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8/12/2019 Email Marketing 7 Steps
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Email Marketing
Seven Steps to Success Guide
Dr Dave Chaffey
Published: November 2011
Plan > Reach > Act > Convert > Engage
8/12/2019 Email Marketing 7 Steps
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The
CRITICAL
factors
Creategreat
cre
ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
Email marketing
Seven Steps to Success Guide
Contents
03Introduction
12Step 1 Prioritise with the CRITICAL factors
18Step 2 Set your goals and build a quality list
25Step 3 Dening your email marketing proposition
30Step 4 Segmentation and targeting techniques
45Step 5 Dening your integrated email communications strategy
48Step 6 Creating effective email templates and creative
57Step 7 Test, learn and rene
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The
CRITICAL
factors
Creategreat
cre
ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
3
IntroductionYour options for using email marketing to
grow your business
Email marketing is far from dead as some have suggested in this age of social networking!1
As well see in this section, you can use email marketing both for gaining new customers and
selling more to existing customers. In this guide well look at the options for each, but well
focus on using email as a customer communication tool, which is where it works best and
can integrate well with your social media marketing efforts.
Strategy Recommendation 1 Focus your email marketing efforts on customer retention
Email marketing tends to work best as a tool to improve customer retention and growth.
This is because your emails are received by a warm contact that is already aware of you.
Email doesnt work so well when its with a cold contact.
That said, there are a range of options to use email for customer acquisition and its worth
considering them. Lets start here.
Using email for customer acquisition
rQ. Have we reviewed our options for customer acquisition through email?
Although many just think of email as a customer acquisition tool there are still some great
options to use email marketing for acquiring new customers through reaching new prospects.
Checklist email acquisition options
These are the main options to review:
r 1. Rented list email
r 2. Co-branded email (and/or co-registration)
r 3. 3rdparty email newsletter
r 4. Viral email
r 5. Event-triggered email
r 6. House e-newsletter
Best Practice Tip 1 Dont miss the opportunities of advertising in others enewsletters
We highlight the 3rdoption as particularly worth considering, especially for business-to-
business marketing since the banner blindness that we see with display ads doesnt
occur to the same degree with enewsletters since visitors scan them.
To help you quickly review the options for acquisition using email marketing, this table shows
their benets, disadvantages and issues to consider to help manage.
1 Facebooks view on Email marketing
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The
CRITICAL
factors
Creategreat
cre
ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
5
Using email for customer retention and growth
rQ. Have we reviewed our options for customer retention and growth through email?
Most marketers agree that email marketing works best as a relationship-building tool. Check
out the options in the table.
Checklist email retention options
These are the main options email acquisition options to review:
r1. House e-newsletter
r2. House campaign
r3. Triggered email
r4. Research email
r5. Service email
r6. Sales force email
r7. Integration with blogs, mobile and social media messaging
The table below summarises your options for communicating with existing customers via
email. You will see that some of these options such as event-triggered email and social
messaging are in common with acquisition.
Retention option What is it? Benets Issues
1. House
enewsletter
Still one of the best
digital marketing tools
to build a brand anddevelop relationships.
Add value, gain
response
Dening the best sell/
inform/entertain balance.
Integration with socialmedia. Resourcing.
2. House
campaign
A focused e-blast or
e-postcard on a single
offer often has better
response than an
enewsletter because of
its clarity
Permission-
based:
Responsive
Managing contact
strategies of frequency
so that the impact is not
reduced.
Targeting. Testing the
best template layouts and
offers.
3. Triggered emails Behavioural emailsfollowing up on
abandoned shopping
basket, search or
category browses
on site or interest
expressed through a
click on an email can be
a cost-effective way to
increase conversion to
sale
Low cost. There is growingcustomer distrust of
tracking so transparency
on this is required and
opt-in is essential.
