Smart Segmenting for Your E-mail Campaigns
Sorry to break it to you, but not everybody in your e-mail database reads every e-mail you send. I know, hard to believe.
In fact, a recent study by Merkle called View From The Inbox 2009 showed consumers have e-mail relationships with only 10 companies, and those companies are the ones that send them the most relevant e-mails. To become one of those 10, you have to do some smart e-mail list segmenting.
Segmenting your list isn't very difficult, and your boss likely will be impressed by the results. To give you an idea of segmentation’s impact, I’ve seen some marketers increase their clickthrough rates 200 percent to 300 percent just by targeting certain e-mails based on previous e-mail activity.
At its core, segmentation starts with knowing customers’ life cycles, which typically include four main stages: prospect, new customer, active customer and inactive customer.
Let’s focus on active customers. This is where you can strengthen their loyalty to your business with relevant messaging.
The first, and arguably most critical, step is to determine who’s in your active audience. This depends on your specific business model. If you sell smaller-ticket items, for example, you may define active customers as people who’ve purchased products in the last six months. If, on the other hand, you sell a product or service that has a much longer sales cycle, you might consider customers to be active if they dialed in to your call center in the last three months, regardless of whether they made purchases.
Once you can place your customers into the active bucket, you can fairly easily drill a little deeper for further segmentation. No matter how sophisticated your database is, the place to start looking is at previous e-mail activity. And if you aren’t keeping this history, you should start right away.
There are two things to consider when analyzing e-mail activity:
- Types of messages. Examples of different types of messages are special offers, products announcements, welcome messages and newsletters.
- Activity within those types. You typically can categorize e-mail activity into a few groups. If you’re just starting, you can determine your segmentation by finding the main three to five groups that most people fall into, such as the following:
- Group 1 — opens and clicks almost every e-mail. This group is highly engaged with your brand.
- Group 2 — opens and clicks only special offer e-mails. This group is engaged and actively looking for deals.
- Group 3 — opens only special offer e-mails but doesn’t click them. This group is engaged, but doesn't like the offers.
- Group 4 — haven't opened special offer e-mails in six months. This group is unengaged.
Once you identify these groups, you can adapt future messages based on how they’ve previously performed. This process must be continually tested and evaluated. After all, customers move from group to group over time, so you need to be flexible with your communications strategy.
Good luck, and start segmenting.
Clint Kaiser is director of strategic services at Merkle, a Columbia, Md.-based database marketing agency. Reach Clint at firstname.lastname@example.org.