The Small and Midsize Business Email Marketing Survey 2013

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The Small and Midsize Business Email Marketing Survey 2013

{ The Small and Midsize Business Email Marketing Survey 2013 }

Introduction

Email remains a staple component in the marketing strategies of businesses and organizations of all shapes and sizes. Despite the emergence and hype surrounding numerous other digital marketing channels, such as paid search, SEO, and in recent years, social media, email still commands a larger share of marketing spend than any of its contemporaries. The reason for this is clear. When used properly (i.e., when it is relevant, timely, and engaging), email offers a targeted, personal, and effective method of communicating with its audience. It is also extremely cost effective and highly transparent, with results easily tracked and analyzed. Despite numerous high-profile predictions of email marketing's demise, particularly at the hands of social media sites like Facebook and Twitter, spend on email continues to increase. This has forced many marketing commentators to reevaluate their projections. Many now argue that email was in fact the first social (albeit closed) network. Email goes beyond basic social engagement and provides a trusted, secure, and formal environment where messages can be archived and chains of communication easily followed. This means it is a great place to conduct business. The emergence of social media has actually strengthened email marketing's position as the technologies have entwined to create more powerful and strategic methods of engaging with customers. In October 2012, iContact (email marketing by Vocus) commissioned an independent survey on the health of email marketing in the small and midsize business community. Six hundred and one marketing decision makers, from a range of organizations with annual revenues of between $1 million and $50 million, were surveyed on their attitude toward, understanding of, and commitment to email marketing. This report details the findings of that survey.

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Summary of Key Findings

?? Command of budget. On average, businesses

spend 15 percent of their marketing budget on email marketing; 54 percent report spending 10?20 percent, while about one-fifth spend more than 20 percent of their marketing budget on email. Budget commands more than any other single marketing tactic. The next most popular tactics are events (14 percent on average) and person-to-person contact (averaging 13 percent). Social media and SEO each accounted for 8 percent of budget spend.

?? Email's #1 purpose is to

share. While email has commanding share of the marketing budget, it's also used to share. 92 percent of businesses say they use email to share information about new products or services; 90 percent said they use email to share news about their organization.

?? SMB email list size. Businesses surveyed

have an average of 3,489 email subscribers; about one-quarter of businesses have fewer than 1,000 subscribers while about one-fifth have more than 10,000 subscribers on their email marketing lists.

?? Email at least once a week. 39 percent of busi-

nesses email their entire list about once per week-- with 6 percent sending daily emails. 58 percent report sending emails to just part of their list about once per week, with 10 percent sending daily emails to a partial list.

?? Integrating email with other types of mar-

keting. 64 percent of businesses coordinate email marketing with social media marketing--the most

common of major tactics listed, followed by trade shows and events, person-to-person contact, and direct mail.

?? Still plenty of room for growth. 56 percent of

businesses say they plan to increase their use of email marketing in 2013; email was second only to social media, which 60 percent of businesses said they plan to increase. SEO placed third with 41 percent.

?? Marketing has confidence in email. 32 percent

of respondents said they were very confident in email marketing, while 78 percent said they were somewhat confident. Email marketing ranked third, behind personal outreach and events and ahead of social media.

?? Email marketing helps business. 91 percent

of businesses said email marketing was either helpful or very helpful to their organization. Most businesses cite the precision audience segmentation that email offers and the ease with which customers and prospects can engage the brand.

?? Email marketers love clicks. Clicks are the #1

metric email marketers look to when measuring the success of their email marketing campaigns, with 78 percent looking to increase website traffic. 74 percent gauged success by leads generated and 72 percent by actual sales.

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{ The Small and Midsize Business Email Marketing Survey 2013 }

Email Commands Marketing Budget

Email Marketing's Share of the Marketing Budget

0% Less than 10%

10%-20% More than 20%

12% 14%

19%

54%

Email marketing is important--in fact, 83 percent of businesses say email is either important or critically important to their overall marketing strategy. The ability to segment audiences and reach prospective or existing customers with content designed precisely for their preferences was often cited as a reason why email is so important--but nothing demonstrates commitment like a budget.

It's telling that respondents said, on average, that email marketing commands 15 percent of their overall marketing budget. This represents the single largest marketing expenditure. In fact, 54 percent of business said they spend 10?20 percent of their budget on email marketing, and nearly one-fifth (19 percent) spend 20 percent or more.

media.1 According to this survey, social media ranks fifth in overall share of marketing budgets, and email marketing investments are nearly double.

