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Your Email Delivery Expertswww.netatlantic.com
Make Your Emails Matter
Increase Email Relevance
Through Segmentation and Targeting
by Marianne CellucciCertied Email Marketing Specialist
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1. Serve Up Relevant Content
2. Apply Prole-Based and Behavioral-Based Targeting
3. Automate Customer Liecycle Messaging4. Achieve the Right Contact Frequency
5. Test the Segmentation Strategy
pg 7
pg 11
pg 14pg 19
pg 22
Table o Contents:
Increase Email Relevance Through Segmentation and Targetingby Marianne Cellucci, Certied Email Marketing Specialist
Make Your Emails Matter
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Segmentation is the process o dividing a market segment
into distinct manageable groups o consumers that are
likely to behave in a similar manner or share a similar set o
needs or characteristics, and selecting one or more groupsto target with a distinct marketing message.
What is Segmentation?
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Segmentation gets results!
With email marketing, batch and blast is a
thing o the past. Todays organizations must
gain a better understanding o their target
audience. The key objective o segmentation
is to increase the relevance o your email
communications to add more value and
drive response, ultimately increasing revenue
or your organization. You want to learn who
you engage so you can properly ocus your
marketing eorts and maximize eciency,
since you cannot be all things to all people.
Segmentation can greatly improve the
response o your email marketing campaigns,
raising the open rate rom an average o 20%
to 50%, and raising your clickthroughs rom
5% to 30%. This improvement in response is
because the message is more aligned with
the readers interests and needs. Improved
email campaign response translates directly
into increased productivity, return on your
marketing eorts and investment, and
higher protability.
Why is segmentation so important?
Segmenting gets your email
to the people who want it the
most, helps inbox delivery,
increases user engagement,
and enhances long term
protability.
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The Email Marketing Continuum
Batch & Blastto ALL subscribers
A/B Split Testing SegmentationEmail Campaign
Automation
Merge Areas &Keyword-Based
Templates
Range o Campaign Tools & Supported Applications:
Eectiveness:
Low
Eectiveness:
High
CompanyPromotions
News & Updates
Subject Lines Layout Design Content Oer Frequency
Business Segment Retail vs.
Commercial Gender, Age, etc. Purchase
Frequency Region, Language
Auto-ResponseEmails
Event Triggers Behavioral
Triggers Scheduled
Campaigns
Templates Basedon SubscriberInterests andSurveys
Content BuiltFrom SearchableKeywords in
Subscriber Data
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Once youve segmented your list, you can stay
relevant with your customers and prospects
via ongoing communications that engage
them with your brand.
As you observe patterns and begin to know
your audience more intimately, you will be
able to respond with custom marketing
messages and oers that quickly address their
varying needs and wants.
Youve heard it beore its all about quality,
not quantity. A large email list is not worthmuch i subscribers are not engaged with your
brand.
Tip:
Observe and Serve
The number one reason people
decide to unsubscribe rom an
email is because the message is
not relevant to them. Observe
your audiences online activity so
you can segment and serve them
appropriately.
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Delivering highly relevant content requires
much more than capturing basic transactional
data or an email address using a subscription
orm. This is because whatyou think is
relevant and what aprospect or customernds
relevant may be dierent things. Relevancyshould be based on customer understanding
and insight gathered rom both behavioral
and prole-based data. Segmentation lets you
capture vital data about who your prospects
and customers are and what interests them.
The more inormation you can collect about
them, the more innovative you can make your
targeting strategies. The more segments you
have, the more ocused you can be aboutcharacterizing the various groups within your
email list.
The result: subscribers get useul relevant
content and subsequently purchase more.
In a Q1 2009 survey, Forrester Research
ound that while email marketers are
starting to realize that click-based behavioral
segmentation works and that 51 percent
o email marketing executives responding to
the survey said theyve used clickthrough datato segment audiences or email campaigns
within the past six months there are still
almost hal who dont.
Yet, email marketers who employ
segmentation strategies and integrate
behavioral targeting are our to six times
more eective than those marketers who
blast the same message to every subscriber.Those who spray and pray with untargeted,
mass, generic email blasts will see diminishing
returns and a negative impact on opens,
clicks, conversions and unsubscribes.
Serve Up Relevant Content
1.