4. Research email Research + Responsiveness Selection of sample.
Managing frequency
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The
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Creategreat
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ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
6
Retention option What is it? Benets Issues
5. Service email Service + Responsiveness Cross-selling
6. Sales force
Relationship build.
Sell.
Relationship Control
Integration
7. Blogs/RSS/
Social and mobilemessaging
Other alerting and
messaging toolsshould be made to
integrate with your email
marketing for efciency.
Brand and
relationshipbuilding
Adoption of different
networks by differentcustomers.
Permission-based email marketing
rQ. Is our email marketing permission-based?
Permission marketing, or gaining consent for marketing communications to be received,
is fundamental to successful email marketing. If you dont practice permission marketing,
customers will see you as a spammer and you may lose them forever. Then there are the
legal requirements in many countries which make permission marketing a must.
Strategy Recommendation 2 Ensure your email marketing is permission-based
Audit your email marketing to ensure that your email marketing is permission-based.
Since Email marketing underpins much of digital marketing, but especially email marketing,
lets take a look at whats involved. You will know most of this, but its worth checking.
Permission marketing
Permission marketing is an established approach that still gives a practical foundation for
CRM and online customer engagement. Permission marketing is a term coined by SethGodin way back in 1999, but its still valid and we think that many still dont work hard enough
to get permission.
What is it? Permission marketing
Customers agree (opt in) to be involved in an organizations marketing activities by email,
social networks or traditional channels in return for the value offered.
The classic exchange is based on information or entertainment a B2B site can offer a free
report in exchange for a customer sharing their e-mail address and details, while a B2C site
can offer a newsletter or company Facebook page with valuable content and offers. This is
stage 2 in the classic permission marketing process shown in the next diagram.
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The
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factors
Creategreat
cre
ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
7
Its worthwhile optimising this process to ensure youre using the best engagement devices,
messaging and placement to maximise lead generation.
What is it? Engagement devices
A call-to-action that encourages visitors to the site to interact. If these also enable capture
of leads, these are lead-generation devices.
To improve the effectiveness of your permission marketing, ask these questions:
E-permission marketing checklist - how effective are our engagement devices?
r Appeal and range of devices? How effective compared to competitors?
r Balance of lead-generation and non-lead generation devices
r Placement and call-to-action?
r Ability to track (see our article on campaign tracking2, the section Assess engagement
beyond the click through web analytics on page 59 or the guidance on event tracking
in our Google Analytics guide)
r Type of engagement device
r Videos
r Content download
r Poll, survey or interactive quiz
r Social recommendation (share through social networks or email)
Strategy Recommendation 3 Review engagement and lead-generation devices
Check that you have the best methods of generating leads within your budget. Review
the range of engagement devices you have against competitors. Use testing to review
the messaging and placement of offers to maximise conversion. Its best to use a mix
of engagement devices that include both those that include lead generation and do notrequire registration to maximise reach.
2 Campaign tracking for email guide
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The
CRITICAL
factors
Creategreat
cre
ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
8
Common customer prole
Your options to target your email list will be based on your customer knowledge. Since we
are looking to learn more through time, we need a structured approach to customer data
capture. This can be achieved through a common customer prole.
What is it? Common customer prole
A denition of all the database elds that are relevant to the marketer in order tounderstand and target the customer with a relevant offering. It is best if different levels,1-3
of prole can be dened to encourage more customers to sign-up.
Once dened, the common customer prole can then be used as a means of
structuring e-permission marketing and rening understanding about the customer. A plan
with targets for each level can be created about how to learn more about the customer.
Best Practice Tip 2 Identify key prole elds
Identify the prole elds you really need to be able to understand your audience and target
them with future messages. These are level 1 or 2 of the common customer prole.
A structured approach to customer data capture is needed otherwise some data will be
missed, as is the case with the utility company that collected 80,000 e-mail addresses, but
forgot to ask for the postcode for geo-targeting!
