet, because otherwise, the abundance of details would dilute
the commercial messages of the main letter.

15

Reid Carr, president and strategy director of Red Door Interactive, DMnews.com,

Aug. 29, 2003


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Master’s Thesis


Figure 6 : Gift description in a paper mailing

Precise as much as possible
the (positive) technical details
and finitions of the gift!

This same approach can be used in an email with the “micro-websites”. To precise some
elements of the newsletter without diluting the messages of the email, dedicated web
pages better known as "Landing Pages" can be created. As for traditional direct marketing it
is very important to give details of the products sold especially when they are free. A recent
study16 of French internet surfers says that 79% of men and 75% of women are searching
for product information before their purchase.

Link to open the details window

iv) The order form

Different views of the gift,
and associated detailed
description to reassure the
customer about its value.

16

l'Internaute Magazine, Septembre 2003-11-25
http://www.journaldunet.com/0311/031104enqueteconso1.shtml


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The purchase order must be easy to fill. It must have the same colors and design codes
as the rest of the mailing and be pre-completed with the most frequent options and
personalized with the name and surname of the customer. The emailing campaigns
should learn from this in simplifying the order process when order comes from an
email. The maximum should be done to avoid the customer’s hassle of filling long forms.

Figure 7 : example of an order form from a mailing from LaRedoute


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c) The communication principles of direct marketing
LaRedoute has many contacts with its customers each season (up to two in a month for
traditional mailing). Hence, this is very important to change the way of transmitting the
same basic message “buy our products!” to the same customers. This can be achieved
through varying the style of communication used to interact with the customer. The
goal is to wake their curiosity and to make them open the envelope. Communication in
direct marketing is a lot about being the best out of the mailbox to have a chance to avoid the
bin!

i) The entertaining communication style
The use of gimmicks (scrape-off games, cut and paste…) can help the customer find out all
the advantages of the offer. It is often a good idea to relate the use of an entertaining
communication way to special days: holiday, Christmas, Easter, Halloween…
This style of communication can use very developed visuals and texts, in relation with the
event. Original designs and good games ideas are welcomed.
Here are two examples of the use of an entertaining mailing campaign for Halloween
(LaRedoute France, October 2003), the design is clearly related with a special event
close to the customer daily life (Halloween). The communication is funny and uses a lottery
to entertain the customers.


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Figure 8 : examples of entertaining communication on paper mailings (LaRedoute)

This way of communication can be very efficient on the Internet thanks to the high
interactivity of this media. Gimmicks coming from the paper have been adapted to the
web: below are examples of “scraping game” made by a French web-agency specialized in
marketing games, www.touche-etoile.com.
More than just repeating what have been done offline,
web-games and gimmicks can go a lot further and are
often used as a good mean of recruiting new prospects
through virality. These games often ask information and
email from the participants and promote competition and
easy transfers to friends. If the game is funny and
launched at the right moment, this can bolster the
acquisition of prospects in a tremendous way: with the


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second version of its game, www.voyages-sncf.com acquired about 230000 email address in
only 15 days.
e-Scraping game for a German brand of bier

On the internet, games can be
more original or funny than basic
DM gimmicks.The goal is to attract
prospects via email virality.
But to be effective, keep them as
simple to understand as possible.
Games are often hosted on a
website (or a “micro-website”) and
can be accessible through a link
coming from a newsletter or from
the website’s home page.
Figure 9 : example of entertaining communication on the web

The website www.redoute.be used quiz and games thoroughly this year (2003) to celebrate
the company’s 20th anniversary. This was relayed in newsletters with “Jackpot orders” and
sweepstakes among others.

ii) The standard commercial communication
This communication technique presents promotions,
gifts or any other advantage proposed to the
customer. The communication way is direct and
loud: show your offer!
Use visible colors such as red and yellow, magic
words and promotional design so that the customer
catch your offer. Use a direct writing style: push the
customer to act now.


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As done in direct marketing for a long time, this is important to specify the main
advantages offered to the customers on the envelope. This is what drives up the opening
rate.

Email from: www.laredoute.co.uk
The subject is:
HURRY! Exclusive 48 hour sale
preview!
This could maybe be enhanced with
an indication of the advantage, for
example:
Hurry! Up to 35% off, exclusive 48
hour sale preview

Figure 10 : example of a commercial communication (www.laredoute.co.uk)

On the letter / email itself, this is also important to order the messages: the most
important should appear first. For emails, this is especially important because depending
on the software used to read e-mails, customers can preview the upper end of the email
through the “preview pane” before really opening the email. Moreover, if the customer has to
scroll down the e-mail to view some messages, these ones will be less viewed than the first
ones. However, this should not limit you to small e-mails: the web usability specialist Jakob
Nielsen17 has publicized in 1997 a web usability study which shows that the behavior of
web users has changed vis-à-vis scrolling down web pages:
According to him “the change from 1994 is that scrolling is no longer a usability disaster
for navigation pages. Scrolling still reduces usability, but all design involves trade-offs, and
the argument against scrolling is no longer as strong as it used to be. Thus, pages that can
be markedly improved with a scrolling design may be made as long as necessary.”

iii) The intimate communication style

17

Jakob Nielsen web usability Alertbox : http://www.useit.com/alertbox/9712a.html


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The objective of this communication style is to praise the client for an event where he lies
at the center: his birthday, the anniversary of his first order, his 10th, 25th … or 100th order…
any occasion to implicate the client in a personal relationship with the company. Here,
the writing style can be either official or conniving. This style of communication often uses
personalization and a great knowledge of the customer’s buying behavior. (Customer
seniority, total number of orders…).
The design often uses special honorific items: diplomas, medals, palms… and often uses
qualitative envelopes and paper.

