E-mail Marketing 2.0: Segmentation strategies that revolutionize ROI
Speakers Hallie Mummert Editor in Chief Target Marketing Luc Vezina Director of Strategy & Product Management GOT Corporation Reggie Brady President Reggie Brady Marketing Solutions Brent Laderoute Director of Advertising West49 Inc.
Email Marketing Effectiveness Email sent to in-house list has the greatest results Source: ad:tech, Year End Survey, December 2003 & December 2004. Methodology: The two surveys draw from ad:tech attendees and newsletter recipients (290 in 2004 and 264 in 2005). The audience is not representative of all marketers, as the show is slanted towards online marketing and its practitioners making it an interesting sample.
Some more stats They want it via email: 61% prefer to receive marketing materials via email They ll open your email: 77% will open marketing emails from trusted sources They ll respond to what is relevant: 76% want to receive relevant marketing emails You ll drive repeat business: 67% more likely to visit your website after opening a marketing email Source: MarketingSherpa, Email Marketing Benchmark Survey, November 2006
What has changed? Why? Falling open and response rates Source: MarketingSherpa, Email Marketing Benchmark Survey, November 2006 Methodology: This fifth annual survey was opened to selected MarketingSherpa reader lists on Oct. 26 and closed on Nov. 1, 2006. 3,637 total responses were collected from email marketers (2,492) and employees at agencies/esps working with email (1,145).
Reason 1 New Definition of SPAM SPAM 1.0 I did not opt-in for this SPAM 2.0 This isn t relevant and/or I don t trust the sender
Reason 2 Deliverability is increasingly complicated
ISP Filtering
Email Marketing 2.0: Relevance & Trust Marketers can focus on marketing ESPs provide the tools and technical support
Email Marketing 2.0 One-to-many vs. One-to-one
Email marketing is direct marketing Each dollar spent on direct marketing yields, on average, a return on investment of $11.65... compared to $5.29 for non-dm advertising. From the 2006 Direct Marketing Association annual report
Tactics Targeting Building trust Deliverability
Email Marketing 2.0 Segmentation best practices Regina Brady ReginaBrady@att.net (203) 838-8138
Segmentation starts with Sign up
Sign up strategies Make email sign-up visible and above the fold on your home page Best practice: At a minimum collect email address, name, postal address, and delivery preference (text or HTML) Registration form tips Restate benefits Make it vertical Shaded yellow backgrounds on mandatory fields Include a link to your privacy policy Don t ask for their entire life history
Make it short Short form had 70.5% conversion Long form had 48% conversion Netline - an interactive services provider Prospecting email offered free white paper Tested short and longer landing page. Source: ClickZ, 7-25-02
Use a preference center Change contact frequency, interests, format
Use a preference center
Use a preference center Linkable from emails Unsubscribe saves
Ongoing profile capture
Ongoing profile capture I liked having my information displayed directly in the email
Ongoing profile capture
Segmentation a 4-step plan
Segmentation works! Report on offer segmentation Topica 10-05 reported to MarketingSherpa
Segmentation works! Report on offer segmentation Topica 10-05 reported to MarketingSherpa
1. Initial List Analysis Organize your email list into segments Type - repeat customers, offline customers, leads Source - site sign-ups, contest registrants, co-registration programs, appended names, etc. This takes time to set up, but should pay big benefits. You ll identify most productive groups.
2. List analysis by start date New subscribers more likely to interact within first 30 days; another drop-off at 60 days and then levels out Should you have a welcome series? Informz, 10-05 as reported by MarketingSherpa
Example of recency analysis RedHat (provider of Linux & open-source technology) has monthly Customer Advisor newsletter for purchasers of their services. Saw fatigue in results Changed to a life-cycle content approach based on recency of purchase. Open rates soared to 60% BtoB Email Marketer Insight 12/1/05
3. List analysis Profile Data Provided by subscriber during registration Provided as result of surveys Offline data you maintain or overlay Response Data Email click-throughs Post-click info collected on site Abandoned purchases Amount spent
What to use Email segmentation attributes JupierResearch Executive Survey
Profile segmentation Content based on type of pet owned
Profile segmentation Women s accessories to females generated 30% higher sales MarketingSherpa 11/21/05
Profile segmentation Best customers
Profile segmentation Identified 3 segments: 1. Browsed site 2. Added an item to the shopping cart 3. Did nothing Sent follow up email Jupiter webcast 19x lift in revenue per email for those who put item in shopping cart Browsers had a 10x lift
Effective Segmentation Quill Segment by 3 business sectors (content) Government, education, business Segment by customer activity (offers & strategy) Web-reactivation, Quill reactivation, channel migration, retention 25 40 versions each week If in retention group, strategy is to increase average order size Results: Clickthroughs: 2% - 10% Conversions: over 30%!!! Cross-channel customers spend 7x more than single channel customers!