The customer prole can have different levels to set targets for data quality:
Level 1 is contact details and key prole elds only
Level 2 includes preferences
Level 3 includes full purchase and response behaviour
E-CRM and data proling approach reviewed?
rQ. E-CRM and data proling approach reviewed?
We can rene Seth Godins permission marketing ideas, which have been described in the
previous steps, to make them more practical to apply to retention marketing.
Permission marketing E-permission marketing
Opt-in Selective opt-in
Opt-out Selective opt-out
Initial proling Communications preferences
Continued proling Sense
Targeted communications & Respond
These are some of the key features of E-CRM implementation we suggest you work through
for your organisation.
r 1. Offer selective opt-in to communications. Offer choice in communications
preferences to the customer to ensure more relevant communications. Some customers
may not want a weekly e-newsletter, rather they may only want to hear about new
product releases. Remember opt-in and providing opt-out is a legal requirement in mostcountries.
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The
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Creategreat
cre
ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
9
Four key opt-in options, selected by tick-box are:
r Content News, products, offers, events
r Frequency weekly, monthly, quarterly, or alerts
r Channel Email, direct mail, phone or SMS
r Format Text vs HTML vs Mobile and now a choice of mobile as Amazon have in
their preference centre
This is an example of a preference centre or customer prole. Although many mega-brands
use these, they are now within the reach of smaller companies through low-cost E-CRM
tools, IF they have a strategy that acknowledges their importance.
Best Practice Tip 3 Create a customer communications preferences centre
A preference centre enables customers to adjust the frequency and type of
communications so increasing the likelihood of engagement.
r 2. Create a common customer prole. Following on from the idea of a preferences
centre. A structured approach to customer data capture is needed otherwise key data is
needed for delivering targeted e-mails will be missed. You dont want to ask for lots of
details straightaway, so a preference centre enables you to gradually add data. Today, big
brands such as Sears3are using social sign to integrate customer prole information with
email and CRM database information.
What is it? Social sign-on
Site visitors log-in to site services through their preferred social network account such as
Facebook or Twitter. Optionally this process can be integrated with additional prole elds
which are stored in a customer database.
3 An example of how Sears use Social signon
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The
CRITICAL
factors
Creategreat
cre
ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
0
r 3. Dont make opt-out too easy (selective opt-out). A bit radical, but my view is that
we often make it too easy to unsubscribe. Yes, providing a straightforward opt-out is part
of permission marketing and in many countries, a legal requirement. Although offering
some form of opt-out is now a legal requirement in many countries due to privacy laws,
a single click to unsubscribe is arguably making it too easy. Instead, wise e-permission
marketers use the concept of My Prole. Instead of unsubscribe, they offer a link to
a web form to update a prole, which includes the option to unsubscribe to some orpotentially all communications. Amazons communications preferences page is a good
example of this approach.
Remember though, that offering opt-out that works is a legal requirement. Many opt-out
processes still dont work so instead subscribers may report as spam which can hit your
overall deliverability. Still, we still think theres some merit in what we said way back:
The use of My Prole can be tied to the principle of selective opt-in you could call it
selective opt-out. Put the My prole option in the e-mail prompt the user to keep their
contact details up-to-date.
r 4. Watch dont ask use Sense and Respond. The need to ask interruptive
questions to better prole customers can be reduced through the use of monitoring of
clicks to better understand customer needs and to trigger follow-up communications or
Sense and Respond. Some examples of personalisation through this technique include:
Monitoring click-through to different types of content or offer. The interests of individual
list members can be assessed through monitoring what they click through to. Lastminute.
com reputedly tailor their newsletters to many different template types according to
content clickthrough. For example, if you click through to theatres or city-breaks, then you
will receive more of this type of content in future.
Monitoring the engagement of individual customers with e-mail communications. This
is achieved by monitoring trends of opening and click-through by individual customer.
These metrics indicate the level of interest of individual customers and we can monitorhow these vary through time and use follow-up communications. For example, perhaps
a buying signal is suggested by a customer who has not previously responded to e-mails
who starts clicking through to the web site more frequently. This could be followed up by a
tailored e-mail communication or a phone call.