Personnalisation :
Generally name /
surname

Original and
prestigious design of
the envelope (very
long) : bring the
customer to open it!

Prestigious sender:
The Customer
Relationship
manager signed the
letter for your
birthday !

Figure 11 : examples of paper mailing using intimate communication

This communication should also be used in e-mailing campaigns because it is highly
effective for traditional and develops a more personal relationship with the customer. But
this communication style implies more than basic personalization. As most of the
newsletters are “personalized” with the name and surname of the client, the Intimate
communication style must dissociate from other newsletters.
The example next page presents an email from the American mail-order company “Newport
News”. This is not a common commercial newsletter promoting products; instead, the
customer is invited to a “private” sale, for the “best customers only”. This technique gives


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consideration to the customer who feels privileged. However, the communication power
could be a lot enhanced if the name, surname and number of orders were displayed. Here
the assertion “as one of our best customer” is vague and the client can doubt from it. (I
received this newsletter without having ordered anything).

This event is
specific for the
customer.

Could be improve with a better
personnalisation (name & surname)
Figure 12 : example of a newsletter using a personal intimate communication (Newport News e-mail)

iv) The administrative style
This style refers to administrative correspondence: delivery coupons, tax letters…
The sender's name or department must be unusual and official (i.e. Gift Department,
General Management, Financial Department…) and the aspect of the design should be
very formal: use of black & white, listing extracts… A credible story should be created
to explain to your customer why they received this specific mailing. For example: send a
satisfaction questionnaire to your customers and explain them that to thank them for the time
they spent on it you are happy to give them a special discount on their next order.
To summarize, you should use personalization with a cold, formal copywriting and design.
Add to this an unusual sender. This communication style is often very effective because it
differentiates from the commercial advertising.


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Envelope Recto:
Official Style:
The customer tipically
differentiates this kind of
mailing with usual
commercial advertising.

All these "logos" and "stamps"
are of course only there to make
the look more important - official:
The customer should ask ? What
have I done? Why the financial
department is writing to me?

Figure 13 : examples of mailings using administrative communication

LaRedoute has recently tried to reuse this Administrative way for emailing campaigns. This
was a great success, for example with this e-mail sent in U.K., which resulted in more than
4,7% activation rate.


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A good example of
how personalization
can be efficiently used

This example shows how an original and
believable story can be used in
“administrative letters”. This one is
enhanced by the basic design of the email and the inclusion of a false
“Original Message” at the end.
=> Imagination is also possible –and
should be used- for emailing campaigns.

Figure 14 : example of an e-mail using official communication (www.redoute.co.uk)

Use the four communication styles of Direct Marketing to vary your contacts with
customers:
 Commercial style shows clearly the commercial advantages to the customers
 Entertaining style use gimmicks, games and a funny communication to
attract customers
 Intimate communication style used with personalization develops a personal
relationship with your customers. (ex. Birthday gifts)
 Administrative style use surprise and originality to boost orders

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d) Commercial offers techniques for traditional mailing and for emailing
i) Special-offers codes and contingency marketing
Mail-order companies such as LaRedoute use different techniques to promote their products.
As they often have a great knowledge of their customers they can adapt their commercial
offers to customers’ preferences. One of the most commonly used techniques is “specialoffer codes”. The customers are asked to give a “special-offer code” in the order form to
benefit from a specific price reduction or gift. This allows marketers to adapt their offer to the
demand, to the consumer, or to almost whatever. This is a typical case of contingency
marketing: why would you give one of your customers a 30% discount if you know she will
buy your product at -10%? With special-offer codes you are able to offer different
promotional offers to different customers to get the most of your products. This technique is
widely used in mail-order companies. For every order, many parameters are recorded to
know more about the purchasing comportment of customers and hence be more efficient in
offering them what they like and what they can afford. For example, some customers won’t
respond the same if they are given a special discount check or a gift of the same value, it is
hence possible to learn from customers’ purchasing behavior and adapt to it.

Figure 15 : use of a special-offer code in a mailing

To make it easier for the customer to fill-in the order, most mailing order-coupons have
pre-filled special-offer codes. On the figure 15, clients should only mark a checkbox. This
technique is one of the first to have been re-used for e-mailing.
Today, most of the commercial e-mailing campaigns that give a special advantage to
customers use special-offer codes. Doing this has two major advantages.


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 It is really easy to set-up:
Especially for mail-order companies that used the technique for traditional mailings for years,
the incremental cost of setting up such a tracking tool is almost zero.
 It is flexible and works for all channels:
Today’s direct marketing campaigns are “integrated”; they use many different channels to
relay the same operation. As an example, LaRedoute relays its operations with paper mailing
campaigns and e-mailing campaigns, and the customers can order using either the
telephone, the minitel® or the Internet. All these different Medias work well with a simple
special-offer code.

Figure 16 : use of a special-offer code in a newsletter ( www.gap.com)

ii) Specialized small catalogues and dedicated landing page
Another commercial technique used by direct marketers is the targeted sending or small
specialized catalogues. As an example, LaRedoute sends its "white" only to a specific
target of customers which is more receptive to this kind
of products.

