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How E-mail Marketing Works

        Money | Marketing

Sending E-mails and Measuring Success with E-mail Marketing Software
Politicians like John Kerry, above during the 2004 presidential election, can use e-mail lists to reach potential voters.
Politicians like John Kerry, above during the 2004 presidential election, can use e-mail lists to reach potential voters.
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Companies need to put their product information in front of people in order to sell them, and the first step after crafting the message is to find an audience. A business will usually use e-mail marketing lists, collections of identities and e-mail addresses that act as sales leads. There are also specific e-mail marketing services -- some companies exist simply to find customers willing to receive promotional material and organize their information into those lists, and businesses will pay them for this service. (People's names, addresses or additional information can't just be cherry-picked from any location. There is also the issue of permission, which we'll talk about in the next section.)

On top of the fact that e-mail marketing saves money and resources spent on paper and the use of the post office system, there are several reasons companies use it as a major source of advertising. E-mail marketing lets a company send a message directly to customers -- instead of waiting and hoping someone will stumble across a Web site, sending out e-mails puts the information right up front and can lead to direct sales if there's a link to an online store.

E-mail marketing is also very easily tracked and analyzed. Once a business sends an e-mail, special e-mail marketing software programs can record important statistics. An open rate, for example, measures how many people successfully received and clicked open a specific promotional e-mail instead of deleting it. A click-through rate, on the other hand, gives the percentage of people who actually clicked on links offered in the e-mail and used a particular Web site or opened a specific coupon.

While e-mail marketing has many advantages for companies trying to reach a broad audience, there are some downfalls. One of the biggest issues that determines whether an e-mail marketing campaign is successful or not is the concept of permission -- and there's even a law that sets guidelines for companies. To learn about when an e-mail crosses that gray line and becomes spam, read the next page.


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