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SOURCE: Q1 2009 Global Email Marketing and On-Site Targeting Online Survey, Forrester (base o 1 03 marketing executives)
As more marketers embrace segmentation, this
raises the stakes or those that spray and pray.which o the ollowing customer data attributes has your company used tosegment audiences or email marketing compliance in the last six months?
Click-through data
Demographic data
Open rate
Geographic data
Recency and requency o purchase
Customer spending
Customer protability
Acquisition source code o the list
Website clickstream data
Customer service contact
Customer satisaction survey
Widget interactionContribution to product reviews
51%
51%
48%
47%
39%
30%
29%
28%
24%
23%
21%
6%5%
Tip:
Keep Your List Up To Date
One-third o US email users create
a new email address every year.
Use a list cleaning and appending
tool to keep in touch with them.
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74% o people are infuenced by the opinions o
others, and 47% read reviews beore purchase. ManageSmarter, September 2009
In addition, the infuence o product reviews
and social commentary cannot be ignored.
Marketers who use product review data within
email have reported higher response rates
compared to those who dont.1
Even in light o higher open rates, higher order
values, higher click-through rates and higher
conversions, email marketers are still not
tapping the ull potential o segmentation and
list ltering to better respond to the interests
and needs o individual customers by serving
them relevant content.
Although another study shows that as many
as three quarters o email marketers claim to
use segmentation2 they tend to collect basic
data. 87% o marketers capture only contact
inormation rom subscribers, but only 28% go
on to capture demographic data (age, gender,
location etc).3 Thereore, based on these
statistics, it appears that most marketers ail
to capture inormation that enables targeted
messages to be sent to segmented lists.
1. SOURCE: The ROI o E-Mail Relevance,Forrester (2009)
2. SOURCE: Global Interactive Marketing MaturityOnline Survey, Forrester/MarketingPros (2009)
3. SOURCE: Email Marketing Benchmark Report,MarketingSherpa (2010)
Tip:
Segment Your List by
Social Engagement Metrics
Use data like sentiment, orwards,
votes, eedback, survey responses,
and social commentary.
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Why do so many marketers ail to gather and
use more detailed data? One reason might be
because it seems like a complex and dauntingtask. It s true that behavior-based, trigger-
based and liecycle-based segmentation are
more time-consuming to set up. However, the
reward o segmenting your list using just a
ew elds o vital data is very high.
So work hard at engaging in a dialogue with
consumers about what they want and need,
and deliver dierentiated messages andexperiences.
Tip:
Keep Content Relevant
Beore sending an email to your
segment, ask yoursel Are the
recipients really going to care
about the content o this email? I
the answer isnt obvious, then you
are taking a risk that there will be
a higher number o non-responses
and opt-outs. The more relevantthe content, the more likely the
recipient is to pay attention to your
next communication.
Despite additional campaign costs, relevant
campaigns increase net prots by an average o18 times more than do broadcast mailings.
Jeannie Mullen and David Daniels,
Email Marketing: An Hour a Day (JupiterResearch)
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The most powerul aspect o an email
marketing solution is its segmentation eature.
Current email marketing tools let you store
more detailed data and run very tightly
messaged campaigns. You can group your
subscribers based on criteria you choose.The key is to nd the variable(s) that divide
your audience into segments (e.g., socio
economic, special interests, geographic
regions, purchasing behavior, etc.) that can be
measured and acted upon.
With the incredible amount o customer
data available today, it is possible to
successully build your business in these
groups or segments than ever beore. This
strategy, oten reerred to as microtargeting,
enables marketers to tailor their messagingby industry, region, market, age, interest,
income, gender, and several other actors. The
technology limitations o the past no longer
prevent storing detailed inormation. Beyond
that, micro-segments can change as people
take dierent actions, ulll needs, and shit to
new income strata.
Apply Prole-Based and
Behavior-Based Targeting
2.
Prole targeting has been around orever, but
activity targeting is newer, driven by online tools
such as web tracking and purchase history.
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Data you have alreadycollected:
Transactional: date purchased,products purchased, quantities,
method o purchase (online, phone)
Lietime inormation: number o
sales, number o products purchased,
average lietime order size, average
time between orders
Contact Inormation: customer
name, address, phone number, email
Source/promo code: how the
customer was acquired
Customer type: repeat buyer,
inactive, or a new customer
Online behavior: past opens or
clickthroughs, web page visits and
conversions
Customer satisaction: past
experiences with your company;
survey responses
Data you shouldcollect:
Demographics: age, gender, income,education, race, marital status, amily
size, region, size o city, job
Geography: countries, states, Zip
Codes, telephone numbers, ISPs, and
distance rom your store
Psychographics: personality and
emotionally based behavior linked
to purchase choices, such as riskaversion or impulsiveness
Liestyles: hobbies, recreational
pursuits, entertainment, vacations,
and other nonwork-time interests
Belie and value systems: religious,
political, nationalistic, and cultural
belies and values
Lie stages: chronological
benchmarking o peoples lives
at dierent ages (e.g., preteens,
teenagers, empty nesters, etc.)