Email Budgets Set to Grow

Fifty-six percent of businesses reported plans to increase spending on email marketing in the next year, while 41 percent said they'd keep email spending about the same. Social media is the only marketing area that may see a larger investment--60 percent of businesses said they'd increase spending on social media. Of the 11 different areas, only social media and email marketing had a majority, or greater than 50 percent of respondents, indicating that investments would grow. Several other categories trailed behind social media and email marketing, including SEO (41 percent), person-to-person outreach (40 percent), and online display ads (38 percent).

How much should you spend on email marketing?

There is no one-size-fits-all answer to this question. It will depend on a number of factors, including current list size, potential list size, depth of segmentation, your business model, etc. For example, a large business targeting a relatively niche market with a single (or limited range of) high-value product(s) may spend less than a small business targeting a large community with a range of inexpensive products.

Business spending on email marketing topped investments in events and trade shows, search engine optimization (SEO), social media, and a range of paid media across print, broadcast, and digital media. To place this in context, previous studies revealed that businesses spend a median of $845 per month, or more than $10,000 per year, on software tools for social

Because email marketing is often priced in terms of list size and/or number of sends, your budget should be calculated on the number of meaningful, targeted communications you can send your list and

1 Path to Influence: An Industry Study of SMBs and Social Media

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the Return on Investment (ROI) or impact you hope to achieve via your email marketing campaigns. This might mean you send a number of highly relevant emails on a daily basis to various segments of your list, or you send just one newsletter-type communication to your entire list whenever you have something to share. The path you follow will help determine the budget you need to set aside for email marketing.

The first step in planning your email marketing budget is to ensure that you build and deliver only relevant, timely, and engaging emails. This will result in higher open, clickthrough, and conversion rates, allowing you to analyze your ROI and optimize future campaigns and strategies. While email offers a seemingly low-cost marketing solution to many businesses, the fact is that marketing is neither expensive nor cheap. There is only marketing that works and marketing that doesn't work. If you are sending untargeted, irrelevant, and untimely email communications, and you are not tracking results and optimizing accordingly, then the amount you are spending is less important than your campaign's ineffectiveness.

Average Share of Marketing Budget

Email marketing Events/Tradeshows Person-to-person contact

Print ads Direct mail Social media Search Engine Optimization Online display ads Television advertising Radio advertising Display ads like billboards and signs

Other

15% 14% 13% 11% 10% 8% 8% 7% 5% 4% 3% 5%

How Businesses Use Email in Marketing

Sharing information about new products or services was the most common use of email marketing (92 percent); sharing news about the organization ranked second (90 percent); and advertising special events ranked third (87 percent). These are fairly obvious marketing activities, and previous studies on the use of social media shared similar rankings for the top uses of the medium. However, where email breaks with social media is in engaging customers in a formal, business-friendly environment and soliciting feedback.

Email Has Pull

Conventional wisdom might think of email as primarily a push medium, but the data shows that email has considerable pull. 84 percent of businesses said they used email to engage and solicit feedback from customers. Whereas businesses tend to be wary of soliciting this feedback in the public domain of social media, email provides a way to connect privately. Email, of course, is not immune to public disclosure--it's easy to forward an email or post it online--but email does seem to provide a sense of personalization that puts businesses more at ease in engaging and asking for customer commentary.

Responding to News--Email as a Public Relations Tool

While just 59 percent of businesses said they use email to respond to news about their organizations--the lowest scoring of all the possible uses listed--analysis by company size demonstrated some statistically significant variations. Larger organizations, those with $30 million or more in revenue, were more likely to use email to respond to news (70 percent). Larger organizations are perhaps more likely to generate news, and this demonstrates

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how the uses of marketing channels like email marketing expand and grow, even as the organization grows.

Email Subscribers--A Matter of Size

Email List Size

The Cost of List Growth

There are very few financial barriers to list growth. Only 11 percent of those surveyed said that the cost of acquiring new subscribers is too expensive. 47 percent believe the costs are reasonable, and 21 percent stated that they would be happy to pay more for new subscribers.

Not sure; 17%

1,000 or fewer; 24%

More than 10,000; 21%

3,501 to 10,000; 19%

1,001 to 3,500; 19%

Median: 3,489

Most businesses have email lists of 10,000 or fewer subscribers, although 21 percent report having more than 10,000. The median list size in this segment is about 3,500 subscribers. 19 percent of businesses report having between 1,001 and 3,500 email subscribers, while another 19 percent report having between 3,501 and 10,000 subscribers.