Follow-up of response to a specic e-mail. If a B2B vendor offers information about a
new product launch which encourages click through to a landing page then they have two
main choices of follow-up. First, the form could contain a question asking about the future
buying intentions or whether contact from a sales rep is required. Alternatively, if there
is a capability to monitor an individual who has clicked through to a page, then it may be
best to use this to prompt a call from an account manager or sales person. The secondapproach may result in more sales, but of course there is a danger that the customer may
react negatively to monitoring or stalking of this type and it is arguably not permission
marketing.
How is this guide structured?
In this section we have introduced the concept of permission marketing and showed how it
can be applied to using email for gaining new customers and communicating with existing
customers. In Step 1 we will show how to prioritise your email activities using the CRITICAL
factors. We then cover each of these in more detail in the next steps of the guide.
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The
CRITICAL
factors
Creategreat
cre
ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
1
What makes our guides different?
Weve created our guides to be your constant companion as you learn, review and improve your
approach to digital marketing. We know youre busy and under-pressure to get results so theyre
written to help you do just that by taking you through the questions you should be asking to im-
prove performance and suggesting the right approaches for you. Our Ebooks are all created to
help you:
Improve results. A focus on getting the best results from your digital marketing.
Review your current approach. A unique workbook format helps identify priorities.
Apply analytics. Inegrated advice on using Google Analytics to improve performance.
Learn best practice. Strategy recommendations and practical tips highlighted throughout.
How will the guides help you?
Our Ebooks are designed to help you and your team if you are actively managing digital market-
ing. They are also packed full of practical advice if youre working hands-on on a company website
or campaigns like search, email or social media marketing. This is how our guides are designed tohelp create different types of people:
Company owners and marketing managers. We help you create a plan so you can invest in
the approaches that matter. We help you set goals and put in place a system to measure and
improve since all our guides cover how to get more from Google Analytics.
Digital marketing and Ecommerce managers. We help you get more from each of the key
digital marketing channels plus your web and social presences through reviewing your ap-
proach using using our comprehensive workbook templates.
Digital marketing specialists. Whether you work on social media marketing, SEO, PPC,
email marketing or conversion rate optimisation for the website we have a guide to help you
boost your approach. Consultants and agencies. Many consultants and agencies use our guides to check and
rene their approach and recommendations to clients on digital marketing. Theyre also used
to help educate team members on the latest digital marketing best practice and techniques.
Guide features
All our guides include these features to help you improve:
Checklists of questions to ask to review your marketing approach
Guidance on using Google Analytics to improve performance
Colour-coded denitions, key strategy recommendationsand best practice tips
Diagrams giving frameworks to develop your strategy
Lots of examples of best practice through mini case studies and screen captures
Tell us what you think
Dave Chaffey and team have developed these guides based on working with many types of
companies and in training. But improvements are always possible, so wed be grateful if you could
email: [email protected] with your comments, good or bad. In particular, were interest-
ed in ideas on improving these guides or for other guides you would nd useful. Thanks!
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The
CRITICAL
factors
Creategreat
cre
ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
2
1
Step 1Prioritise your email marketing efforts
with the CRITICAL factors
A review of the CRITICAL success factors for email marketing is a useful place to start yourjourney to improved email marketing. CRITICAL summarises the main factors which will
determine whether youre successful with your email marketing.
Lets now briey review each of the eight CRITICAL success factors. Well look at some
examples of good practice to learn from along the way and cover them in more detail later in
this guide.
Conversation
rQ. Is our email marketing two-way are we engaging visitors in a dialogue or just pushing
content?
