Karl-Philip Lund: Email is the most profitable activity for online stores
Email expert Karl Philip Lund explains what Norwegian online stores can learn from Barack Obama and Jeff Bezos.
Karl Philip Lund is an advisor at Inevo, and has worked as a marketer for Norwegian Air and delivered services to Amazon. In 2008, he closely analysed Obama's internet strategy, which resulted in a highly interesting article called The Perfect Internet Strategy, leading the Labour Party to seek his help during the 2009 election. Email was a key factor.
Lund is perhaps one of Norway's strongest advocates for email, but not everyone listens to what he has to say. He points out that very few Norwegians actually understand the value of email as a marketing channel:
– I sat on a panel with several top executives in the travel industry, and told them that the largest online stores get most of their revenue from email marketing. They laughed! For me, it was an eye-opener that this is the reaction you get.
Little knowledge about email marketing
Jeff Bezos, the founder of Amazon.com, dethroned Bill Gates as the world's richest man in 2017. Lund points out that this success is largely built on email.
– One of the first projects I worked on after my studies was email marketing for Amazon. For those who have followed Amazon, it is the world's leading online store, and Bezos is called an "email marketing mastermind"! From the very start, he has been hooked on email. That is why I find the negative reaction from Norwegian executives so fascinating.
Lund tells of two employees at Inevo who wrote their bachelor thesis on email marketing, and interviewed many of Norway's largest companies. The level of knowledge turned out to be poor.
– There was incredibly little awareness around email marketing, and that does not match the actual numbers. In its blog, Superoffice refers to a study by the Direct Marketing Association showing that for every dollar you invest in email, you get 40 dollars back. That is over twice, perhaps three times as good as social media! I sit with figures from many online stores, and email is the most profitable activity. Moreover, you are not dependent on Google's or Facebook's algorithms. Email is one of the few channels where you can communicate directly with the customer.
How to start with email marketing?
If the level in Norwegian businesses is so low, what is the first thing beginners in email should do?
– Start collecting email addresses from all channels: in-store, online, in campaigns, from articles, and pop-ups with sign-up forms when someone leaves your online store. Then, you need to start measuring. The moment you log into Google Analytics and look at traffic sources, you have actually come further than most.
The most natural place to start would be a newsletter, which Lund describes as the simplest, most basic form of email marketing. You can then become more creative over time. But how often should newsletters be sent out? Lund believes there is high tolerance here:
– People have an incredibly high tolerance for receiving email they have requested. It is typical for people to say they do not like email, while their behavior shows the opposite, and that it actually sells incredibly well. If they receive two to three emails a week, they might well go two to three weeks without opening, only to suddenly open and make a purchase. It becomes a form of branding: The emails are a reminder that you exist, and when recipients have a need, they buy.
Otherwise, it is about finding simple measures that also provide high value. Lund's best example is Derek Sivers from CD Baby, who spent 20 minutes writing a playful and fascinating text for the email everyone received after buying a CD online. It went so viral that you get almost 20,000 hits searching for it on Google, and led to thousands of new customers.
Transactional email
If you want to take the step beyond newsletters, Lund's recommendation is to focus on transactional email. This means utilizing the information customers give you through what they buy or how they use your service.
– This is how Amazon works: If you have bought three books, and they see that 3,000 others have bought the same three books, they can send an email with an offer for the fourth book the 3,000 buy. That is when you start using data correctly.
He also highlights another example based on his own experience:
– The gym chain EVO has unmanned gyms where you enter using a digital key fob. This allows them to send emails based on your workout history – for example, by offering a free personal training session to those who train occasionally, but have not managed to make it a habit yet.
Be present where the customer is
Email clearly opens up many smart solutions, but there are some quite obvious facts at the core:
– It is really traditional marketing: Find out who the customer is, what they want, and give it to them. Marketing is also about being where the customer is. In the travel panel I participated in, these executive types sat and said that email is something no one uses anymore – that it is just spam. So I asked the audience: "How many here have checked their email more than ten times today?" Almost everyone raised their hand.
Lund smiles.