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A PROGRAM OF THE U.S. CHAMBER OF COMMERCE FOUNDATION
 

IOM Blog

May 18, 2012

Email vs. Facebook: The Tortoise and the Hare

The other day a colleague asked me what I thought of Facebook as a tool for growing business. It was a timely question.  He wondered what the new infusion of cash from Facebook’s IPO might mean for the young company.  In particular, my friend was trying to make decisions about how to allocate resources in his company and wasn’t sure how much time or money he should invest in the Facebook platform. (“Should I hire a full-time social media person? Move my ecom guy full-time to Facebook? Invest in a Facebook add-on tool like Buddy Media?”). My answer must have sounded like Yoda to him– as I couched it as a retelling of the Aesop’s Fable, “the Tortoise and the Hare”—the hare in this case Facebook and the Tortoise, email.

“Wary should you be of the newest hare on the information superhighway for it is the dependable tortoise that will win this race…”
A couple of points:
  • Facebook has gone from Harvard campus novelty in 2004 (Remember Mark Zuckerberg’s first social media foray? “Who’s Hotter”) to a global powerhouse today where it’s community of 901 million members would rank it as the third largest country in the world
  • With a valuation of $104 billion dollars, Facebook now has the resources to not only hire the best talent but also to buy any company it may need.  It can now also address its core issue of how to monetize its site among mobile users.
  • Facebook is everywhere. In my local theatre a few weeks ago– while waiting for the  Hunger Games to start, an ad appeared on the screen encouraging me to “Like” the theatre chain—if I did so, I would be rewarded with a free bag of popcorn right now
But Facebook, like Aesop’s hare is flawed; it has grown so quickly that it doesn’t really look over its shoulder to check on the competition. It doesn’t yet have enough “track time” on the internet superhighway to show it can be a proven winner for businesses over the long term. It has a glaring hole in its mobile strategy. (Note:  GM pulled its Facebook ad budget last week).
Companies large and small have often asked over its short history: “can this tool help me sell more? Retain customers? Raise funds?” And now as a public company those questions become even more important… and the answers are due quarterly. Compound that with the fact that Facebook is still at the center of the storm on how social media privacy will be defined in the future and finally remember that its mercurial founder and CEO is still in charge– controlling 56.9% of the voting stock. (as his board was reminded a few weeks ago when he announced the acquisition of social media company “Instagram”– having never consulted them prior to making the deal).
So I advised my colleague that before you run headlong to the betting window and invest time and money on the “teenager” in the race, look no further than the dependable tortoise and senior citizen—a competitor whose age, stamina and provable ROI still qualify it as the most versatile electronic business communications tool available. In other words, Facebook has a place in your marketing arsenal, but first invest and prioritize in your email platform and programs. Email is still winning the race for businesses on the information super highway.  It is still the most trusted, widely used and economical tool for sales, communications and branding.
(BTW…Facebook is a real “teenager” compared to the “senior citizen” email. The first email was sent in 1971, and Facebook was founded in 2004. The “rule of time” on the internet suggests that every six months in real time equates to one full “net year”.  That makes Facebook a fleet footed “teenager” of 16…and email, a plodding senior at 82).
Some quick stats: 
  • KING OF THE WORLD: “Email is still the most important thing most of us look at in the morning – before coffee, before we kiss our spouses, before we sometimes crawl out of bed – we check our email. We all know that social media and blogs are important – content (rather content in context) is the new digital currency of our professional and personal lives. However, when it comes time to make a strong CONNECTION with someone else it’s often an email (or a text) that does the trick.”  –Raymon Ray Technology Evangelist
  • #1 SOURCE TO SHOPPING CART: In a recent study by Seewhy which analyzed 60,000 completed ecommerce transactions across multiple sites from February 2011,  the source of more than half  (57%)of all users who reached the shopping cart was from email. The next largest source was ‘”direct” (18%) or those customers that accessed the site directly. Social media as a source was a mere 4.3%.  More importantly, when Seewhy looked at actual conversions, 67% of conversions came from email as the source while, 24% from direct and only 2% came from social media. Therefore at the core level of measurement, a transaction, email is 33 times more effective than social media.
