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Targeting and segmentation methods for email marketing are becoming increasingly sophisticated and complex.

If you are “in the business” it is easy to fall into the trap of focusing on the “how” rather than the “why” and the “when” and forgetting what the whole point of the exercise is.

In this piece, I’ll seek to bring things back to basics; it’s no good having the answers, if you’ve forgotten what the question was.

Back to basics

Segmenting for email has always been a bit of a hard pill to swallow. For many years the use of data, segmentation and targeting had been used as a response to the high cost of media.

If you could identify those people who are most likely to buy, and target your marketing directly at them, you could reduce waste and increase your overall return on marketing investment. It was worth it; the extra spend on campaign planning and data work, was outweighed by the savings in media costs (if you got it right).

So along comes email, with campaign and deployment costs being similar, whether you were sending one thousand emails or one million. Overnight the focus became mass media, leading most marketers to seek out more and more volume.

Words like “broadcast” and “blast” were being used to describe the sending of an email campaign (still common words today) and email volumes shot through the roof.

Emails must be wanted

As a response to this, the ISP’s started to get quite protective of their client base, investing in technology to help reduce the load on people’s inboxes. It was pretty basic at first, without complaint feedback and dedicated sender support departments it felt like fighting a war. ESP’s launched out emails, and the ISP’s replied with bounces.

For both sides it was a steep learning curve but the underlying objective of the ISP’s was becoming clear, best typified by this quote from the Yahoo postmaster;

The mission of Yahoo mail is to deliver all the messages users want to receive and none they do not.

Methods used to filter  unwanted email are constantly evolving,. And with Forrester predicting by 2012, twenty five opt in emails will be sent to peoples email accounts on a daily basis, it’s clear you won’t be wanting all of them.                     

The Question

So, we can send out as many emails as we like, because it’s nice and cheap and if the recipients don’t want them, the ISP will junk or block them.

Any email marketer who measures ROI will be able to tell you the difference in revenue performance between emails that go into junk and those that go into the inbox.

So, to be successful in email marketing I think there are two key questions we are trying to answer.

  • How do I get the maximum revenue potential from my email list?
  • How do I send emails to people who want them?

Unsurprisingly they are usually asked in that order, but the answer for both must be the same, and this is why. We send people email messages to influence them; it could be to influence them to buy something or to influence them to engage with your brand.

The objective can be a number of things; the most important thing to remember is that if your email message is not in front of the customer, you’re not influencing anyone.

And by ”in front of the customer”, I mean in the inbox, and opened and read. There is no point in sending emails unless this is the objective. Some ISP’s have already laid bare the fact they use response data to determine whether an email is wanted or not.

So if you are sending emails to people who want them, you will be getting higher response rates, Inbox placement, greater influence and higher sales.

So, could the question be; how do I use email to influence my customers to buy more and therefore increase customer lifetime value?

The Answer

The biggest difference between the last question and the two preceding ones is that within it lie the beginnings of the answers.

It’s quite a departure from sending a weekly newsletter to the total base, to start looking at influencing the customer’s lifetime value using email. For some email marketers, it’s a step too far, as the data needed is still out of reach (although some of the most effective behavioural emails can be set up quite simply).

But for those marketers who are able to identify what stage of the customer lifecycle their customers are at and link this data to their customer’s online engagement, the opportunity to send “wanted” emails is here now.

It’s not as easy as sending the weekly newsletter, but once the revenue potential from that activity has peaked, it will be time to look deeper into the data to achieve the results you need.

Let’s face it; it must make sense to talk to someone in a manner that’s based on their relationship with you. You wouldn’t talk to someone who has just purchased for the first time in the same way you would a lapsed or dormant customer (the frequency would probably be different too).

You would also talk differently to someone who has just saved a basket to one that hasn’t visited the website in some time. They fit into justifiably different segments of behaviour and lifecycle with different objectives and opportunities for influence. 

