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Saving Money in Your Startup — Part 4

pennies

How to use email marketing to grow your small business.

 

If you’re a small business owner or entrepreneur, you’re constantly searching for ways to reduce expenses, increase revenue, and do things more efficiently.

That’s why it’s time to step up your email marketing game.

We all feel overwhelmed by email. But there is a legitimate reason why Macy’s, Outback Steakhouse, and GoDaddy are still emailing you — years after you last did business with them. And while you might find their emails a nuisance at times, they’ve managed to stay in your good graces enough that you haven’t unsubscribed from their mailing lists.

While that’s fine for Macy’s, why should small business owners or entrepreneurs want to be emailing their customers and prospects?

Because the return on investment (ROI) of email marketing is 40 to one, according to The Direct Marketing Association. That means email marketing brings in $40 for every single dollar you invest in it.

Yes, you read that correctly.

So if you do one thing for your business today, get started on your email marketing. There are four basic steps, and we’ll look at each in detail:

  1. Start capturing email addresses, and build an email list
  2. Choose an email marketing provider
  3. Create and send correspondences to your list
  4. Test, test, test!

Step 1: Capture Email Addresses and Build Your Mailing List

Building an email distribution list is essential to running an effective email marketing campaign and growing your business. After all, without a list of email addresses to send to, your email marketing strategy is worth zilch.

Lists are valuable because they allow you to keep in touch with people who want to hear from you. (Then it’s up to you to keep them interested so they don’t unsubscribe.) Email list building is an incredibly efficient and cost-effective way to increase brand awareness and grow your business.

The simplest, most common way to collect emails is to create an opt-in form on your website, where users can sign up to receive your newsletters, promotions, and other email communication. The email provider you select (see Step 2) will have tools to help you embed this on your site.

However, this is a passive approach. To build a substantial list more quickly, you’ll want to try a combination of methods. Here are a few simple ideas to help you get started:

  • Create an opt-in form on your website.
  • Start blogging or writing a monthly newsletter about what is going on in your industry or community. By becoming a trusted voice in your field, offering valuable and helpful insights, people will want to hear from you. Make sure to strike a balance between self-promotion and the value you offer to readers — and include a link to your email sign-up.
  • Display (and direct attention toward, when possible) email sign-up sheets at events and conferences you host.
  • Include a link to your website and sign-up form in your email signature.
  • Offer a one-time discount for customers who sign up for your list and promote it on social media channels.
  • Push your newsletter or blog content to social media.
  • If you have a bricks-and-mortar location, keep an email sign-up sheet by the register.
  • Your receipts (email or paper) can also include links to gather email addresses from customers.
  • Test, test, test: Keep track of which sign-up channels convert most effectively, and expend more energy on the ones that work best for you.

Be sure to explain to people the value they’ll get from signing up for your list, newsletter, or mailings. Will they receive special deals? Invitations to private sales or events? Insightful industry commentary? Obviously, the more value people expect to receive, the more likely they’ll be to sign up.

One of the beautiful things about email marketing is the ability to create a drip campaign and send people in your database a series of emails spaced out at intervals to maintain a steady relationship and create what’s called “top of mind awareness” (TOMA). The emails can and should be customized based on what list people signed up for.

For example, your newsletter list may be different than a list of existing clients, and each should receive different communications targeted toward their interest or involvement with your business. Some people may be on multiple lists and that’s okay.

If you’re trying out email marketing for the first time, don’t let the idea of managing multiple lists confuse or intimidate you, just get started! It’s perfectly fine to start with one list. Anything is better than nothing, and you can always add to and tweak your marketing campaigns and lists as you grow — indeed, you should!

Step 2: Choose an Email Marketing Provider

So how do you get your email marketing campaign going?

While there are dozens of names out there to choose from, we’ve scoured services near and far and narrowed it down to the only two you need to think about: AWeber and MailChimp.

One costs money, the other is free!

Both have pros and cons, and either one will get you going in the right direction, but we hope to save you time, money, and a few mistakes by outlining their services in a bit more detail below.