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Automated liecycle messaging enables you
to deliver dierent messages to dierent
users based on the relationship liecycle
customers have with your brand (e.g., level o
engagement, purchases, and behavior).
Activity is dened as opening and clicking,
both o which are treated separately. The
crucial elements o this type o segmentation
technique are the rules that you set or each
segmentation level, which will be highly
dependent on your email activity. Below are
some example rules or a retailer sending out
approximately 4 emails a month:
Customer has engaged
A within the last month
B between 2 and 3 months ago
C over 3 months ago
D has never opened or clicked
This type o behavior-based segmentation
can be set up to run automatically within your
email database, not requiring any input rom
the user other than to utilize the data that is
being ed through. The data is captured on a
live basis, i.e. opens and clicks are recordedas soon as they happen, giving you the
advantage o knowing that the segmentation
you are using is 100% up to date. This is
something that cannot always be guaranteed
using prole-based segmentation.
However, depending on what your niche
is, it may serve you well to segment based
on the circumstances that are infuencingconsumer decisions, rather than segmenting
the market based on demographic or
psychographic characteristics. For instance,
you may be a Financial Advisor that sends out
email newsletters containing topics covering
nancial planning. I a subscriber clicks
Automate Customer Liecycle
Messaging
3.
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Retirement Counseling vs. Child Education
Planning, you can saely assume you have
an older target. You can get even more
granular. I the subscriber clicks on Retirement
Counseling rather than Mid-30s Guide to
Planning or Retirement you have someone
later in the buying cycle. In this example, the
consumers who chose retirement counseling
will have dierent needs than the consumers
who clicked on mid-30s guide to planning or
retirement.
An automated email system allows you to track
activity and engagement level.
Tracking a prospects rst online engagement
with your company through the entire sales
unnel will allow you to crat more relevant
messages that will not only help you build
stronger connections with your customers,
but will increase conversions and drive
revenue.
I you start to think o your email campaigns
Relevance-empowered email drives higher
top- and bottom-line improvement.
Improved ROI
No Targeting Web Analytics Targeting Social Targeting
$159
$40
$540
$185
$664
$239
$840
$306
Monthly
Revenue
Monthly
Net Prot
Dollars Generated Per Month
(in thousands)*
Type o Campaign/Tactics Used
* Metrics are based on a Forrester executive survey. Based on 2.8 million pieces o email per month, CPM ranges grow with
program complexity, assuming $39 AOV and 40% product margin.
Source: Q1 2009 Global Email Marketing and On-Site Targeting Online Survey, Forrester (base o 103 marketing executives)
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By combining geographic segmentation
with psychographic (socioeconomic status,
or personality) variables, you begin to gain a
better understanding o the customer which
will enable you to hone your message to
deliver more relevant content. For example,
a emale customer in a high income bracket
makes a purchase every three months.
You should set up an automated nurturing
campaign to market to this customer near the
end o this cycle, oering discounts to entice
her to not only make another purchase, butpossibly increase her spending.
Tip:
Let Your SubscribersSel-Segment
Ask your subscribers what you
need to know and add it to yoursubscribers proles. This gives you
a clear idea o how the segments,
and your communications with
them, will dier.
Right Time
Right Message
Right People
Engage subscribers at the point o relevance with
automated email campaigns
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With this type o segmentation strategy you
deliver highly targeted, meaningul and
hyper-relevant messages that are unique to
each subscriber based on prole and lie stage
when they want to receive them. This type o
approach serves to create experiences that
enhance the relationship between customer
and company by building deeper, more
meaningul and sustainable interactions as
they pass through dierent stages in their
purchasing liecycle, while at the same time
reducing the untargeted emails that clutterthe inbox.
Customized Merge Fields
In order to add demographic inormation to
your email database, create the new elds/
attributes in your email marketing solution
and then upload your list. Your subscribers
will be matched by email address and the
new attributes will be added to their record.You can then tailor a message automatically,
sending the right message to the right people
at the right time.
