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

Abstract

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

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