And yes, I know there are many, many other email marketing programs out there. But today’s goal is to save you time and money so you can get back to running your business.

AWeber

Many consider AWeber the leader in online marketing services (I’m one of them), so it’s only fitting to start with them.

It’s the choice for many of the world’s top Internet marketers and businesses and its roots go all the way back to 1998, which makes it a dinosaur in the online world. It’s a trusted name in Internet marketing, and their customer service is best in class. If you don’t have time to research which company to go with, and you have a couple hundred bucks a year to spare, pick AWeber and just get started, and watch your business and customer engagement skyrocket!

Pros

  • No long-term contracts — month to month subscription.
  • Easy to navigate and setup.
  • 700+ templates and 3,000+ stock photos you can use.
  • Easy-to-understand analytics.
  • Ability to easily segment lists and send targeted email messages.
  • Knowledge Base: community forum meets FAQS. Knowledge Base is packed with how-to guides to answer most questions that come up.
  • Best-in-class customer service and a phone number to call if you don’t find the answer you are looking for in Knowledge Base.

Cons

  • Increasing costs as your subscriber list grows.
  • $19/month + subscriber costs: 0-500 subscribers = free, 500-2,500 = $10/month, 2,501-5,000 = $30/month
  • Slightly more expensive than comparable services (or free ones, obviously). But if your list is growing, the ROI and value of marketing to them should be increasing, too (if you’re doing it right).

Overall, AWeber is a fantastic service, and you won’t be disappointed. If you pre-pay for a year, you save $34 ($194 fee for 12 months). It’s a great investment for what this service can do to help grow your business. There is a reason it was the first on the list.

That said, if money is extremely tight, and you don’t have an extra couple hundred dollars in the budget, keep reading: There’s a free option on the market.

Mail Chimp

MailChimp is an email marketing service founded in 2001. It has 7 million users that collectively send over 10 billion emails through the service each month, according to the company’s website.

MailChimp may be the most economical choice for your business — it’s free to use up to 2,000 subscribers! — and, no beating around the bush, that’s their hook. Good marketing on MailChimp’s part, as they assume that once you sign up for their free service, you will be happy enough not to change providers when you reach 2,001 subscribers — and often times they’re right.

We currently use MailChimp for one of my nonprofit businesses, with a list of about 1,500 subscribers. Our emails consist of a bi-weekly newsletter (it’s a nonprofit so we’re not selling via email marketing, just using it as a tool for branding), and we will likely stick with MailChimp once we cross 2,000 subscribers as it meets our needs for the business. And truth be told, we don’t want to deal with the hassle of switching services. (See? It’s a real thing!)

That being said, given the return on investment email marketing provides, there’s more to look at than saving $30 a month when you’re picking your email platform. (AWeber is a better overall choice, in my opinion, if you want to run a comprehensive email marketing campaign.)

Pros

  • 100% free up to 2,000 subscribers, so it’s a great way to get started. If you don’t have a list yet (start today!), it’s going to take you a while to grow your list beyond 2,000 subscribers, so you can learn and practice the basics of email marketing for free as you grow.
  • No contracts, and no credit card required to get started.
  • If you don’t expect to build a list of more than 2,000 subscribers, it will always be free. For the small, budget-sensitive startup, this may be the choice for you. (Pricing above 2,000 subscribers is comparable to AWeber.)
  • Great for beginners: Lots of free tutorials that explain email marketing concepts and how to make the most of the site’s features, including an entire library of how-to videos.
  • Good looking and easy-to-use templates.
  • Perfect for a newsletter and raising brand awareness.

Cons

  • You run the risk of getting sucked in by the free offer, even though it might not be the best fit for your business beyond 2,000 subscribers.
  • There’s no free auto-responder, an important email marketing function that allows you to automatically send out a predetermined message (or even an entire series of emails) triggered by a specific action or date — for example, a new subscriber welcome, a purchase confirmation, or a birthday discount. MailChimp does have an auto-responder service, but it is a paid feature, meaning you’ll have to pay to upgrade your account. If you’re selling a product or service, and most of you are, a quality auto-responder is important.
  • Since it’s free for most users, MailChimp unfortunately slacks on customer service. Customer service is through email only, and you may have to wait up to 24 hours for a response. Is that important to you? It’s something to consider before signing up.
  • Not as good as a sales funnel and for converting prospects to paying customers, in my experience.

