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Innovation Is Great, but Remember the Basics

  |  October 3, 2012   |  Comments

Four different types of list segmentation that can help you boost your revenue per email.

Email marketers are always eager to learn about what's new and innovative, such as including social-graph data into a database, using device-based responsive content, and integrating email with mobile and display.

But I'm often amazed to find out during these discussions how many of these marketers aren't making the most of basic email strategies.

A recent Emailvision survey found only one in five marketers actively segments and personalizes email content across all campaigns, even though the same survey found 68.4 percent of marketers agreed with a statement that targeted and personalized email campaigns are "very important" or "important" (28.1 percent).

Remember List Segmentation?

Dividing your list into subgroups and sending targeted messages to each group is a key tactic to raise the performance of your email program but one that many marketers ignore.

It might not be new or innovative, but it has proved to be one of the best ways to maximize open, click, and conversion rates. My clients average three times the revenue per email (RPE) with targeted campaigns compared with broadcast campaigns.

In this column, I will describe several types of segmentation approaches that I consider to be most effective.

How Segmentation Works

With proper segmentation, you can use data points related to your subscribers' profiles and shopping behaviors to send them highly relevant content that in turn encourages them to convert at a higher rate.

You can slice and dice your email list into many different kinds of segments:

  • Subscriber demographics
  • Past purchase history
  • Behavior on your website
  • How they interact with your email program

Engagement Segmentation: Who Clicks

Engagement segmentation - segmenting your list by active and inactive subscribers - is the simplest way to start segmenting your list. It is based on who is clicking on your email. Now that ISPs are using engagement as a key element of sender reputation, it's even more important that you maximize your engaged subscribers to keep their emails delivered to the inbox.

The first step is to set up appropriate segments based on your sales cycle. Then, schedule a re-permission campaign after a natural progression point, such as these:

  • Six months after last click
  • Ten months after last click
  • Twelve months after last click

Consider a shorter time period for high-value customers.

After you master basic segmentation like this, you can further segment your customers to tailor campaigns even more closely. Segmenting based on level of activity, for example, allows you to create a unique segment for high-value purchasers and offer exclusive deals for your VIP customers.

Segments based on gender, age, and income all help to create stronger, more personal email campaigns that will resonate with your customers.

But it's a fine line to tread. Over-segmenting can inadvertently limit your email outreach by over-targeting customers. These campaigns could end up costing you more to create than the ROI you generate.

To find the right balance, you must continually monitor your segments to ensure consistent levels of engagement.

Email Behavioral Segmentation: What They Click on

Email behavioral segmentation is based upon what a subscriber clicks. Marketers can use the specific link clicked, the category of links clicked, or both to indicate "in-market" purchase intent.

For example, if a subscriber regularly clicks on links related to girls' clothing, this is a good indication that the subscriber is in-market for girls' clothes. However, a single data point is not enough to indicate a trend. Look back at link-category click behavior over several mailings to build a segment.

Website Behavioral Segmentation: What They Browse

Similarly, website behavioral segmentation is based upon what a subscriber is browsing on your website. Use a web analytics package to determine which products or product categories your subscribers have viewed to indicate in-market purchase intent.

As with email behavioral segmentation, don't rely on a single data point to determine a segment. Look at several data points to find a trend.

Purchase Behavior Segmentation: What They Bought

Purchase behavior allows you to segment based on the recency, frequency, or monetary value of your subscribers' purchases.

This approach has one drawback: it relies on historical data to predict which product or service your subscriber might be in-market for. You take the risk that the subscriber's needs have changed.

Using this data in conjunction with browse or click data is the most effective way to hedge against this risk.

The Last Word

Innovation is important, but so is making sure you are taking full advantage of basic email marketing principles.

Don't fall into the trap of spending all your time, effort, and budget on something that might be new and untested when you can harvest plenty of low-hanging fruit by building on the basics.

Back to Basics image on home page via Shutterstock.

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ABOUT THE AUTHOR

Mike Hotz

Mike Hotz is a senior strategic consultant for Responsys, working with clients to design, develop, and execute cross-channel digital marketing strategies that contribute to their cross-channel digital marketing success. As an industry veteran, Mike has worked in e-mail marketing since 1998, designing, building, and executing e-mail and multichannel direct marketing strategies focusing on increasing customer engagement, nurturing leads, supporting sales organizations, and driving revenue for companies such as CDW, OfficeMax, Grant Thornton, and Digitalwork.com.

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