4. Inactive Analysis By activity or inactivity Look at a 4 to 6 month timeframe for non-clickers Average inactive rates are in the 30% to 50% range Some may not see your emails because they are being blocked or filtered Some may not see your emails because they are in a bulk folder Others are just inactive Set a strategy in place to reactivate them For bounces and other undeliverables consider email append or email change of address
Reactivation email inactive buyer
Reactivation email inactive buyer
Reactivation email BMW
Reactivation email Dell
Confirm Subscription About 30% of subscribers were not getting their newsletters Spam complaints had resulted in blocks Re-confirmed permission for entire list Results: List went from 33,636 to 4,510 Spam complaints went from.51% to zero Opens went from 25.2% to 53.1% Clicks did NOT change! Direct 7/5/06
Re-mail previous respondents Greenbriar hotel decided to offer a $100 room discount Average results (CTR 14.6%) 3 weeks later decided to re-mail those who clicked but did not book Less than 1,000 emails sent Got bookings for 125 room nights ($75,000) within 48 hours Marketing Sherpa 1/12/06
Clicked but didn t purchase Segments don t have to be large #1 #2 Marketing Sherpa 1/12/06
Re-mail Email #1 sent 53,400 23.5% opens Email #2a sent to opens (12,500) 46.7% open rate & 12.8% CTR Email #2b sent to non-opens. 11% opens & 6.3% CTR Source: WOMMA Summit 5-06
Use Case: West49 About West 49 Inc Email 1.0 2.0 West 49 s Segmentation Strategy
West 49 Inc. West49 Inc. is a multi-banner specialty retailer West 49 offers apparel, footwear and accessories related to skateboarding, snowboarding, and surfing, as well as the music industry The Company primarily targets "Generation Y" customers (ages 10 through 18)
West 49 Inc. West49 Inc. operates over 115 stores in nine provinces, under the banners West 49, Billabong, Off The Wall, Amnesia/Arsenic, D-Tox, and Duke's Northshore Ecommerce site www.boardzone.com
West49 Email Marketing Email 1.0 Challenges: Previously using In-house system Segmentation limited to geo-targeting by province Limited features Young, web-savvy demographic
West49 Knowledge is power Solution: Utilize advanced Email Marketing tool Segmentation painlessly implemented Powerful analysis tools Seamless integration other marketing systems
West49 Email Marketing objectives Increase traffic to retail locations Integrate with other Marketing programs Build online community Bridge to e-commerce (boardzone.com)
West49 The ROI of relevance Results : Steady increase in open rates, 20-90% across segments CTR increased over 100% in specific segments Greatest impact in loyalty member segments
Making a difference Metrics that matter to e-marketers vs. executives What is the ROMI? Can email marketing drive retail sales?
West 49 - Holiday 06 Targeted to Loyalty Members segment Compared to control group UPT (Units Per Transaction) increase of 9.9% 10% increase in store visits Vs. Control group
Gather and groom Registration Collect basic Demographics info: Gender, Age Geographic info important How much is too much? Tell them why you want to know (new to West49 form, mid-march)
Segmentation Make it personal Combining Personalization and segmentation, powerful combo Geo-target to province/state or city Sorry guys! I can t make it this weekend Paul, Male, 17 years old Skater, Hamilton, CA
Segmenting Brief the team Best Practice, define your specific audience(s) segment Create an email calendar, don t over or under email Use Dynamic segments when possible Utilize Dynamic Design
Dynamic design Helpful to maximize resources for messages with minor differences Create a single email template Customize content based on dynamic segments Integrate multiple sources of content
Split Test The phrase that pays Use random sample from list Create static segments to test Dramatically increases Open Rates and CTR
Split Test The phrase that pays GROUP A: GROUP B: West49 News: Hey [Contact.First Name], Gr8 Gifts, 3 Contests,Online Flyer Hey [Contact.First Name], 1 week left to Enter to Win you Wishlist After 24 hours: Test Group A: After 24 hours: Test Group B: Open Rate - 8.15% Open Rate - 26.98% CTR - 2.26% CTR - 11.86%
Activity based segmentation Utilize results from previous messages second-chance to get important messages out Follow-up emails based on click-throughs
Survey says Use surveys to define new attributes Get info that you didn t at registration New products, services, etc.
Self-managed mailing Put the customer in the drivers seat Describe the type of info they can expect Estimate the frequency of each mailing type Don t give them too many options
Integrate with CRM data Import info from CRM systems, Website Registration Analyze, find similarities in contacts Divide into new groups (segments)
Summary Start with the basics Keep segmentation in mind at each step Different segments require different strategies Utilize dynamic design Allow the user the opportunity to define their own segment Look for unique attributes in your data sources
Question and answer
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