The Net Before Christmas

Small biz is stepping up its Yuletide e-mail promos

With the holidays upon us, it's no surprise that e-mail boxes are filling up with Web-based marketing drives. But here's something unexpected: Most of those campaigns are being waged by small companies, rather than by the marketing machines of Corporate America.

Out of all small businesses with Web sites, 82% will use e-mail, text links, banner ads, and other online tactics to get the message out this Christmas, according to a poll by Responsys.com, an e-mail services provider in Palo Alto, Calif., and by IntelliQuest, a research outfit in Austin, Tex. (chart). That compares with just 73% of midsize companies and 72% of big ones. It's quite a switch from last year, when only 54% of small businesses used the Internet for any form of holiday marketing. The better campaigns get response rates of 5% or more.

With limited marketing budgets, "small companies are more willing to experiment," says David Halprin, an analyst at eMarketer Inc., a New York research firm. But rather than assaulting strangers with spam, savvy entrepreneurs are using the Web to keep existing customers coming back. Courtney Pulitzer Creations, a New York event-planning company with eight employees, uses e-mail to publicize a nationwide series of executive networking get-togethers. Courtney Pulitzer says that 1,000 e-mail messages can generate as many as 750 responses.

Then there's the price tag. eMarketer estimates that direct mail costs 75 cents to and $2 per piece. An opt-in e-mail--that is, a message sent only to those who have specifically allowed their name to be sold--runs about 20 cents per name. That helped convince Evelyn Somers, head of marketing at Smarterkids.com, a Needham (Mass.) educational-products retailer with just over 100 employees. Last December, Smarterkids advertised on the Internet, on the radio, on TV, and in print. In the process, Somers discovered that the online campaigns were easier to target and track. So this year, 95% of the company's marketing is being done on the Web, compared with 40% last year. "It's all about getting and keeping good customers," Somers says.

As e-mail volume grows, it's getting tougher to grab consumers' attention. But the low price makes it worth a try. Somers says the cost of her online marketing drives have dropped by a factor of ten over the past year alone. That's a holiday bargain few entrepreneurs can resist.

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