Modest Goals for Growth

Goals for growing email list size were relatively modest. On average, businesses are aiming to grow their email list size by 28 percent. 58 percent of respondents said

they'd like to grow the number of email subscribers on their list between 1 percent and 25 percent in the next year. Another

15 percent said they'd like to see their email lists grow between 26 percent and 50 percent over the same period.

Email Frequency and Segmentation

Frequency of Emails to List

Entire List Part of List

Daily Daily A few times a week A few tOimncees aa wweeeekk A few timOnecseaamwoenethk OAncfeewatmimoenstha omrolensths Once a month oNr elevsesr Never

Daily Daily A few times a week A few tOimncees aa wweeeekk A few timOnecseaamwoenethk OAncfeewatmimoenstha omrolensths Once a month oNr elevsesr Never

6% 6%

2% 2%

16% 39% 1167%% 39%

17%23% 23% 34% 34%

10% 10% 24%

14% 24% 14%22%

2212%% 8% 21% 8%

48% 48%

Most businesses surveyed email their entire lists monthly and send segmented emails at least weekly. 34 percent of businesses send email to their entire lists at least once per month, while another 23 percent email their entire lists a few times per month. A surprising 39 percent of businesses email their entire lists once a week or more, with 6 percent saying they email their entire list every single day.

Among businesses that segment email marketing lists, 58 percent of respondents said they email part of their

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lists once or more per week, with 10 percent reporting that they email part of their lists daily. The majority, 24 percent, indicated that they email part of their lists a few times a week.

Integrating Email with Other Marketing Functions

Businesses are more likely to integrate email and social media activities than any other marketing means. 64 percent of respondents said they coordinate email activities with social media marketing. It may seem plausible to conclude that this is because both media are digital; however, the next three most frequently integrated activities are physical: events, personal contact, and direct mail.

50 percent of respondents said they coordinate email marketing efforts in conjunction with events, such as trade shows. Another 48 percent said they use email after personal contact, perhaps meetings or briefings, and 48 percent also said they coordinate email marketing with direct mail. Coordination with SEO, print ads, and online display ads all followed.

Email Marketing Management

Business marketers have a high degree of confidence in email marketing. In fact, confidence in email marketing was higher than any other marketing tactic, except for direct, interpersonal communication (80 percent). 78 percent of respondents were either "Extremely Confident" or "Very Confident" in their email marketing efforts. Marketing tactics that followed include events and trade shows (72 percent), direct mail (65 percent), and social media (60 percent).

Dedicated teams

54 percent of businesses have some sort of resource dedicated to creating email content--34 percent report having a team dedicated to email marketing, and 20 percent have assigned the responsibility to just one person. 34 percent of businesses assign email content generation to the marketing department as a whole--this is likely a small team of people responsible for a range of marketing activities. Just 9 percent of businesses report outsourcing email marketing content development to an agency.

Uses of Email Marketing

To share news about new products and services To share news about your organization

To advertise special events To engage your customers and solicit feedback or information

from them To send a regular e-newsletter

To promoted content on your organization's website, blog, etc.

To advertise sales or promotions

To solicit donations from email subscribers

To respond to news stories about your organization

92% 90% 87% 84% 83% 83% 72% 71% 59%

Confidence with Marketing Types

Extremely Confident

Person-to-person contact Events/Tradeshows Email marketing Social media Print ads Direct mail Online display ads SEO

Television advertising Display ads

Radio advertising

41% 35% 32% 27% 25% 22% 20% 20% 17% 14% 13%

Very Confident

38% 38% 37%

80% 72%

78% 60% 60%

65% 58% 55%

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{ The Small and Midsize Business Email Marketing Survey 2013 }

Conclusion

Email marketing offers small and midsize businesses the opportunity to target their customers with engaging offers and promotions, as well as relevant company news and information. Email marketing is cost effective and easy-to-use, and complements other marketing strategies perfectly.Small and midsize business owners and marketers are comfortable with email marketing technology and the strategies that make it successful, and are looking to increase their activity via the medium in the coming years.

About iContact

Since 2003, iContact has helped small and midsize businesses share their stories, ideas, and products through email and social marketing. We take what we know about our favorite small and midsize businesses--a trendy boutique hotel in South Beach, the online poster store that helps us decorate our cubicles, even the local coffee shop you'll find us at on Saturday--and we build the online marketing features we know those businesses need to succeed. We then pair our tools with award-winning support and expertise, so our customers never have to go it alone. And we top it all off with great personality, energy, and a commitment to creating a positive wake in our community. iContact is a service of Vocus. For more information, visit us online at . Connect with us:

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