Figure 17 : specific catalogue (la redoute "white")

LaRedoute's White catalogueue
for season autumn / winter 2003


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As the cost of printing and sending catalogueues is pretty high, it is indeed a good idea to
target their sending.
This technique use dedicated landing pages only accessible through a link from the email. This is more difficult to implement as you need to create a web page especially for
one e-mailing campaign (or one per group of customers if you have a different offer per
targeted group). This technique cannot be automatically duplicated on the other Medias
as it could be possible with a special-offer code. This is however a good mean to offer a real
advantage to your customers. They can get something different than just anyone else
surfing directly on the website. We can compare it to the small, specialized booklets
(catalogues) sent to targeted customers in traditional direct marketing. Of course without the
high cost of printing and sending such small catalogues. This advantage can also be
showed as a virtual private sale, as only those who received the email can access the
dedicated web-page. This comparison is the most frequent because of the reactivity of the
Internet. Special sales are often only available for a few days or hours. This can be seen
as a real privilege for customers as they can be sure of the availability of the products
before the sale is extended to all customers.

Can be enhanced with
personalization (name /
surname)

One click brings to a
dedicated preview of
the sales landing page,
only accessible via this
email


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iii) Transparent offer-codes links
This technique can be used on the web by writing the value of the special-offer code directly
on the link so that it is invisible for the customer. The special code will appear directly and
transparently into the order form as the customer coming from an email places an order.
This technique has the advantage of being easier for the customer who hasn’t to do
anything to benefit from the advantages presented on the e-mail. The other advantage is that
the code is not much sowed to the customer and chances are that it won’t be spread on the
web as fast as it could happen with basic special-offer codes.
There are of course drawbacks to this technique: new links have always to replace traditional
links in the newsletter and it can happen that the customer wants to benefit from another
offer specified by another special-order codes which will replace the one specified in the
links. A customer doing so will be surprised that the discount specified in the
newsletter will be discarded as soon as another is selected.

The use of special-offer codes is a good way to use contingency marketing to get the most from
your products proposing a different price to different customers for the same item.

e) The viral process, a danger or an opportunity?
i) Viral Marketing, how to get the best from the viral phenomenon
"The award for Internet marketing buzzword of the year goes to 'viral marketing'."
-- Iconocast, December 16, 1998
Viral Marketing can be defined as an ingenious way of free advertising that can boost the
traffic to your website. The reason it's called "viral" is because it works just like a virus. One
person gets your promotional material (ebook, article etc) and passes it on to as many
people as possible. But compared to a computer virus, it's not dangerous. Methods include
"refer-a-friend", "pass-it-on", "send-an-article", ecards, ebook distribution and many more.
There are ways of implementing a viral marketing strategy to virtually any website. And the
options are endless.18
18

Definition from the Internet Marketing Dictionnary :http://www.internet-marketing-dictionary.com/viralmarketing.html November 29 2003


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Master’s Thesis


Viral marketing is hence intended and well prepared actions taken to make a marketing
message spread like a virus to the largest possible population. But the viral process can also
be, and is often unintended. Internet and the e-mail have greatly developed this phenomenon
as it is nearly costless to transfer information to all your friends!
The viral phenomenon can be efficiently used to increase the effect of e-mailing
campaigns: you just need to tell the recipients they can freely forward the offer to their
friends and facilitate as much as possible this transfer. For example, Banana Republic
include a link in its newsletter to make it easy to transfer it to friends:
Click here to forward to a friend.

A click on this link opens the following window:


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Master’s Thesis


Figure 18 : Banana Republic “Forward e-mail to a friend”'s popup window; November 2003

More than just incitating the customer to forward your newsletter to a friend, such a tool
allows you to monitor the “virality” of your e-mailing campaign, as it is technicaly
impossible to track the number of e-mails that have been forwarded using the traditional
“forward” button of your customer’s e-mail software.

Figure 19 : Hotmail.com’s e-mail toolbar : (November 2003)

Figure 20 : Yahoo.com’s e-mail toolbar : (November 2003)

You need hence to incite them to use your forward button instead of their software’s.
Doing this will help you to track the virality of your campaign and to work to enhance it
through attractive and inciting messages. However, the figures you collect for “forwarded”
messages will have to be taken as under-evaluated because not taking into account emails
forwarded using the e-mail boxes’ “Forward” button.

As we have just seen, the viral process can be used to improve the efficiency of an emailing campaign, in a way that couldn’t be imagined for a traditional direct marketing
campaign.

ii) The dangers of the viral phenomenon:
As we now know, the viral phenomenon can spread your offer far further than you originally
intended. This can really be a problem when you target a very attractive offer to some
of your customer. If the offer is so attractive, it will surely be forwarded to many people and
hence go out of the company’s control. As mail order companies often try to get the most of
their customers through contingency marketing (a different price for a different customer),
this is not a good idea to loose the control the best offers as it can reduce your margin
and affect your brand image.


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The problem of viral marketing is due to the lost of control of your offer that can happen after
you launched a highly targeted, very attractive offer in the form of an e-mailing
campaign. If the offer is forwarded to only a few customers’ friends, this is not a bad thing,
because this is a good word-of-mouth advertising for your company. But the lost of control
happen when your offer falls into the hands of “promotions hunters”: consumers who
don’t care about your company but only about the special offer.
This problem is coming from the internet media. Before the internet, it was not possible to
disclose information at a very large scale without important financial means, especially if the
information was only true for a few weeks. With the internet, it is now possible to publish
information almost instantly, for free and accessible from almost all over the world
and some internet websites are specialized in disclosing special-offer codes.

Figure 21 : sample of banners of communities’ websites listing special-offer codes

These are some examples of websites that displays special-offer codes as soon as they are
appear. Some of them even propose newsletter to inform “promotion hunters” of the new
offers that have come up. Others propose to send an e-mail-alert when a new offer-code
appears for the selected companies.
Hereafter is the detailed example of www.CodeReduc.com, a French website displaying
special-offer codes from many well-known companies. The left column shows the 15 newest
promotions and the right column present users’ favorite reductions. (the screenshot was
taken on November 29th 2003).


