How many times have you found your email inbox filled with offers for discounted holiday packages or an insurance policy suited to your so-called needs? Or even tempting weekend getaway/ food fest offers at luxury hotels? Often we delete them as spam, but many of us also click them out of sheer curiosity and… perhaps, even get hooked on to the offers.
Enter the new age of email marketing, whereby personalised communication can be maintained between a brand and its customers. Email marketing is a nascent trend in India. In the US, by comparison, 94% companies use email as a marketing tool.
The size of Indian industry is pegged at 10-12 billion emails per annum, which in value terms, translates into around Rs 120-150 crore per annum. But the market is growing at an annualised rate of about 30% and industry players foresee this becoming a Rs 500 crore business in the next two years. For many, the slowdown has been an added boon, spurting business by at least 25% in the last few months.
According to Manjunath K G, managing director of Bangalore-based Aghreni Technologies, an email and mobile marketing company, the return on investment in India is Rs 47 for every rupee spent in sending the mailers. “This is 1.5 times the RoI of other digital media like search engines and banner ad marketing,” he said.
For Hans India, a Delhi-based company that provides server support for mass mailing, business has been growing by almost 50% since the slowdown. “Travel companies and educational institutes contribute 50% and 30% to our revenues respectively,” said Sushant Khambojh, who owns Hans India.
For Mumbai-based Viva Infomedia, which also offers SMS solutions, business directories etc, email marketing contributes 25% of revenues. Business in this space has grown 50% since the slowdown began about a year ago, said Sneha Surendran, marketing manager at the company.
According to Saurav Patnaik, vice-president, marketing and business development, Sprinklr.in, a dedicated email marketing company, the potential for mailers is humongous since expenses in the traditional form of advertising are high. “If a soft drinks company were to do a survey of 1,000 respondents, the cost would be easily over Rs 10 lakh through traditional methods. In email marketing, the total cost would work out to a mere Rs 1 lakh or so, including the cost of creatives,” he said.
An official at another email marketing firm, on condition of anonymity, told DNA Money: “We are making a million rupees a month and have tied up with large clients, mainly in the banking and financial services industry (BFSI). This is because insurance companies have to be very targeted. There is no spillage as with out-of-home or electronic ad media.”
In fact, it is mainly the banking and insurance, travel, hospitality and education sectors which are using this medium. Recently, a leading Indian bank was able to generate Rs 150 crore in term deposits in a 45-day campaign.
Surendran of Viva Infomedia said: “India has the fourth largest internet users in the world. Around 81 million of our total population is using the internet, which is only 7.1% of the total population… So, there is a huge untapped market that email marketing can cover.”
Vijay Shankaran, digital strategy director at Urja, an interactive marketing agency, said the main job for an agency — when co-ordinating with email marketers and advertisers — is to segment the database. If the client is a retail chain, then it must know what products a customer is buying, average ticket size, gender, etc, so that it can talk differently to each customer.
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