If you just need a newsletter tool, or you’re just getting started, MailChimp may be the choice for you — and you can’t beat the price!

It could take months or years before you outgrow the 2,000 subscriber limit, so you’ll be saving your startup some fixed costs as you learn and experiment with the e-marketing process. As your business grows and gets more dynamic, you may want to expand your e-marketing horizons, but this is a good way to start out, especially if you’re going to use email marketing primarily for a newsletter.

If you do grow your list beyond MailChimp’s free 2,000 subscriber threshold (good work!), and decide that you want the more sophisticated service, Aweber offers a guide to importing your lists and templates from MailChimp, so don’t feel like you’re trapped.

Compose and Send

Start an email list: check. Select an email marketing service: check. So what do I send to my list?

That all depends.

Pick something that is relevant to your customers or prospects. Offer them something of value. Do not oversell.

If you are just getting started with email marketing, a monthly newsletter is an easy and effective way to start. You can write your first newsletter, set up MailChimp, and start building your email list before midnight tonight.

At an absolute minimum, you should be using MailChimp and sending out a monthly newsletter. It’s free. There are no excuses not to.

If you believe in the power of email marketing and are willing to drop a few hundred bucks a year and invest the time to master it, keep reading.

You send them your monthly newsletter. Send them updates when you have new products or services, a new blog post, or information on a sale or special promotion. Create a sales funnel (via a series of well-timed, killer emails, sent systematically using an auto-responder) to convert prospects into customers and customers into repeat customers. And repurpose this content by promoting the hell out of it on social media channels.

You can and should segment your lists based on a number of different factors, such as where they signed up or the last time they made a purchase, and send different content to each list if appropriate. For example, there’s no need to send an introductory offer to your longtime customers, or a sales pitch to industry peers. Continue to segment your lists and customize your messaging as you gather more data — by split-testing, which we’ll cover in a bit.

So What Makes a Killer Email Campaign?

Think of email marketing as building a relationship digitally with your prospect. The focus is trust, education, testimonials, and answering question. Allowing the prospect to evaluate other options (market research), and provide links and contact information to allow your prospects to find more information, contact the company, or purchase your products or services.

Here is a potential series of emails you could send to a list of subscribers — via auto-responder — that signed up to learn more about solving a problem they have, while gradually aligning them with your product or service as a solution:

Email No. 1: Say hello and make an introduction. Be personal. Include their name and your name to give it a human touch. Be friendly and explain what’s in in for them (the reader). Solve the problem you promised you would.

Teach them and, if possible, provide testimonials from existing clients who are happy with your services to build trust. It’s okay to include links (preferably to more education, tools, resources, or testimonials), but the focus should be on building trust and the relationship — not selling them anything at this point).

Also, it’s smart to let them know you are going to be sending them more emails and bullet what those emails will be about. An educational series is an extremely effective technique for email marketing campaigns as you educate, build trust, and even get your prospects looking forward to your next lesson-like email to get them opening your emails! Open rate is a key metric in determining the success of your email marketing campaign.

Email No. 2: Again the focus should be on education, testimonials, and building trust. Acknowledge your prospect has some hesitations and questions about your product or service that need to be overcome before they will be ready to buy. Customer testimonials that address the common fears and questions of a buyer go a long way to build trust with your prospects. Encourage them to do market research, but mention that the next email from you will cover market research.

Email No. 3: This will focus on market research. This email can be of huge value to your reader if you go ahead and do the market research for your prospect in advance. Be honest about the risks and potential rewards of your product and service, and the options of competitors. Remember, customers are turned off by offers that sound too good to be true. Want to build trust? Be upfront about the risks and who your product or services are a good fit for.

