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Really Simple E-mail Segmentation: A Framework

  |  June 2, 2008   |  Comments

How to build the framework for segmenting your list and targeting content to improve an e-mail marketing program's performance.

Segmenting your list and targeting your content are good ways to improve your e-mail marketing program's performance. But many companies are operating under the false belief that they don't have the information they need to segment and target. Even if all you collect at opt-in is an e-mail address, you should have the information you need to segment and target your missives.

In this column, I'll lay out the framework for a very simple segmentation of your list. In future columns in the series, I'll talk about how to target content to these segments to improve your e-mail marketing results -- and your bottom line.

Exercise 1: Basic Segmentation

Let's begin with the simplest segmentation possible: brand-new and older members of your list:

New E-mail Contacts

You should be able to identify new members of your list, no matter what e-mail service provider (ESP) or in-house e-mail solution you use. These people are special; they have just agreed to enter into a relationship with you. You have a honeymoon period in which you can build on this new relationship. This is an opportunity many organizations don't take full advantage of; in the next column I'll look at easy ways to make the most of it.

So our first segment is new contacts; people who've joined the list in the past 30 days.

That's a good start, but we can go further.

Providing e-mail metrics is standard operating procedure for every legitimate ESP and in-house e-mail send solution out there today. Even the lowest cost providers offer e-mail metrics. If you're not getting them, you need to look at other vendors and make a change. If you are getting them, you have a valuable segmentation opportunity.

The standard e-mail metrics we'll focus on here are open rate and CTR (define). I'll also toss in conversion rate -- that is, people who have purchased, completed a lead generation form, or otherwise taken the action you are looking for -- which you should also be tracking. Many ESPs make this easy, offering code you can put on your Web pages to report on post-e-mail conversions. There are also ESPs and Web analytics programs that work together to provide a start-to-finish view of e-mail performance.

This model will still work without the conversion piece (you'll just have three segments instead of four), but I strongly recommend you add conversion tracking into your e-mail metrics. It's the only way you can truly measure success or failure if the action you want an e-mail recipient to take resides on your Web site.

Here's an overview of the segments we'll be using. The percentages will vary from list to list, but the categories remain consistent:

Depending on your send frequency, you'll want to use a timeframe of from one to six months. In general, the more frequently you send e-mail, the shorter the period you can use. Caveat: you may have seasonal or other issues that require an adjustment to these periods. Don't stress about it; just change them to reflect realistic periods for your audience.

For a company sending a daily e-mail to the entire list, a month's worth of data should more than suffice. If you send weekly, I'd recommend looking at three months' worth of data. For those sending monthly, I'd go with six months of data.

Exercise 2: Further Segmentations

We've already isolated people brand-new to the list in our first segmentation group. For the next exercise, exclude people who don't meet your term requirement. So if you're looking at six months' worth of data, you'll want to exclude anyone who hasn't been on your list for a full six months.

This leads us to our second segmentation group: those who have not opened, clicked, or converted. Common names for this group are "inactives" and "deadwood," since subscribers aren't actively engaged with your e-mail program. You'll want to isolate metrics for the period you're reviewing and identify people who haven't recorded an open, a click, or a conversion during this period. We'll talk about how to target content to these people in a future column (if the term "reactivation campaign" means anything to you, you probably know where I'm going with this).

Our third group is a step above the second: people who have opened e-mail, but not clicked or converted. You might call these folks "voyeurs," since they look but don't click; "lookie-lous" also comes to mind, from that old real estate commercial about people who attend open houses with no intention of buying. This group poses a different challenge from the second. They are at least catching a glance of the e-mail (in the preview pane, if nothing else), but they aren't motivated to click. More on how to better engage these folks in a future column (hint: it's all about the e-mail body).

Our fourth group is those who open and click but don't convert. This is your "close but no cigar" group. They get so close, but they never complete the conversion. We'll talk in detail about how to move them forward in a future column, but one thought to sleep on: it's all about the landing page.

The fifth group is your rock stars: people who have opened, clicked, and converted, taking the action you wanted them to. But that doesn't mean you work is done. We'll talk about some basic goals and options for helping this group meet them. We'll also discuss a variety of ways to further segment this group, assuming you have the data, for maximum impact.

So that's the setup. Start working to segment your list based on these parameters -- and feel free to e-mail me with questions. I'll cover ways to provide relevant, targeted content that moves members of each group forward in the relationship in upcoming columns.

Until next time,

Jeanne

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ABOUT THE AUTHOR

Jeanne Jennings

Jeanne Jennings is a 20 year veteran of the online/email marketing industry, having started her career with CompuServe in the late 1980s. As Vice President of Global Strategic Services for Alchemy Worx, Jennings helps organizations become more effective and more profitable online. Previously Jennings ran her own email marketing consultancy with a focus on strategy; clients included AARP, Hasbro, Scholastic, Verizon and Weight Watchers International. Want to learn more? Check out her blog.

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