Email works best when its part of a wider dialogue encouraging user participation and
interaction with a brand. Its easy to just treat email marketing as a substitute for direct
marketing. But it works best when it encourages interactions, for example through:
Polls or surveys (for an e-newsletter)
Reviews and ratings on products (for an e-retailer)
Competitions which are announced in several emails
Sharing of whats hot in the social channels like Facebook and Twitter
Heres an example from the CIPD B2B Enewsletter showing how a poll is integrated:
Relevance
rQ. Is our email marketing targeted? Are we segmenting sufciently?
It will be no surprise to direct marketers that response rates for emails will be higher if they
are targeted to the interests of individual recipients.
In the section on targeting well review 6 options to targeting which cover both traditional
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The
CRITICAL
factors
Creategreat
cre
ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
4
1
Best Practice Tip 2 Highlight your incentives through formatting
Highlight your incentives in headlines, image text and call-to-action.
This example shows how the WIIFM is included within the call-to-action buttons.
Timing
rQ.Are we sending our emails at the right time?
Timing refers to when the email is sent or received; the time of day, day of the week, point inthe month and even time of year. It is usually thought that B2B emails are best sent so that
the recipient receives them during the working day or midweek. All of us have a full in-box to
work through rst thing in the morning, often containing SPAM and newsletters. It can help
your email stand out if it arrives during the day.
However, only testing can show this for sure some email marketers get good results on
Friday, when ofce workers are winding down for the weekend.
Test the timing that works best for your audience by assessing the open rates for HTML
emails at different times of the day and week. Read our posts on timing for more ideas.4
Timing also means the context of when the email is received relative to user interactions the sense and response approach we mentioned above.
4 Best time of week to send an email. Best time of day to send an email.
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Creategreat
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ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
5
1
Integration
rQ.Are our emails integrated with other channels?
This is looking at email as part of your integrated marketing communications. How it
integrates with social media, websites and if you still use it, direct mail, are all important to
getting your message across.
Questions to ask include: Are the creative and copy consistent with my brand?
Does the message reinforce other communications?
Does the timing of the email campaign t with ofine communications?
Do we encourage social interactions?
Creative and copy
rQ.Are our creative and copy engaging enough?
Creative refers to the overall design of the email including layout, use of colour, images and
copy.
Best Practice Tip 3 Make your offer clear up-front
Avoid the direct mail approach of saving the best to last. Email is an impulsive medium
where visitors will scan it quickly, so if the recipient likes your offer from the subject line
and the opening paragraph, then they should be able to click through straightaway. So
in general, emails should always have a link in the rst three or four lines and then this
call-to-action should be repeated in the close.
Heres an example of an up-front offer repeated in the subject line, images and editorial text -
which almost always receives a good clickthrough rate:
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Creategreat
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ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
6
1
Key issues to consider are:
How is the email structured? Are layouts commonly used in direct mail appropriate for
email?
Where are the calls-to-action? What are the best positions for calls-to-action and how can
clickthroughs be encouraged? Up-front is best.
How is the email branded? How should email campaigns and newsletters support theestablished brand and when should brand variants be used.
Is the tone of voice right for the email?
Attributes (of the email)
rQ.Are our creative and copy engaging enough?
The attributes of the email header which can all determine campaign success include the
subject line, from address, to address, date/time of receipt and format (HTML or text). Of
these, subject line, from address and format are most important in inuencing response.
The attributes also include:
Deliverability Delivery will fail if your email is assessed as a spam email
Renderability Your creative and email wont be effective if it isnt easy to read in the
inbox
Well look at more tips on subject lines later, but for now, heres one - shorter can often work
best. The lesson from this reseach from Mailer-Mailer5is clear.
Landing page (or microsite)
rQ. Do we send readers to the right pages to engage them?
There may be a temptation when experimenting with email to encourage click through to a
web page that is already part of the site, such as the home page or a product page.
However you will get a much better result from a landing page focused on achieving action.
Landing page is the term given for the page(s) reached after the recipient clicks on a link in
the email.
5 http://www.mailermailer.com/resources/metrics/index.rwp
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Creategreat
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ative
Test,learf,
refne!