Email No. 4: Teach them how to best use your product or service. Continue to teach, educate, and share testimonials. Emails are a great way to address the frequently asked questions people have when looking to purchase your product or service. An education-based selling approach will deliver information to your prospects to help them make a buying decision after you guide them on how to properly assess if your product or service is a fit for their needs.

This is just one potential series of emails designed to build trust with your prospects. Be sure to include links to buy and contact the company, as prospects will be ready to buy at different stages of the email sequence.

Again, learning to review reports and analytics will tell you which emails were opened, by whom, and which links got someone to click on them. You should be continuously updating content and testing new copy to try to improve open rates (the percentage of people on your list that opened your email) and click-through rates (the number of links in the emails that were clicked). At a very basic level, keep in mind that your prospects need to open your emails and click through to your website to buy something.

The Importance of Subject Lines

Subject lines are a key component of open rates. If you’re like me, you have an email problem. It’s not a problem of your email malfunctioning, but rather a problem of getting so many emails each day it’s hard to get to them all. One of the things I request of clients and co-workers is to use unique and specific subject lines.

Why is this important?

As we scroll through our smartphones or Gmail inboxes, we make split-second decisions on which emails to open based on subject lines. Generic subject lines with your company’s name will not help your open rates.

Focus on the problem you are solving, the pain point, or the solution and education you are providing for the reader. If you can answer your prospect’s WIIF (what’s in it for me?) questions in the subject line, you’ll see your open rates skyrocket. Another effective way to improve your open rates is to deliver killer content that prospects have been prepped to look forward to from your previous emails.

Test, Test, Test!

Because it can be targeted, customized, and tracked, email marketing is one of the most effective marketing channels out there. Regardless of what service you select, learn to split test, read reports, understand the data, and make changes to your marketing accordingly.

One of the best parts about email marketing is that you know, to a tee, who opened your email, when they opened it, and which links were clicked on (click-throughs). That is invaluable data to your company.

Here a simple example: Let’s say you have an email list of 1,000 subscribers. When you have an email ready to send, send it to 250 people on your list with one subject line, and send it to the next 250 people with a different, more creative, email subject line.

Then sit back and see which one worked better. Maybe batch A had a 30% open rate (the percentage of recipients who opened the email), but batch B only had a 5% open rate.

Which subject line do you want to use for the remaining 500 people on your list? The subject line from batch A of course.

This is a very basic example of split testing — using two variables to see which one performs better. With analytical tools provided by the email services you can do amazing things with testing. I’d encourage you to continuously use testing to see what works best and constantly challenging yourself to improve open rates and click-through rates.

Using your analytics will also help you better segment your lists based on who’s opening your emails, who’s clicking which links, and who’s making what types of purchases.

Like anything else, you will get better at email marketing over time — especially if you follow the mantra of test, test, and test.

Summary

Your business needs an email marketing strategy. Despite the volume of email we all receive, email is one-on-one, and everyone uses it, so the inbox is a powerful way to reach people.

To begin, focus on building a list and delivering something of value to your subscribers.

Whether you use it for product promotion, up-selling existing customers, company branding, or even just a monthly newsletter, invest the time to select and learn an email software service. If you don’t want to drop a dime, MailChimp will get you started for free and will remain free as long as you have fewer than 2,000 subscribers. Be aware that you may want additional features as your business and lists grow, so don’t be too quick to jump at the (free) price if another service is going to be a better fit long term. AWeber is my recommendation for the best overall value if you are willing to spend a couple hundred bucks a year on marketing — and based on the incredible ROI of email marketing, it should be a no-brainer.

Once you get up and running, continue to build your list, use split tests when you send out campaigns, learn to understand the reports and analytics, and make data-driven adjustments to your approach.

Good luck, get started today, keep improving, and watch your business grow!
Now that you have a marketing pipeline going, you should be on your way to making the cash register sing. In our next post, we’ll take a closer look at money-saving accounting tips for small businesses.

 

Part 5: Click Here

 

This was originally posted on The Simple Dollar.
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