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Master’s Thesis


Figure 22 : List of all special-offer codes proposed by www.codereduc.com's website

Figure 23 : details of a coupon from LaRedoute

The danger is especially true for very attractive offers such as this one which is 15€ + a
gift without any purchase minimum. For less attractive offer, such a “free” presence in the
web can be regarded as free advertising for your company, another advantage of the viral
process.
These websites are a danger for traditional paper mailing as well as for e-mailing, as is
not more difficult to add a special-offer code coming from a paper-mailing than from an email campaign: This is hence very important to include this constraint when you design
your multi-channel (outlet-paper-phone-internet) promotional offer.
To illustrate the importance of the phenomenon on brick-and-mortar companies, the
American supermarket chain Albertsons Inc. has recently stopped its multi-channel
advertising campaign using internet free coupons:
“Reacting to recent incidents of Internet coupon fraud, supermarket chains Albertsons Inc.
and Publix Supermarkets Inc. have started rejecting coupons that consumers obtain online


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and print at home. Albertsons said it has experienced some losses related to fraudulent
use of Internet coupons."19
Steve Boal, CEO of Coupons Inc., which operates the Internet coupon service Coupons.com,
said web coupons should have a low rate of fraud when used properly. The most important
fraud-prevention measure, he says, is to take Albertsons’ approach of rejecting all freeproduct coupons. “Using a free-product coupon is begging for trouble,” according to him.
To reduce the viral risk on the web, you can try to hide special-offer codes using landing
pages or transparent offer-codes links instead of simple special-offer codes, but this is
not bullet-proof as the links can often be displayed on the websites. The best way is to
allow the use of “high-risk” offer-codes for targeted clients only.

The viral phenomenon should be regarded as an important factor of your campaign, you
should design your promotional offer to benefit from it or protect yourself from its bad effects:
offers that are really costly to your company should be working only for the targeted
customers and blocked for anyone else. Don’t forget traditional paper mailing as they are
also vulnerable.

19

DMNews.com, Tuesday, September 30th 2003


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2) Tracking, Analyzing and Targeting
As we gave the basic principles of communication and commercial techniques for e-mailing
and traditional mailing campaigns, we should be convinced that it is much more efficient to
target our offering. Targeting can only be used once we know something about our
customers; therefore it is a necessity to use a tracking technology, and to analyze the data
collected.
In the following part we will first study the tracking technology used in traditional direct
marketing and see how it can be re-used for e-mailing. As an Internet media, the e-mail can
benefit from web technologies to track receivers’ behavior. All this will allow us to explain the
technology used to analyze the data coming from our customer database. This will finally
lead us to the targeting process, or how to get the best of our customers through a precise
database analysis.

a) Tracking customers’ order and behavior
i) Tracking the orders
Mail-order companies such as LaRedoute track the financial turnover of their direct
marketing campaigns for each customer, so that they can know more about them and adapt
to their behavior. The technique that is used is “special-offer codes”. The customers are
asked to give a special-offer code in the order form to benefit from a specific price reduction
or a gift (we talked about this in the first part of this thesis). It is hence easy to track
customers who ordered using the same special-offer code and hence have responded to the
same campaign.
(1) Tracking orders customer per customer

At LaRedoute, every customer has a single customer code. This customer code is created at
the first order and then customers keep the same customer code for all their future purchase.
When they make an order, should it be by mail, by phone or by Internet, they are asked to fill
in their customer code and a special-offer code so that their profile can be updated in the
customer database. With these two references, it is possible to retrieve the campaigns after
which they ordered and to know more about their purchasing preferences.


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Master’s Thesis


(2) Tracking and testing different targets in the same campaign

More than tracking the results of one campaign, this technique is also very helpful to track
different targets in the same campaign: the only thing to do is to define a different specialoffer code per target, keeping all other things equal. This is often used to test the reactivity
of different customer profiles (for example to distinguish French-speaking customer from
German-speaking ones in Switzerland). This technique is often used to test the validity of
different hypothesis or common sense “knowledge”.

ii) Tracking prospects’ or customer’s behavior
Special-offer codes can be used to track orders made by customers but are of no interest in
tracking the “behavior” of prospects or customers. What we mean by behavior is anything
else than making an order. It can be reading the catalogue, opening or not a mailing, clicking
on a link, calling the customer service...

(1) The advantages of Web technology: almost everything is e-traceable

This was possible to track customer’s behavior before the Internet, but this possibility was
indeed very limited because only feasible through human interaction. As every interaction
between the company and the customer can be recorded in a database, it is for example
possible to record each time a customer makes a phone call or writes a letter to the customer
service. This data is of course very important to track to be able to monitor the quality of
service and to optimize the customers’ satisfaction rate 20.