Integrateyour
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Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
7
1
Typically, with a B2B email, on clickthrough, the recipient will be presented with an online
form to prole or learn more about them. Designing the page so that the form is easy to
complete and reassuring about how their personal data will be used can affect the overall
success of the campaign.
The conversion rate on the landing page can make a dramatic difference to the success of
an email campaign, yet this is often overlooked in favour of the email creative. Testing and
improving landing pages can pay dividends.
This is the landing page for the Eurofce email earlier in this section. You can see the
customer journey is nicely integrated, encouraging fullment of the offer.
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Creategreat
cre
ative
Test,learf,
refne!
Integrateyour
emailmarketing
Segmentation
andtargeting
Youremail
proposition
Setobjectives
Smart Insights (Marketing Intelligence) Limited. Please go to www.smartinsights.com to feedback or access our other guides.
7 Steps Guide to Successful Email Marketing
8
3
Step 2Set your goals and build a quality
list for email marketing
You probably know that interaction with email campaigns is measured through open andclickthrough rates. While its great to review email response in this way, if this is all you
measure, youre missing the bigger picture of how valuable email is to your company and its
customers.
Dene current value of your email marketing to customers
To assess how valuable email is to customers its best to measure the quality of their
engagement how engaged are they?
rQ. How well do we measure engagement of our subscribers?
A review of campaign open, clickthrough and conversion rates is a natural place to startto improve engagement. Trends in overall response rates are a good starting point, but a
capable email marketing system will give you more insight. For a more detailed analysis, you
should review:
Checklist measuring engagement with email marketing
r Click to open rates (CTOR) these will enable you to see how engaging your creative
and offer is
r Open and clickthrough rates by segment engagement will vary by segment depending
upon the targeting and relevance of your content or offers, so be sure to assess this.
r Open and clickthrough rates based on delivery time time of day and day of the week ortime in month still make a signicant difference so advanced email marketers are moving
to target according to time when individual subscribers are most engaged.
r Engagement at different points in the customer lifecycle it is natural that engagement
will decline through time and some subscribers will become inactive. So you need to work
to engage visitors through time, for example through a welcome strategy, or if necessary
reactivate them. Reviewing hurdle rates at different lengths of time from original subscrip-
tion can help assess the success of these strategies.
r Engagement with different types of offer and message different types of promotion or
message will also vary in popularity, so you need a way of tagging offer-type to analyse
what is effective. Some email marketers tag specic types of links in different positionsin the template to know which part of their template is most effective, for example, there
could be a standard link for hero product or featured category in an email.
r Hurdle rates of engagement over a longer period this assesses engagement over a six
or nine month period to set goals to review how active your subscribers are measured
through open, click or purchase rates.
This is the big one! If you have to choose just one measure to assess customer
engagement, let this be it!
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Strategy Recommendation 4 Measure longer-term engagement through hurdle rates
To analyse longer-term engagement, you can use the type of analysis shown in the table
below, which shows a diagnostic for longer-term engagement with email marketing.
This analysis can often shows that over half of your audience is not engaged, so this gives
you a hurdle rate to benchmark your engagement efforts against.
These types of hurdle rates should be used to set goals for list quality and engagement and
can also be broken down by subscriber segment or offer type.
Dene value of email marketing activity to your company
rQ. How well do we measure value generated from our email marketing?
In the previous section on customer value we looked at value to the customer. But what
about company value? To assess this we need to know about the marketing outcomes
generated that lead to sales.
So we suggest you set these as primary goals for your email marketing and how to trackthem. You can look at the efciency from the point of view of emails sent which shows you
overall campaign effectiveness or visits to the site from email that helps you assess the
efciency of your web conversion.
Checklist measuring value generated from email marketing
r Outcomes (goals) per 1000 (or per 100) emails sent
r Revenue (prot) per 1000 (or per 100) emails sent
r You divide by 1000 to normalise value to make it easier to interpret, but its not essential
r
Outcomes (goals) from email marketing per website visit from emailr Revenue (prot) from email marketing per website visit from email
This will be tracked through your analytics package. To implement your tracking to check
whether you have achieved these goals you will need to tag your emails as described in Step
7.
