According to an article from eMarketer:
In the past, small companies could never hope to compete with the Fortune 100 in terms of direct marketing dollars. But compared to other forms of direct marketing (e.g., direct mail and telemarketing), email is extremely inexpensive. In other words, the mom-and-pop convenience store now has a potent marketing tool to compete with the huge conglomerate at the strip mall.
The key to email’s power, particularly at the local level, is that it is targeted and personal. Indeed, no marketing communications medium exists that is more targetable, customizable, and flexible than email. That is why email is revolutionizing direct marketing. Email direct marketing, when done correctly, can overcome the limitations of traditional direct marketing by offering limitless targeting ability at pennies per email and allowing marketers to have a one-to-one conversation with each of their customers.
With proper targeting, tracking tools and a carefully built optin list, email can be highly personalized to the needs of individual customers. Communications sent on behalf of companies from messaging solution providers can be targeted and customized using sophisticated database marketing techniques. The technology can capture and track individual responses throughout the campaign, “learn” more about customers from response and purchase behavior, and refine customer profiles for future communications. ...