Triggered Automation
Filter people based on triggers and actions,
such as a particular event in time (i.e., acertain date), or behavior (clickthrough
action), or purchase, and market to them
specically based on that behavior. The result
is that an email response to the segment
will automatically be sent when the trigger
clause(s) are met; these email responses
can contain changeable content or static
content, sent to the recipient immediately
or over a period o weeks, once the event is
triggered by the recipient. Once congured
and automated, your email campaigns are
executed without eort.
Tip:
Timing Is Everything
Automated trigger emails cater tothe immediate interests and needs
o the recipient and elicit higher
responses because they are timely
and more relevant.
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One o the most requently asked questions
we get is, How oten should we send email
messages to our list?
Our answer: Not too much, but not too little.
Since your goal is to increase email relevance,you should use list segmentation to determine
the content your subscribers want to receive,
in order to send each prospect or customer
the most relevant message at the right time.
You should use this technique to determine
what contact requency is appropriate (e.g.,
while responses may be higher with weekly
mailings or one group, another group may
respond better when mailing requency isbi-weekly or monthly; you can test sending
a higher requency to your most engaged
members).
Generally, subscribers will not mind receiving
emails rom you i the messages are relevant.
Frequency isnt just about how oten you want
or need to send your messages. It must take
into account how oten your subscribers wantto hear rom you. Each marketer will nd that
dierent rules apply or their prospects and
customers. As your approach becomes more
targeted, and your emails more relevant, you
will begin to automatically establish the right
requency or each customer segment.
Achieve the Right Contact
Frequency
4.
Tip:
Dont Send Too Oten, orToo Inrequently
Gain insight rom customer
eedback, preerence center data,
and email metrics or actors that
can help you set useul requency
parameters.
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Dont Send Too Inrequently
Its important to nd the right balance when
it comes to sending email. Although youdont want to abuse the privilege by sending
too requently, its also possible to send too
inrequently. I you go or long periods o time
without sending any email communications,
and then you start sending regular blasts
around a holiday, specic event or season, you
may once again trigger unsubscribes or spam
reports.
Although you must decide the right
requency or your particular business, try
not to let more than a month go by without
contacting subscribers, either with regular
content relevant to your subscribers or with
administrative requests, such as an invitation
to update their preerences, product updates,
scheduled training courses, new data sheets,
and other service-related materials.
Watch or trends. Declining response, open
and clickthrough rates can be signs o list
atigue.
The key to establishing the right contact
requency is to plan, test, modiy, analyze and
rene your campaigns. The ollowing actors
can help you set useul requency parameters:
Customer Feedback
Are you paying attention to what your
subscribers are telling you when they
unsubscribe rom your email or newsletter?
(You should ask subscribers why they are
unsubscribing, either through a short survey
or comment eld). They might be letting youknow that youre sending too much email, or
the messages youre sending are not relevant.
Email Metrics
Since email provides marketers with more
data than most marketing channels, use your
own metrics to evaluate and establish your
requency mix. Determine requency based
on the responses you receive to each emailmarketing campaign. That said, i you change
the requency o your email campaigns, be
sure to test the increased requency on a small
sample o your total customer base beore
deploying to the entire group.
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For example, i 20 percent o subscribers
clicked on the Order Now link in your email,
but only 10 percent o them converted by
completing the transaction, wouldnt you
consider the ones who clicked but did not buy
interested leads?
Email makes it easy to try and convert the
other 10 percent. You can tailor a campaign
to the olks who expressed interest in your
product or service, test the creative and oer,
and then send it about a week ater their
original click-through. Keep a close watch on
the responses you receive. Use your metrics as
a map to adapt a strategy or conversion.
Customer Preerence Center
Deer more and more to the communication
preerences o your subscribers and allow
them to select how requently they want to
receive messages rom you, and the type
o content they want to receive (e.g., email
triggers such as product updates and service
reminders). Basically, the more relevant
the messages you send, the more you can
increase your email requency.
Tip:
Keep Them Engaged
The number one reason people
decide to unsubscribe rom an
email is because the message is
not relevant to them. Keep youraudience engaged by ensuring
your email communications
are targeted specically to your
audience.
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A robust email marketing solution allows
or greater precision and fexibility in testing
than other orms o marketing, and advanced
eatures such as segmentation, A/B testing,
and automation enhance your ability to match
your subscribers interests.