You can for example give a

special compensation to all customers who complained for an order delay.
Considering other behavior, more directly related with the marketing part of campaigns, such
as receiving a mailing, opening an e-mail, selecting a product..., behavior tracking really
appeared with the web technologies. Internet e-mail has the advantage over traditional
mailing that it is possible to track and record for almost any action taken by the customers or
prospects.
To be more precise, the following bullet-list gives details about what information is
“technically” traceable and recordable in an e-mailing campaign:
20

You can find additional information about call-centers in an interview with LaRedoute web call-center’s
manager in part 3,b


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Master’s Thesis


•

If the customer opened the e-mail or not

•

When he did opened it

•

How many times he opened it

•

To how many people he transferred it

•

If and which link he clicked

•

If and what he bought after the campaign

•

How much time he watched the email

•

In which city he stays at the moment he is reading his e-mail

•

When did he last visit the website

•

What kind of operating system, e-mailing software and web browser he uses

•

If and when a customer decided to subscribe/unsubscribe to the newsletter

The knowledge of customers and prospects is indeed greater as this information
accumulates over a longer period of time.
To make the comparison easier, the following table compares the information that can be
tracked in a traditional direct marketing campaign from what can be tracked in an e-mailing
campaign:
Direct Marketing E-mail marketing
is sent?
yes
yes
is received?
no
yes
is opened?
no
yes
Number times read?
no
yes
What is read (clicked)?
no
yes
What is Buyed?
yes
yes

This knowledge of the customers and prospects’ behavior is a great opportinuty for new
targeting possibilities to increase campaigns efficiency.
(2) Technical bases of the e-tracking technology

The tracking information possibilities we listed above are available thanks to five different
internet technologies, namely: log analysis, transparent pixel, server redirection, cookies, and
IP-to-location. I will try to explain how they work and how they can be used to track


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behavioral information from e-mail recipients. All this data should of course be linked to a
data-base related to customers/prospects personal information.
Log analysis: This technology is the basis of all the others. A web server (the software
which makes your website works) records different kind of information about incoming
connection to your website. The web-pages you accessed, your IP address and time of
connection are written on a “log file” in the web server. This means that you can retrieve the
IP address of all the persons that visited any page of your website and the time and day they
accessed it. As we are considering e-mailing and not websites analysis, this technology isn’t
useful alone, but with the transparent pixel technique.
Transparent pixel: A pixel is the smallest part of a picture on a computer screen. Today
most newsletter and e-mails use HTML to enhance the presentation of the message. HTML
is better-looking than basic text and can include images. These images are often not
included in the e-mail itself but instead hosted on a web-server which address is specified in
the e-mail (the URL of the images appears in the HTML code of the e-mail). When the e-mail
is opened, the images are downloaded from the web-server which records your IP address
and time of connection just as if you were visiting the website. As images can be long to
download depending on your connection, the technology often uses one small and invisible
transparent one-pixel image to record log-data.
Server redirection: This technology is used to record “clicks” on newsletters’ links. The
objective here is to make a difference from people who have been on the site on their own,
and people who accessed to the site from the newsletter by clicking on the links. To solve
this problem, the solution was to set the links’ target on the newsletter to a different webpage which cannot be accessed by another mean. This web-page only acts as an invisible
gateway through the real destination’s page and instantly redirects to the really wanted webpage. As the data recorded in the log file contains the name of the web pages accessed, It is
possible to retrieve persons who accessed the “redirection gateway pages” and then deduce
that they clicked on the corresponding link on the newsletter.

Cookies: Cookies are small files that can be set by websites and are stored on customers’
hard drive. They are often used to store data concerning the user’s session identifier. When
he connects again to the same website, he can be recognized. This technology can be used
to track the users’ passage on different web-pages and the date of their passage.


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IP to Location: This technology is still not efficient in Europe (in 2003) but is used in the
USA. The technology is simple: a database establishes the correspondence between IP and
countries and cities. As subscribers change from time to time, the database must be
updated. Companies who establish this database must hence keep a permanent relationship
with all ISP. The website www.IP2location.com is a good example.
All these technologies make possible to track personal data into a relational database and
gives us many opportunities to track customers and prospects behavioral evolution and to
imagine and create specific targets.

b) Analyzing the results and targeting
To optimize the global turnover generated by traditional mailing or e-mailing campaigns we
must maximize the number of orders and the turnover per order. Traditional Direct Marketing
has achieved this goal thanks to special-offer codes tracking and RFM (Recency, Frequency,
Monetary value) analysis. As we will see, e-mail marketing has been able to use the same
model but also added behavior analysis and targeting, thanks to the information available
through web technologies.

i) Customer purchase analysis
Analyzing your customers database begins to be important when your database is big
enough21 and your time and resources are not too restricted. The objective is then to
differentiate the promotional offers and the communication depending on the targets of
customers you have found.
The analysis of customers’ purchasing comportment has benefited from the very long
experience of mail-order companies. For example, LaRedoute has more than twenty years of
customer purchasing history with a database covering nearly 80% of the French families with
often more than a hundred data fields for each family. The customer database is hence
often considered as mail-order companies’ most important asset. The data is collected
and updated after each campaign, thanks to the “special-offer” codes we already studied.
21

"Big" is indeed very subjective, this "size" can be estimated in comparing the turnover increase between first,
sending one newsletter to all of your customers and then sending two (or more) targeted newsletters to distinct
sub-selections of your database. If this differences in turnover justifies the time spent to create, target and send
targeted newsletter to parts of your database, do it! At LaRedoute, we "think" that targeted newsletters are not
worth it when the customers database is less than 70-100 000 e-mails.


