EMAIL & PERMISSION MARKETING: N5R AND THE TORONTO SYMPHONY ORCHESTRA
July 2001- Arts REACH
by Susan Bourette

N5R, a Toronto- and NYC-based digital e-marketing and strategy firm, specializes in customized, permission-based solutions. Founded by CEO Roman Bodnarchuk, the company opened its doors in January 1995, with the Backstreet Boys as one of their first big clients. Inspired in 1994, while reading about the potential of the Internet, Bodnarchuk discovered the Internet to be a powerful communication tool. "Communication has always had obstacles and barriers. To communicate with friends at distances or overseas we've had to write letters or place expensive calls. Because of the Internet and e-mail we can communicate virtually for free. This is very revolutionary, from a marketing perspective. As it turns out, e-mail is the number one form of communication in the world; more e-mails are sent than phone calls or faxes," says Bodnarchuk.

With a mission to help clients succeed in the new e-marketing paradigm, Bodnarchuk believes that the traditional forms of advertising (radio, TV, direct mail, and print ads) are losing their clout. "I think that we're in a new world of permission-based marketing, where people volunteer information to us and we respectfully and intelligently market to those individuals. Instead of trying to get your message out to everyone in the same way, all at once, (as with traditional advertising), now we're able to be very specific about how we market to particular individuals. With permission-based marketing we get permission from customers to find out what they want."

Bodnarchuk found that organizations like the Toronto Symphony Orchestra spend a significant portion of their budget in two areas: direct mail and telemarketing. However, over the last few years the Toronto Symphony has also noticed that those two means of advertising are no longer as effective.

Looking for something new, the Toronto Symphony contacted N5R. They understood that the target market was now online; they knew that their potential customers had embraced the Net and had e-mail. And, they wanted to know how they could reach out to this new market.

"I think a lot of people these days are going to their Web sites, instead of going to their library, or instead of looking up catalogues," said Toronto Symphony Director Michael Buckland. "For example, these days if people want to go on vacation, they'll look up a tourist authority on the Web, whereas previously they had to make three or four phone calls and collect brochures. I think e-mail is a natural extension of a Web site. If you just start thinking of it in terms of the next direct mail, and take all you know about direct mail, then say here's the electronic way to do it, and it 's faster and cheaper, then it starts to de-mystify e-marketing."

The challenge of permission marketing, according to Buckland, is building the list of e-mail addresses. While you can buy e-mail lists, e-marketing gurus emphasize the importance of getting that permission to send people the actual messages. People are wary. They're wary probably because of all the spam that congests their inboxes. And people are concerned about privacy, judging from the number of Web sites that deal with spam and privacy issues (www.cauce.org and www.mail-abuse.com, to name a few).

If permission-marketing e-newsletters are the e-superman of advertising, and if they are less intrusive than the telephone, easier than personal contact, and leap tall buildings in a single bound... then what is their kryptonite? Spam, lack of privacy? And, something to check out, if deciding to send e-mails in-house, some ISPs may limit the number of e-mails that a user can send at one time. Back to spam, it's important to make a clear distinction between unsolicited spam e-mails and permission e-mails, repeat the e-marketing gurus, over and over and over, like a mantra. The idea of building trust is an integral part of e-mail marketing, they say. The lack of trust more than likely stems form people's annoyance with spam and invasion of privacy — the lack of which can have consequences. The issue is confusing, but it seems that more and more people are lobbying to develop legislation that will control spam. Permission marketing is just that, the customer has given his or her permission and they are allowed to opt-in, or opt out, as they please. Though there are a number of ways to collect e-mail addresses, such as Web and event signups, probably one of the easier ways, according to Bodnarchuk and Buckland, is to create an incentive so that people can volunteer their permission.

"Together with the Toronto Symphony we created a $7,000 dream day, online contest for the Toronto Symphony, entitled "Escape From Realtiy, Live It, Win It" — a package that included a number of Toronto luxury items and events, such as fine dining, a luxury hotel, a shopping spree, best seats in the house at a concert, meet with celebrities, and more," said Bodnarchuk.

Regarding the development of the contest, N5R managed the electronic details including the graphics and layout. The symphony provided N5R with their existing e-mail addresses — about 4,000, and they created a questionnaire. When people logged on to the Web site to enter the contest, they were offered the option of filling out the 20-point questionnaire that would provide the symphony with details about the individual's musical preferences. With this data now in hand, the symphony is able to send very targeted messages. "We were able to get incredibly detailed information on what kind of music and artists people like. For the first time the symphony was able to customize their product and can recommend performances that meet their customers' musical tastes," says Bodnarchuk.

Keeping budget in mind, N5R timed the promotion so the symphony could leverage their already-existing advertising (newspaper, radio, and banner ads) and direct mail list. An extra paragraph in the ads mentioned the promotion and that people could log on to the symphony's Web site and go directly to the contest. "For example, if the symphony had a Wynton Marsalas concert, we would take a little space in the ad and say 'If you come to our Web site, you can log on and get a chance to win this $7,000 prize,'" said Bodnarchuk.

As a result of the contest, and N5R's tailored tracking ability, the Toronto Symphony enhanced their address list in a number of ways. They increased their list of permission-based e-mail addresses from 4,000 to about 9,000. From the questionnaire completed by over 5,000 participants, they gained a profile of people's musical tastes. Not only had they more than doubled their e-mail base of addresses, but for nearly more than half of the 9,000, they now knew something of their constituents' musical tastes. The symphony increased their percentage of younger subscribers. "We wanted to lower the average age of our concert goers and were able to do so because there's a younger demographic logging onto the Internet," said Bodnarchuk. And, since a "refer-a-friend" option was added to the contest site, 25 percent of the people who entered had been referred by friends, an extra boon for the symphony. The incentive: the friend who did the referring increased his or her chances of winning. "It was like getting an extra ballot. That's why it was so magical, because it encouraged people to tell others about the Toronto Symphony. The difference is... if I send you a well-designed direct mail piece on the Toronto Symphony Orchestra," said Bodnarchuk, "the odds of you photocopying it, addressing and stamping an envelope, then sending it on to your friends, is, well, pretty unlikely. But if you're an arts fan, and I send you an HTML e-mail with beautiful graphics, it's pretty likely that it'll be forwarded... because all you have to do is click."

More than doubling the e-mail list, gaining detailed constituent information, and increasing the younger demographic, "That was the good part", said Buckland. "Where the promotion fell down... I think we could have advertised more. And, I think we could have gotten more response, had we offered an out-of-town prize. But we're very happy with the results, and we'll probably run another promotion like this in the future."

Building an e-mail database, according to Buckland, is a slow, gradual process. "Every piece of communication we use now asks for an e-mail address — and still people are somewhat reluctant to give it. The way to build that trust: offer benefits, real advantages, something for the customer — all of which must be delivered. We can now look at people's musical tastes and draw their attention to a concert that we think they would like. We can offer things that are of service or of benefit, rather than trying to sell something. I want people to look forward to Toronto Symphony's e-mails, and I think the benefits will soon outweigh the uneasiness," said Buckland.