  • SALES: In addition DMA reported that an average ROI of $43.52 per dollar for every email sent and noted that direct mail cost are “20 times higher” than email
  • PREVALENT USEAGE AMONG ALL AGES: According to Constant Contact, 225 million people in the US use email daily.  91% of internet users are between the ages of 18 and 64. In addition, according to Pew Research  89% of adults read or use email daily. Contrast that with Quantcast’s estimate that there are about 148 million users on Facebook in the US…monthly.
  • TRUST: Nielsen reported that consumers completely trust/somewhat emails they’ve signed up for 50% versus 36% for ads in social networks. (Nielsen’s latest Global Trust in Advertising report, surveyed more than 28,000 Internet respondents in 56 countries)
  • EASY TO BUILD LISTS:  According to Transact media 57% of consumers will sign up for an email ‘alert” or company newsletter. Email in fact, has little of the stigma associated with giving out an address or phone number, primarily as it is an opt-in medium that is easily ignored…
My colleague asked me for a tune-up list for his email program and I provided him with my top six email tactics:
How to get the most out of Email
1. Personalize every email. First name field should be in every database you own and all emails should be constructed to create a personal greeting. Studies over the years have shown that personalization can increase open rates by up to 27% over non-personalized emails.
2. Clean your lists every 3 months. Delete non-members who do not open. Don’t assume that their non-behavior will change over time.
3. Keep subject lines short and simple. You have an estimated 3 seconds and about 6 words to convince someone to take action. In a recent study from Responsys a major email platform provider showed that lines using 26 characters or less were the most effective at getting open rates.
4. Survey your users. Don’t be afraid to utilize a tool like survey monkey to canvas opinions and coalesces people around issues. Email tends to get higher response rates than polls or questions posed in Facebook communities.
5. Re-send up to three times. Most email platform providers have the ability to create new lists after each campaign send to reach those who did not open the email from the first send. Separate the first and second send by 72 hours; and the second and third send by 48 hours. That way, over a period of a week, you will maximize the opportunity to get response to your content.
6. Keep the Hare in your sites and leverage his speed; always cross promote your social media channels in every email that you send. Allow users to find the best way to interact with you. It is not uncommon that an initial Email could be responded to using Facebook or Twitter or other platforms. This type of strategic thinking is referred to as cross-platform marketing.
In summary, invest your time, talent and treasure into a proven race runner, email. Facebook will require many years of seasoning before its real value to companies can be both harnessed and understood. In the meantime, bet on the tortoise for steady performance and returns that are tangible and measurable.
Author’s Note: The first email was sent in 1971 by Ray Tomlinson a programmer who was working on the Arpanet Project. Sadly, Ray no longer remembers the content but thinks it was something mundane like “QWERTYUIOP”…the first row of letters on a standard keyboard.

Avatar photo
Brian Baker
Faculty, Institute for Organization Management
VP Sales and Marketing, Chateau Montelena Winery

Brian Baker is VP Sales and Marketing at Chateau Montelena Winery in Calistoga, CA. He oversees all sales and marketing activities– including the sales channels of US and International wholesale and Direct to Consumer as well as all aspects of Marketing including brand stewardship, PR, Sales Promotion and Advertising. Before his promotion to VP Sales and Marketing, Baker served as the Director of Consumer Direct Sales overseeing the retail, hospitality, and wine club and e-commerce efforts of the winery. Prior to Chateau Montelena, Baker served as Vice President Consumer Relationship Management at Jackson Family Wines. Before joining Jackson Family Wines, Baker spent 18 years in the travel industry, including a post as VP marketing for the San Francisco Convention and Visitors Bureau (now SF Travel) and executive director of worldwide marketing for Dollar Rent a Car.

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