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.