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Master’s Thesis


After several campaigns, it becomes possible to determine some characteristics of a
customer’s purchasing comportment and to try to determine some interesting and
frequent patterns in the clients’ database. Each customer can have a specific purchasing
behavior (order frequency, average order amount, average order quantity, reaction to gifts /
reaction

to

discounts…),

but

groups

of

customers

sharing

some

common

characteristics can be found thanks to statistical analysis. More than only finding such
groups, it is interesting to discover which variables have the most chances to determine
if a customer belongs to one group or another.
As a teacher at UCLA22 says, data-mining is primarily used today by companies with a strong
consumer focus - retail, financial, communication, and marketing organizations. It enables
these companies to determine relationships among "internal" factors such as price, product
positioning, or staff skills, and "external" factors such as economic indicators, competition,
and customer demographics. And, it enables them to determine the impact on sales,
customer satisfaction, and corporate profits. Finally, it enables them to "drill down" into
summary information to view detail transactional data.”
Data-mining has been used in a way or another (often with another name) in mail-order
companies with the objectives to enhance the performance of direct-marketing
campaigns thanks to more specific targeting. The most well known model used for direct
marketing is the RFM (Recency Frequecy Monetary Value) model.

ii) The RFM model (Recency Frequency Monetary Value)
The RFM approach is one of the most efficient ways to predict the future behavior of the
customers because it is based on their past and actual purchasing comportment. Tests have
been made that prove that a direct relationship exists between the chances of a future
purchase and the date of the three factors of RFM (the date of the last purchase, the
frequency of purchase, and the global amount already purchased).
A good explanation of the RFM approach is given by Jim Novo23 a marketing specialist:

22

http://www.anderson.ucla.edu/faculty/jason.frand/teacher/technologies/palace/datamining.htm
accessed on December the 5th , 2003
23
Jim Novo, Drilling Down : “turning customer data into profit”
http://www.jimnovo.com/RFM-tour.htm (accessed December 6th, 2003)


Page 46

Master’s Thesis


First, mail-order companies ranked all their customers on these 3 attributes, sorting their
customer records so that customers who had bought most Recently, most Frequently, and
had spent the most Money were at the top. These customers were labelled "best".
Customers who had not purchased for a while, had made few purchases, and had spent little
money were at the bottom of the list, and these were labelled "worst".
Then they mailed their catalogues to all the customers, just like they usually do, and tracked
how the group of people who ranked highest in the 3 categories above (best) responded to
their mailings, and compared this response to the group of people who ranked lowest
(worst). They found a huge difference in response and sales between best and worst
customers.

Repeating this test over and over, they found it worked every time!

The group who ranked "best" in the 3 categories above always had higher response rates
than the group who ranked "worst". It worked so well they cut back on mailing to people who
ranked worst, and spent the money saved on mailing more often to the group who ranked
best. And their sales exploded, while their costs remained the same or went down. They
were increasing their marketing efficiency and effectiveness by targeting to the most
responsive, highest future value customers.
In practice, mail-order companies use the time-span of a commercial season to observe the
Frequency and Recency of orders. For LaRedoute and 3 Suisses, the customer is viewed
within a 4-seasons time period. For example a very good customer in terms of Recency –
Frequency has ordered during the last season and the three past seasons:
In practice, mail-order companies use the time-span of a commercial season to observe the
Frequency and Recency of orders. For LaRedoute and 3 Suisses, the customer is viewed
within a 4-seasons time period. For example a very good customer in terms of Recency –
Frequency has ordered during the last season and the three past seasons:
Season n
Good RF Customer Yes
Good F Customer No

Season n-1
Yes
Yes

Season n-2
Yes
Yes

Season n-3
Yes
Yes

The main objective set by RFM model (as well as other ones) is to define different segments
of customers who respond differently to direct marketing solicitations. This segmentation will
help marketers to build their seasonal commercial planning according a different importance
to different customer segments.


Page 47

Master’s Thesis


The following figure is an example of a marketing application of the results given by an RFM
analysis of the customer database. The database is cut into three different segments, and a
different commercial planning and strategy is done for each of the segments.

Figure 24 : Targeting process and commercial planning based on an RFM segmentation

Best
RFM
Clients

DM pressure is
more intensive
for client with an
above average
ROI (return on
investment).
More catalogues
and mailing sent

1/6th of
the
database

8 mailings per season with
no minimal discount

Average per season with
5 mailings RFM customers
no less than 25% discount

2/6th of
the
database
DM pressure is
less intense (less
frequent mailings)
but offers are
more attractive

Worst RFM customers
2 mailings per season with
no less than 40% discount

3/6th of
the
database

As Jim Novo says, the Recency Frequency Monetary Value (RFM) model works everywhere,
in virtually every high activity business. And it works for just about any kind of "actionoriented" behavior you are trying to get a customer to repeat, whether it’s purchases, visits,
sign-ups, surveys, games or anything else. This is interesting to use this well known and
tested model for e-mailing campaigns.

iii) Behavior analysis
As we already know, it is possible to track events concerning a newsletter thanks to web
technologies. Another great advantage of e-mailing over paper mailing is that the first results


Page 48

Master’s Thesis


come immediately. If the campaign is launched within a good timing (during the morning for
example), the first results will be available during the afternoon.
(1) The opening rate

On the next graphic we can see the evolution of the opening of a newsletter, which was sent
between 10 a.m. to 11p.m. The figure 26 shows that almost all of the campaign’s opening
results are available in only one day. This information is interesting to track as it allows
marketers to confront opening rate and time and to check what time or period gives the best
performances.

Figure 25 : date of beginning and end of the sending of a campaign

Figure 26 : evolution of the opening of an e-mail campaign, from 10 a.m. 2 a.m. the next day

The overall opening rate is the best indicator of the efficiency of subject lines. It is hence a
good idea to separate a campaign into different batches with a different subject line for each
batch so that you can compare the opening rate of different subject-lines. However,
marketers should be careful in sending the batches at comparable times and dates to avoid
the influence of external factors.

