When Your Business Talks Too Much

Lured by Cyber Monday deals, I bought something from ToysRUs.com for the first time this past weekend. Besides the order confirmation email, I received six additional promotional emails from the company, in just three day. That averages about two a day. Annoying? Sure! But ToysRUs is not alone. In the last one to two years, I have seen major retailers dramatically increase their email promotion frequency. Just a few weeks ago, I had removed myself from the email lists of well-known retailers such as New York & Company, Victoria’s Secret, to name just a few. Some of these companies were sending me daily if not more email messages about something on sale. It appears that either the recent economic recession has turned these retailers desperate, or a new marketing bible is out there somewhere teaching these retailers to bombard consumers with emails.

Is this strategy effective? Business aside, let me ask you this: have you ever met someone who can talk your head off and don’t know when or how to shut up? If you can’t picture that, think about Adrian Monk’s upstairs neighbor in the hit TV show Monk. What do we do when we meet people like that? We usually try to avoid them like the plague. I did with those retailers. When I asked my students what they do, they said they simply deleted the emails. I am sure this is not what the retailers intended.

Photo by Flickr user oddharmonic | CC2.0

Now, I am not discounting the effectiveness of email marketing. When used appropriately, emails can be an effective and low-cost way of communicating with customers and keeping a business in consumers’ mind. But just like most things in this world, too much is not a good thing. Let me present a few reasons why daily or too frequent promotional emails are neither necessary nor effective:

• It is impersonal: When consumers are getting daily emails from a retailer, it is hard to imagine the retailer to put too much thought into these emails. The message is usually the same or very similar, save 20% today or get $10 off now! It lacks the personal touch that a less frequent but more thoughtful message can bring. This is true even if you plug in the consumer’s name into the emails to pretend some level of customization.
• It mismatches consumers’ purchase cycle: Unless consumers are about to make a major purchase decision, usually they do not obsess everyday about most of the products that they buy at regular intervals. In those situations, a weekly email is typically sufficient to alert consumers to available deals and to be on the radar when consumers are ready to take the plunge.
• It is cheap (and not in a good way): The way we perceive the world is very much directed by our expectations. When consumers receive promotional emails at high frequencies from a retailer, the expectation is that the retailer will be on sale all the time. This cheapens the retailer image and makes regular product prices seem high in the future.
• It is mis-targeted: Deal-oriented emails are usually appealing to deal shoppers. These consumers love a great deal and tend to hop from store to store to find the best deal possible. In marketing research, we call these consumers cherry pickers. Cherry pickers typically hold little loyalty toward any particular company and will easily deflect when a competitor offers a better deal. Therefore, from a long-term financial health perspective, those daily deal emails are attracting the wrong type of customer base.
• It is unethical: This may sound a little too serious. But think about who is much more likely to respond to these frequent emails promoting incredibly good deals? The impulsive shoppers! Especially the “buy now” deals give these consumers a justification to splurge and buy things that they either cannot afford or do not have a need for. They become the prey of these emails. In addition, these unnecessary emails clog up the Internet highway. Assuming an online retailer has 100,000 consumers (not a very large number for big retailers) on its email list and it sends out one email per day, that amounts to 36.5 million emails a year. What a waste of bandwidth!

Having made my case, I acknowledge the need for retailers to offer sales promotions at times and the niche segment of consumers who will respond well to such promotions. So how can retailers do that properly? I offer two suggestions:

1. Create a two-tiered email communication strategy. For consumers who by default are included in the email database because they have made some kind of purchase in the past, offer less frequent (e.g., weekly, monthly) emails. For those who value more frequent deal and communications, offer them the option to opt-in for more frequent emails. After all, @DellOutlet Twitter account and Amazon.com’s Golden Box and lightning deals are effective not because they shove the deals in consumers’ face, but because consumers voluntarily go hunt down those deals, either by following the account or by visiting the website.

2. Use better behavioral modeling to optimize email communication content and frequency. With electronic communication, it is not difficult for retailers to keep track of who opened the email, who clicked through the email, and what made the consumers do so. Combining this with consumers’ purchase history and good analytics, retailers have a rich data set to understand what may or may not be appealing to a particular consumer. With this deeper understanding, it is then possible to offer more targeted and therefore effective emails and achieve more in a single email, subsequently eliminating the need to send out so many emails.

To end this post, I issue a personal call to all retailers who bombard consumers with emails: please reconsider your communication strategy, make every one of your interactions with consumers positive and productive, and stop talking so much and instead listen just once.

Good things are better shared!