Industry Update October 2001 Lead Analyst Jared Blank Contributors Fiona Swerdlow Core Topics Marketing Travel Intended for the sole use of Jupiter Research clients. All opinions and projections are based on Jupiter's judgment at the time of publication and are subject to change. A Jupiter Research Report subscription is $22,000 per year. For subscription inquiries, e-mail info@jmm.com or call (toll-free) 877-464-6627 or 212-780-6060 x6888. In Europe, call +44 (0)20 7563-1600.			Days Inn Outsources E-mail Marketing to Extract Greatest Value from House Lists Participants: Days Inn Hotels: a division of Cendant, with 1,900 properties throughout North America; and EchoMail: an e-mail marketing service provider Goals: Days Inn created the Daylight Savings Time promotion campaign in summer 2000 to tell customers about an offer of 25 percent off hotel rates. The company had conducted previous campaigns in-house, with limited successful conversions and a high bounce-back and dupli-cate e-mail rate. However, to improve the efficacy of the campaign and clean its house lists, Days Inn used an outside company, EchoMail, to execute the campaign for summer 2001. Execution: The campaign was conceived and launched in two weeks, as follows. Days Inn presented EchoMail with its house list of 169,000 names and e-mail addresses. EchoMail found that 70,000 of these addresses were duplicates or invalid, leaving nearly 100,000 worthwhile e-mail addresses. EchoMail created e-mails that included customized content based on the individual recipient's travel profile (i.e., business, leisure, or both) and personalized information, resulting in 29 possible combinations. EchoMail's sniffer technology determined which recipients should receive HTML-based or text-based e-mails. Based on this, Days Inn sent approximately 60 percent of the e-mails in HTML format, and the rest as a text link. EchoMail then sent test mailings, changing the creative, time of day, and day of the week to optimize the effectiveness of the mailing to the full list. The results: Click-through on the campaign was nearly 10 percent, well above the three percent to four percent Days Inn received from previous e-mail campaigns executed in-house. As in most e-mail campaigns, almost 65 percent of the click-throughs were received in the first 72 hours of the campaign. Economics: Costs: Although the companies would not reveal the actual costs of the campaign, EchoMail noted that this type of e-mail campaign can cost anywhere from $10,000 to $50,000, depending on the number of services a client uses. Revenues: The companies report that the campaign exceeded their revenue goals by more than 200 percent. Days Inn notes that the revenue generated from this campaign was over 12 times the cost of the execution. Bottom Line: Days Inn's experience points to three lessons: Be frank about what is (and isn't) capable of being done in-house Learn from service providers in order to become a better e-mail marketer Corral all resources, both online and off-line, to build and maintain the e-mail list asset Days Inn understood that it did not have the internal resources or institutional knowledge to effectively run a sustained e-mail marketing campaign. The company learned quickly that an e-mail list with over 40 percent duplicate and out-of-date e-mail addresses is not very valuable. Savvy e-mail marketers understand that their house lists are an asset and treat them with care and regular maintenance to grow their value. Firms with little experience running e-mail campaigns should first work with a full-service e-mail company to learn the tricks of the trade, then bring the function in-house over time. This allows a company to learn from the insights that e-mail service providers have gained from conducting myriad campaigns. Specifically, companies should learn from their provider about campaign testing, list hygiene, determining the best times and dates to send messages, and how to analyze campaign results. Finally, as Days Inn saw, companies must work on building their house e-mail list. Days Inn's Web site, call centers, and hotel properties are customer touchpoints where e-mail addresses should be proactively collected. Days Inn's experience shows that e-mail marketing is a valuable tool in the marketing mix, but that its value is fleeting without constant maintenance and updating. Research Highlights: Marketing & Branding Report Title: E-mail Marketing: Refining Communication Tactics to Increase Customer Value, published October 16, 2001 Jupiter's recent Marketing & Branding report E-mail Marketing: Refining Communication Tactics to Increase Customer Value shows that e-mail marketing spending will grow to $9.4 billion in 2006, with retention-based e-mail constituting the largest portion of the industry. However, the consumer experience as recipient of these many messages will be poor, requiring that marketers allow consumers to set the parameters of how this communication should proceed. Report Title: E-mail List Rental: Maximize Customer Revenues by Focusing on the Consumers You Already Know, published August 21, 2001 Jupiter's recent Marketing & Branding report E-mail List Rental: Maximize Customer Revenues by Focusing on the Consumers You Already Know shows how although the cost of renting email lists has dropped dramatically, companies instead should mine their significant—and often untapped—in-house email database to encourage consumers to make their first purchase and then increase their purchase frequency and size over time.