(2) Click-through analysis
Information concerning the click-through rate on the web links placed on different elements of
the newsletter is useful in many ways:

 It gives marketers information about the usability of the designed newsletter. Some
places on the screen are not “seen” by users, some links are not perceived as such and
are rarely clicked.
 It gives a quick glimpse on what attracted customers the most. Some commercial
newsletter gives access to different products selections or boutiques, and it is
interesting to now which one worked best less than a day after.
 It is a good way to check the quality of your subject line: a good opening rate is good
but not sufficient and a small click-through rate following a good opening rate is often
due to misleading or deceptive teasing subject-lines.


Page 49

Master’s Thesis


Figure 27 : Click rate repartition in a newsletter

(3) Unsubscribe rate

The unsubscribe rate is useful to monitor the interest subscribers take to your newsletter. This
is important to remind that this rate can’t be considered as reliable because it only tracks
users that clicked on the “unsubscribe” link placed at the end of the newsletter but don’t track
the majority of users who simply delete the newsletter as they receive it or place it in their
Spam folder. However, marketers should follow the evolution and react if the rate is growing
in an abnormal way. There are mainly two ways to respond:
 Change the content:
People subscribe to newsletters for different reasons; marketers should try to stick to these
reasons. Make polls to know what kind of content subscribers like the best.
 Change the sending rate:
If you are sure of the adequacy of your content and you still see the unsubscribe rate fall, then
reduce the sending rate.


Page 50

Master’s Thesis


Figure 28 : sending rate analysis for a newsletter

As we talked before, many other indicators are traceable thanks to web technologies. The
most interesting among them could be the soft-bounces rate and the hard-bounces rate,
which should be calculated separately domain by domain so that marketers can control the
false positive24 problem due to ISP’s black-lists.
As we went into some (and not all) of the behaviour indicators that can be traceable we will
now present targeting strategies that can be made thanks to this helpful information.

iv) Behavioral targeting
We can use the behavioral information we got from customers and prospects to create
targets as we did with customers’ purchase information. We will only show real examples of
what can be done thanks to this information, but there is a lot more target to try as this way of
doing things is quite new. In fact, traditional mail-order companies are still mainly using RFM
segmentation and targeting to stay coordinated between e-mailing and paper mailing. The
use of behavioral information for targeting purpose is quite a new way of thinking because it
is “web-only” by nature and no experience can be reused from traditional direct marketing.

24

False positive means permission-based e-mails that are filtered by error by Spam filters. This problem will be
discussed in details in part 3 of this thesis.


Page 51

Master’s Thesis
•


Catalog-order tracking:

This operation has been launched in autumn 2003 for Spain, Belgium and Austria’s e-mailing
campaign. The objective is to track the prospects that went on the website and asked for a
catalogue.

Figure 29 : Links to order the catalogue (for free) on AT and UK's web-sites

This target considers all the prospects who ordered a catalog book on the website one month
ago. The Hypothesis is that if they ordered (and received) the catalogue, they are potentially
interested in LaRedoute’s products and could be easier to transform than any other prospect.
Three weeks after they ordered the catalogue on the website a specific e-mailing as shown
in figure 30 is sent to them with a commercial incentive (a gift or a discount) for their first
purchase on the website.


Page 52

Master’s Thesis


1) No shipping costs :
For your first order via Internet
on the winter 2003 collection

2) Free when you order
To thank you for your first
order on the winter 2003
collection, we are pleased
to offer you this trolleybag for free!

Figure 30 : newsletter sent only to people who ordered the catalogue and didn't purchased anything yet

Results from this targeted e-mail (in terms of transformation rate) are three times better than
average campaigns sent without particular targeting.

Here is another example from www.houra.fr a French online supermarket. This e-mail
campaign is targeted to prospects that begun to create a shopping-list and stopped before
making their purchase. This e-mail offers them free home delivery for their first order.


Page 53

Master’s Thesis


Hi Gaetan,
Bravo, you recently made
the first step toward the
end of “hassle shopping”
with the creation of your
account at houra.fr.
Here is a reminder of your
personal account.
Make now your first order
without stress.

Figure 31 : e-mail targeted to prospects that created their account (and begun a list) but didn’t made any
order.

The last example of an e-mail using “behavioral target” comes from voyages-sncf.com, a
French rail and plane travel website. Here the objective is to enhance the image of the
company in stopping sending e-mails to people who don’t open them. The target is defined
as people who didn’t opened the newsletter more than N times in a row.


Page 54

Master’s Thesis


To read urgently !

Watch out: read this carefully!
You chose voyages-sncf.com to
prepare your travel…
… we want to be sure that you
still want to benefit from this
newsletter.
For this, please confirm that you
still want to receive our
newsletter by clicking on this
link…
If we don’t receive any news
from you during the following
15 days, we will consider that
Figure 32 : newsletter sent to a target of prospects that never open the newsletter. you are not interested and we
will stop sending you our
newsletter…

Both customer purchases analysis and behavior analysis should be used. But as
RFM analysis and segmentation has proven its efficiency to activate and get the most
from existing customers, targets created after a behavioral analysis is often the best
way to transform prospects into customers.