Segmentation
When it comes to segmenting, testing allows
you to gather evidence and metrics which
you can use to draw conclusions and drive
decisions, rather than relying on gut instincts.
Start with a single attribute to divide your
mailing list and continue to subdivide until
you reach divisions that include groups o like-minded individuals expected to respond to
your emails in similar ways.
As discussed above, methods include
demographics, geographic, psychographic,
liestyle, belie and value systems, lie stages.
Some marketers choose to implement a
simple segmentation process that treats
subscribers who requently open messages
dierently rom those who only occasionally,
rarely, or never open messages. Another
strong segmenting technique is to segment
an email list by customer activity, including
click-behavior and purchase history.
Test the Segmentation Strategy
5.
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Segmentation, Plus A/B Testing
Once you have segmented your mailing list
based on actionable data, send dierentemails to each group. The campaign with the
highest percentage o opens, clickthroughs,
orwards, conversions, and least amount o
unsubscribes should be sent to the remaining
recipients. As you gather more actionable
data, you can continually test targeted,
relevant communications, such as:
Ofers and Incentives: Determine whatoers are likely to increase engagement
and conversion rom your target audience
(e.g., pricing, discounts, and ree trial vs.
hard sell, ree shipping vs. discounted
shipping).
Best day and time: Divide your list into
various groups and send on dierent days
and at dierent times, to determine the
best combinations or your mailings.
Email creative:Test design and navigation;
use a dierent image or layout to elicit
dierent behaviors rom your customers
(e.g., text email vs. HTML, columns vs. a
single layout, or test graphics and colors).
From Field: Select a name that is instantly
recognizable to the recipient to indicate
that your message is rom a credible and
trusted source.
Subject lines:Test dierent subject lines
or dierent customer segments (e.g., useo personalization vs. non personalization,
short subject lines vs. longer ones).
Landing pages: Create and direct people
to dierent versions o your landing page
(A/B test) to determine which version is
more appealing and eective.
Youre not trying to be all things to all customers.
Youre trying to be one thing to one customer.
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Measure and Analyze Your Test Results
Now that youve collected all that data, its time to measure and analyze the results to gain abetter understanding o your subscribers. Even the smallest percentage dierence can mean a
signicant increase in response rates and revenue.
Opens increasedby %
Clickthroughs increased by %
Conversions increased by %
Website trac increased by %
Sales increased by %
Calls increased by %
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Segmentation is the tool that enables you to
identiy dierent groups o customers and
prospects, and provide the best possible
products and services to meet individual
wants and needs.
Although segmenting your list takes
more time and eort, it doesnt need to
be a daunting task. Even the most basic
segmenting will result in signicantlyhigher conversion rates than one-o email
blasts alone. Start by dividing your list into
smaller groups o people who share certain
characteristics and send each group a ocused,
targeted and personalized communication.
Segmenting your list allows you to create
hyper-relevant content that is targeted to
each subscriber.
By targeting your message, you increase
the probability o them opening, reading
and purchasing rom you. The key is to
properly select the appropriate variables or
list segmentation, and ensuring that each
segment receives a unique and personalized
message that is relevant to their needs.
Again, email marketing oers wonderul
segmentation opportunities. I you are not
segmenting your list and sending more
relevant communications to your target
audience, start doing so today. I you are
segmenting your list already, try to nd new
ways to narrow your segments. The moresegments you have, the more ocused you can
be about characterizing the various groups
within your email list.
The churn rate o acquiring new customers
will cost you more than identiying the most
engaged subscribers on your list through
segmentation.
Eective segmenting will not only help youoptimize your list by dierentiating between
protable and less protable customers, it will
have a substantive impact on your bottom
line, and put you ahead o your competition.
Conclusion
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Founded in 1995, Net Atlantic, Inc. is a global email service provider (ESP) oering email
marketing solutions, branded reseller programs and dedicated email marketing servers. Net
Atlantics goal is to help businesses maximize ROI with email tools like video emails, triggered
and sequential mailings, A/B/N split testing, conditional messaging, custom surveys, click
streaming, spam analysis tools, open database connectivity, and an open API (application
program interace or even urther customization). Net Atlantic was one o the rst emailmarketing companies.
Visit www.netatlantic.com, or contact an account executive toll-ree at 978-219-1900.
About Net Atlantic