Keep People Clicking

"Then we started our referral program, which we built in-house. That really worked well. About 50 percent of our members say they've been referred by someone they know." OZtion now has 130,000 members and attracts more than 1.3 million visitors a month.

Email marketing has been a major source of activity for the company, but Druce says this involves considerable trial-and-error. "It depends on the actual call to action. If we included a promotion or a bargain, people were much more likely to click through. Just saying 'we're a new company' isn't enough. We have to keep doing things to bring them back to the site. It's important to keep in contact with your existing customers and ask for suggestions."

Knowing your audience is important. "We've experimented with traditional advertising as well on radio and TV, but we found that because our target market's online we can get a much better return online," Druce says. "We also found that if we target a 25 to 45-year-old demographic we get a much better result than with 18 to 25- year-olds."

OZtion's experience demonstrates the potential value of using an email marketing system, but this requires careful planning at every stage. Standard desktop email clients can't handle sending out messages to thousands of people, and attempting to do so may result in your company being blacklisted by spam blocking software. A better option is to either install specific mailing software or hire a third party to send out marketing emails.

Even when you have convinced customers to sign up for an email newsletter, careful planning is required. Evan Fortune, executive director of email marketing company Vision 6, points out that quite different design strategies are needed for different customers. Business-to-business customers need a call to action visible at the very beginning of the email, while consumers are more willing to read through content.

Timing is critical. While the majority of marketing messages are sent on a Thursday, fewer messages sent on that day are opened than at any other time, he says. Sending messages on a weekend increases the chance of a response.