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How E-mail Marketing Works

        Money | Marketing

E-mail Marketing Services
Many customers who went to see actress Helen Mirren speak and sign books at Barnes and Noble in New York City probably heard about the event through e-mail marketing.
Many customers who went to see actress Helen Mirren speak and sign books at Barnes and Noble in New York City probably heard about the event through e-mail marketing.
Will Ragozzino/Getty Images

Exactly how do you define e-mail marketing? Although it's essentially any e-mail a company sends out to people, there are a few approaches to it. E-mail marketing can be:

  • Promotional e-mails sent to encourage potential customers to buy a product or service or convince current customers to keep buying
  • Regularly sent e-mails meant to strengthen the relationship between the business and the customers and encourage loyalty to a product or service
  • Advertisements for a product or service that are placed in e-mails sent by other people or companies (typically found in "banners" above or to the side of the e-mail's body of text)

All of these are the electronic equivalent to sending out direct mail to customer's mailboxes, writing and sending out a regularly published newsletter with updates and useful information or paying for advertisement space in a newspaper or magazine.

One popular example of e-mail marketing is the type of membership service offered by booksellers like Borders and Barnes and Nobles. When customers sign up for a member card, for instance, a company typically asks them to write down their e-mail address on the application form. The company records all of these addresses, and when a big sale or a special in-store reading by a best-selling author approaches, e-mails are sent to the members. These e-mails might include special coupons or list the newest available products -- whatever's included, the point is to get as many people into the stores as possible and continue using their services.

How is a newsletter different from a one-time promotional e-mail? One example we can look at is that of an independent record store. Because of online music stores like iTunes and the ease and simplicity of MP3s, many record stores selling CDs or vinyl are struggling to make ends meet. Some are trying new tactics to keep customers interested, and convincing loyal customers to sign up for periodic e-newsletters can inform people about new releases, special store-only digital downloads, in-store performances and big sales.

So how do companies send out their e-mails, and how do they know whether the e-mails they're sending out are making a difference? To learn about e-mail marketing software and services, read the next page.