Sending them an email based on who they are and what they are doing will be far more “wanted” than one that isn’t relevant.    

Most people will be on your list because they want to and they don’t want to unsubscribe because they still want a relationship with your company and therefore have future revenue potential.

The trick is to be better at achieving revenue from your list than your competitors are.

Tim Roe

Published 30 June, 2011 by Tim Roe

Tim Roe is Director of Data and Deliverability at Redeye International and a contributor to Econsultancy. Follow him on Twitter, Google+ or connect via LinkedIn

22 more posts from this author

Comments (5)

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Dan Rees

Absolutely spot on. This is exactly the type of message we are trying to convey to our customers to help them follow best practice guidelines. With the right tools, especially when connected to things like CRM, E-Commerce sites and accounting software, responsive campaigns based on events, past purchases and any number of information stored in a database can deliver fantastic ROI no matter what industry you are in. Since employing Copernica to deliver not only email but SMS, surveys and landing pages we have seen relevancy increase and cost reduce for all our clients.

over 5 years ago

Peter Bordes

Peter Bordes, CEO & Founder at oneQube

Outstanding post. you have clearly captured and articulated what is key to the next gen of email marketing. Gone are the days of thinking "mass marketing". email marketers need to start thinking about :one on one" marketing to the consumer. its the same trend of less impression and more relevance in display.

This will increase deliverability. data longevity and roi. less turn over makes for a happy emailer, consumer and esp.

over 5 years ago

Tim Roe

Tim Roe, Deliverability and Compliance Director at RedEyeEnterprise

Thanks for the comments, the battle is still to wean email marketers away from the newsletter approach, to segmented data driven campaigns. Spending at least as much time on selecting the data as developing the creative, will reap good rewards. I’ve heard customer focused marketing called “upside down marketing” but for me, it’s the right way up!

over 5 years ago

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Sarah Needham

I've just stumbled across this piece and have to say that it's all very interesting to a complete novice. I'm going to need to start using e-mail marketing for a new website that's currently being built and have to say that I have no idea where to start...do you have any advice or recommended reading/sites?

over 5 years ago

Tim Roe

Tim Roe, Deliverability and Compliance Director at RedEyeEnterprise

Hi Sarah,
I’m glad you found the piece interesting. I’m not sure what you mean by a novice, but I’ll assume Digital as well as email. I think one of the best places to start is “Internet Marketing” by Chaffey, Johnston, Ellis-Chadwick and Mayer as it clearly explains the key elements of Digital Marketing and how all the elements fit in strategically and tactically. It’s full of great information logically organised and makes a good read and future reference. ISBN-13:978-0-273-69405-2

The next I would choose would “Successful Email Marketing Strategies” by Hughes and Sweetser as the book goes into the detail of developing marketing strategies specifically for email, is clearly written and enjoyable to read. The book explores customer strategies, life time value and ROI specifically in the way it relates to email marketing. ISBN-13: 978-1-933199-16-0

One of my all time favourites, although not email biased, is “Drilling Down” by Jim Novo. This book is focused on how to use your customer data to make more money with direct marketing. It’s an entertaining and enjoyable read, but the (proven) concepts that Jim discusses will change the way you look at response data and customer segmentation forever. ISBN-13: 978-1591135197

Last but certainly not least Is “Common Sense Direct and Digital Marketing” by Drayton Bird. This was one of the first DM books I read, and the quote from David Ogilvy "If you read no other book on direct marketing you should find the time to read this one” sums this book up. It’s easy to read and full of what you need to do to make direct marketing work, and what you need to avoid if you don’t want to get it wrong. Drayton’s one of the heavy weights of Direct Marketing, and a superb copywriter, which makes reading this book very enjoyable and difficult to put down. ISBN-13: 978-0749447601

If you do read any of the books I suggest here, I hope you find them as useful and enjoyable as I did.
Tim

over 5 years ago

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