Abstract MBA Thesis

Using Permission-based E-mail as a Medium for Customer Communications
May 2000 – 66 pages

Committee Chair: Professor MaryEllen Campbell

E-mail marketing’s success is predicted by the astonishing growth of the Internet: As of May 2000, over 275.54 million people were online worldwide. By the year 2002, 490 million people will have Internet access. E-mail’s share of total online advertising spending in the U.S. will increase from 3% in 1999 to 15% by 2003.

E-mail is the single most important use of the Internet and the main reason people go online. As traditional direct marketing faces difficulties such as negative image and high prices, e-mail offers interactivity, accountability, and immediate results. Additionally, the costs are lower and the response rates much higher than for other online marketing techniques. E-mail not only establishes one-on-one communication with the customer, but it integrates sophisticated customization.

E-mail should be permission based, i.e. sent only to consumers who agreed through online opt-in forms to receive promotional e-mail. Unsolicited e-mail is controversial and intrusive. Even though e-mail marketing may currently project a negative image because of users who engage in “spamming”, when used in a responsible way, it is a fast, state-of-the-art method to sell products worldwide.

In a world full of similar brands and products, it is crucial to build relationships with customers in order to establish loyalty and build brand equity. When integrated into the marketer’s communications mix, permission-based e-mail marketing is an excellent vehicle to initiate or develop these relationships. As a very effective branding tool, viral marketing, which uses the “word of mouth” principle, takes advantage of the power of contacts to find consumers with the same interests.

The thesis further evaluates issues such as the database (buy/rent or use an internal database), the use of autoresponders and the importance of e-mail design. Legal actions strive to establish a responsible use of e-mail marketing. Most industry and government activities concern the fight of spam as well as security and privacy issues.

In the future, e-mail will remain an effective and affordable customer communications tool, supporting and supplementing a company’s marketing mix.

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