Page 55

Master’s Thesis


v) Towards a multi-channel data-mining and targeting
As I. Marcotte25 explained, at the beginning of the web activity of LaRedoute, it was
important to know more about the internet shoppers, and statistical analysis were
realized that showed a recurrent profile for the web shoppers. They were often “Young
working mother with children.” This wasn’t the same profile as LaRedoute’s general
customer database (catalog and shops). This resulted in a choice to create a different
customer database for web customers.
At this stage, a separate commercial planning was made for the web-shoppers so that
LaRedoute’s e-mailing campaigns were more precisely targeted to their profile and not
blindly following the general paper catalog commercial planning.
However, as I. Marcotte explained, a great change occurred recently in the customer
analysis: “as the e-mail database was growing fast and the fact of having an e-mail
address was becoming more ubiquitous, the reasons to keep two different commercial
planning were less obvious. In 2003, many catalog shoppers also shop on the website
and this was not true three years ago. This transformation in the behaviour of the
customers is mainly due to the growth of the internet usage. Internet is replacing the Minitel®
as a new mean to place an order and customers who before only used the catalog are
beginning to discover the advantages that can offer a website. In the meantime, the services
offered by the website are more valuable now than ever. It is now possible to try-on clothes
on the virtual model®, a 3D model which can be personalized to reflect your personal
measurements. You can also browse all the catalogs online, benefit from private flash sales
and many other services.
Even though the web-shoppers typology that was done in the year 2000 is not yet out of
date, web-shoppers’ profile is loosing value because it includes multi-channel shoppers
which are going to constitute the majority.
Channels (in %)
Mailing
Phone
Minitel® Audiotel
Internet
Other

1998
53,2
33,2
10,4
-

1999
53,2
34,4
9,1
0,5
2,8

2000
53,5
34,5
7,5
1,5
3

2001
53,5
34,3
7
2,4
2,9

2002
48,9
33,5
5,9
8,8
2,9

Figure 33: Evolution of the different channels of order for French home shopping companies, source:
FEVAD 2002
25

This information comes mainly from an interview with Isabelle Marcotte who is www.laredoute.fr’s web
analyst, in October 2003.


Page 56

Master’s Thesis


As we can see from the table (figure 33), in the year 2002 the use of phone, mail and
minitel® to place an order decreased. This fall has been compensated by the
exponential growth of the Internet as a new efficient mean to order. In the U.S., the
phenomenon is much more visible: “channel shift among marketers who have both
catalogue and Internet sales became more pronounced in 2002. Online sales totalled
30% of catalogers’ sales in 2002, up 25% from 2001, when the proportion of online sales
was 24%” 26.
This trend shows that a customer can place one order using the Internet and then another
using the telephone. This same customer will be in the internet customer database and in the
traditional mailing database. This has hence been important to synchronize the two
commercial planning, so that one media won’t interfere with the other. What would you do if
you receive the same day a 30% discount by (traditional) mail, and a 20% discount via email? Even though they are different Medias, direct-marketing campaigns and e-mailing
campaigns have been organized and planned to work together and to give the best results.
This idea of synchronous direct marketing – e-marketing has been tested and approved in
these last two years (2001-2002) by many marketers.

SBC Analysis Finds Integrated DM Works Best

27

“Synchronized direct mail and e-mail marketing messages double conversion rates over the
solo use of either tactic or banners at telecommunications giant SBC Communications,
according to a recently completed analysis by online technology firm CentrPort and agency
Rodgers Townsend.”
In France, LaRedoute tested this hypothesis extensively in 2001 and compared four cases.
Before each mailing, four targets were selected, as showed in the following table.

26
27

Spring 2003 Catalogue Industry Trend Report, DoubleClick, July 15, 2003
DMnews.com’s newsletter of Sept. 25, 2003


Page 57

Master’s Thesis

Paper mailing
E-mail
E-mail overpressure
sent 2 weeks after

Target 1
yes
yes

Target 2
yes
no

yes

Target 3
yes
yes

yes

no

Target 4
yes
no
no

Figure 34: Tests of multi-channel direct marketing campaigns

The results were clearly in favour of the first target which confirmed that “integrated
direct marketing – e-mail marketing” works best.
However, this conclusion is not to be taken as-is: the Internet media have new possibilities
that can’t be easily reused in a static media like the paper catalogues/mailings. For examples
e-mailing (alone) have been used to promote the virtual model® on the website or to launch
flash sales of 24 or 48hours only… These techniques can only be used on the web and
justify the use of a specific web-targeting process.

Marketing operations that only involve non media-specific content should be used both in
mailing and e-mailing campaign, in a coordinated manner. Hence data-mining and targeting
should not be media-specific. However, Internet offers new ways of interaction with the
customer that cannot be reproduced in a paper format, it is hence also valuable to keep doing
media specific data mining and targeting.


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Master’s Thesis


3) Sending and making sure it arrives to destination
We already viewed how to analyze our customer database to get the most of the commercial
planning thanks to the use of more precise targets. We will now give elements to optimize
the sending process.

a) The importance of timing
i) The best months
Timing of the sending process has been studied for a long time in Direct Marketing. It is
well known that the best moment to launch a campaign is in January, shortly followed by
February, October and November. The months to avoid are the summer holidays: July
and August.28 Concerning e-mailing, no truth has yet been found, but e-mail addresses
have a great a, coupled with the fact that most home-shopping companies propose 24 or
48hours delivery, allows customers to place orders during their holydays.
For the U.S. home shopping company Shadwick’s, “the period of Sales and Christmas
time are the most interesting. In Europe, apparel is the first gift offered and people buy
much more and later in season on the web, as they are expecting deals”29.

ii) Choose your day
A great advantage of e-mail marketing over traditional mailing is that the transmission of emails is almost instantaneous. You can ensure that your campaign will be received, if not
the next hour, at least the same day you launched it. This advantage gives the opportunity
to send newsletters on time for special days like mother’s day, St Valentin day, or to be
sure not to miss customers birthday.

Figure 35:
newsletter received
Halloween’s day

28
29

the

Yan Cleyssens, « L’e-mail marketing », p.183, DUNOD 2003
Florian Jacquier, Redcats international, e-mail discussion, November 2003


Page 59

Reusing direct marketing strategies for email-marketing campaigns

Reusing direct marketing strategies for email-marketing campaigns

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