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A year after McKay Smith bought a book about Ottawa from Amazon.ca, he got an e-mail from the online retailer letting him know about an upcoming tome covering the same subject.

"For a company to come back a year after I made a purchase and say, 'We remembered you bought this last year and now look, here's a similar product we think you might be interested in' — it's astounding," says Mr. Smith, vice-president of retail marketing for Magmic Inc., an Ottawa-based developer and publisher of mobile games.

"Needless to say, I bought the book," he adds.

Mr. Smith has more than a consumer's interest in the power of e-mail to drum up business. The company he works for has been engaged in e-mail marketing — or e-marketing for short — since it set up shop six years ago.

At least twice a month, Magmic e-mails its customers an electronic newsletter containing details about a new game and special offers on such items as ring tones or wallpapers for their mobile devices. The company also sends out the occasional e-mail message when it has breaking news to announce.

"E-mail marketing and e-newsletter marketing in particular are at the core of our strategy," says Mr. Smith. "It's by far the most efficient way to reach our customers from a cost standpoint."

It's easy to see why e-mail has become the marketing tool of choice for many midsize businesses such as Magmic, which has about 100 employees in Ottawa and Vancouver.

The Direct Marketing Association (DMA), headquartered in New York, estimates each dollar spent on e-mail marketing generates more than $48 (U.S.) in sales. All told, e-mail marketing in 2007 resulted in close to $22-billion in U.S. sales, says the DMA.

While there are no similar numbers for Canada, most marketers know how much Canadians love their e-mail. In an Ipsos Reid survey last year, 66 per cent of Canadians said they prefer e-mail over other methods of communication. And close to 80 per cent have signed up to receive e-mail from companies.

"Medium-sized businesses love e-mail marketing because it's one of the best tactics with respect to return on investment," says Luc Vezina, vice-president of marketing and product management at Campaigner, an Ottawa company that provides e-mail marketing systems to small- and medium-sized businesses.

"And it's very affordable — you can do it for as low as $25 a month or a couple of thousand a month if you want to send tens of thousands of messages and you're willing to pay for advanced features like automated campaigns," Mr. Vezina says.

Many small and medium businesses have been using e-mail marketing for years, but until recently the majority preferred to do it themselves because the cost of using professional e-mail marketing services and e-mail systems were often beyond their means.

But today, with more e-mail marketing companies competing in the market, prices have come down considerably.

"When I first started using professional e-marketing services a decade or so ago, they were very expensive," Mr. Vezina recalls. "Now there's enough competition in the space to the point where providers have to offer competitive prices that even a small- or medium-sized business can easily afford."

But simply throwing money at e-mail marketing isn't enough to guarantee good results, says Catharine Fennell, managing partner of Swing Think Inc., a Toronto marketing firm. Companies that want to see a good return on their e-marketing investment need to put some effort into creating messages that people will actually read, she says.

"Make it compelling. You want to be providing information that is current, relevant, and will capture people's attention."

Short and punchy are good words to remember when creating marketing e-mail, says Ms. Fennell. Subject lines need to be concise summaries of what's in the e-mail while headlines should be, well, short and punchy.

Every piece of marketing e-mail should have a call to action spelled out clearly at the top of the page, says Ms. Fennell. This doesn't mean putting an invitation to buy something in every e-mail; the required action could be for the recipient to visit the company's website, or to enter a raffle.

To encourage readers to follow an e-mail link to a website, Ms. Fennell suggests a message that leaves them hanging and wanting to find out more.

Most companies that solicit e-mail addresses for marketing purposes will tell potential e-mail recipients what type of content they can expect to receive. Ms. Fennell says it's important that marketers deliver the content they promised.

"If you promised to send me tips on how to create high-impact 'webinars' but instead turned around and tried to sell me your latest technology platform, then you've made a huge mistake," she says. "You need to honour the terms under which the recipient agreed to give you their e-mail address, otherwise people will unsubscribe."

Such a mistake could land the message in the recipient's spam folder, or even on the spam list of Internet service providers, says Ms. Fennell. These ISPs can block a company's e-mail from their servers, preventing its marketing messages from reaching anyone who subscribes to the ISP's services.

Kim Dixon, vice-president of marketing for TalkSwitch, an Ottawa company that makes telephone systems for small businesses, says technology glitches are another big turnoff for e-mail recipients.

"One of the most horrible things you could do as an e-mail marketer is to have broken links, or your website not working," she says. "So test, test, test and then re-test your message before sending it out."

But even the most well-crafted message can remain unopened and eventually deleted without being read. Ms. Dixon says it's not unusual for some customers to lose interest after months of faithfully reading your company's e-newsletters.

Don't be afraid to ask customers what you can do to make them pay attention to you again, she adds.

"It's a good idea to survey your subscribers once in a while and ask them 'how are we doing, what do you need?'" Ms. Dixon says. "After all, the key benefit of e-mail marketing is building customer relationships and loyalty. Above and beyond everything else, it's an excellent tool for keeping in touch."

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E-MARKETING TIPS

• Get permission. Don't be a spamster — make sure the people on your list have given you or the company that sold you the list permission to receive marketing e-mail. And to be doubly sure, put an "unsubscribe" link in a conspicuous spot on your e-mail.
• Be relevant. Make sure you're providing information that is current and of interest to your readers. Tie your message to a news event or to a recent development in the subject area you know your readers want to know more about.
• Use concise, to-the-point subject lines. People usually decide which messages to open by quickly scanning the Subject field in their inbox, so make sure your subject line provides a snappy summary of your message.
• Give your e-mail a consistent format. Like a newspaper or magazine, your marketing e-mail should have a consistent look and feel, with format elements or sections that readers can become familiar with.
• Have a call to action. Is the point of the e-mail to get recipients to buy a product, say, or enter a contest? Tell them what you would like them to do and position your call to action at the top of the e-mail so they don't miss it.

Special to The Globe and Mail