Best Practice Tip 4 Use a conversion funnel model to set goals for your email marketing
Through creating a simple conversion model for your email campaign you can set realistic
goals for your email marketing with an agency. You can also set expectations amongst
colleagues since the multi-step response means that response may not be as much as
they expect.
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A conversion model to edit is available for members6.
Success refers to achieving the objectives set for the campaign does the campaign deliver
the required outcomes? The success of direct response campaigns is often talked about in
terms of clickthroughs the number of recipients who follow a link from the email through to
the organisations
website. But what really matters are results in terms of your original objectives how many
recipients click through and then take the follow-up action on the site such as purchasing
a product, agreeing to attend an event, receiving a visit from a sales rep or entering a
competition.
Growing our list
rQ. Do we have a structured process for growing our email list?
If you dont have a plan to grow your email list then it will still grow, but not as fast as you
would like since you will be missing opportunities from different touchpoints.
A simple starting point to establish how well this is working is to assess is your current gure
for the proportion of current customers for which you have email addresses. You can then
set targets for this metric and devise techniques to increase this gure. When devising these
techniques dont only think quantity, but also think quality. What procedures can you use
to maximise the number of valid email addresses? Email addresses which have just onecharacter wrong are no good to anyone since you wont usually know which is the miscreant
character. A further aspect of quality is opt-in. Just because you have obtained an email
address from the customer doesnt necessarily mean it is opt-in and you have permission to
use it.
It is only opt-in if the customer has proactively agreed, and expects to receive email
communications. Perhaps there are a range of email communications available to the
customer such as different e-newsletters or email alerts. Which have they agreed to receive
or is there the expectation that they will receive all of them?
6 Download Email campaign calculator.
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Strategy Recommendation 5 Set an allowable cost of email acquisition
It is useful to have an allowable cost of email address acquisition which is a target gure
for addresses from new prospects since it can help control spend on media such as paid
search. Examples include a B2B software company who places an allowable cost of email
acquisition of 0.40 per email and a recruitment company who placed an allowable cost of
email address (as part of a job application) at 0.70.
rQ. Do we have an allowable cost of e-mail address acquisition (for non-customers) to help
control the costs of list-building?
Dene objectives for email list building and list quality?
Setting specic SMART objectives for your list can help grow the list faster, giving more
opportunities to generate sales.
rQ. SMART objectives for email list set?
Checklist email list size and quality
Here are some examples of objectives for list-building for you to review including:
r List size. Aim to increase the size of list over a particular time period, e.g. add 5,000 sub-
scribers to an e-newsletter in a year
r Email address coverage. Aim to increase coverage of email addresses in customer base
you may have 15% of customers opted into an e-newsletter, but you want to increase
this to 35% over the next year
r Email address quality proportion of valid or active email addresses on your list (i.e.
those that dont bounce back or the percentage of customers who are email active i.e.
they open or clickthrough on emails within a dened period)
r Email permission quality. Although you may have collected email addresses, you may not
have explicit permission to use them, which is required by laws in many countries. Also
have you got permission to send the full-range of e-communications, or just some, e.g.
alerts and e-newsletter?
r List value value generated per 1000 or list members in terms of sales/leads in a time
period.
r Targeting quality increase proportion of subscribers qualied for your products who you
have collected proling information about.
r Data quality proportion of specic prole elds held about individuals (see 2 below)
This section describes a range of ofine and online techniques to increase e-mail address
capture and make sure that the accuracy is a high as possible.
Review touchpoints to improve email marketing
rQ.All touchpoints for collecting and updating email addresses reviewed?
It is important to have a structured approach to collecting and maintaining customer data. A
good way to review all the possible methods of capturing email addresses is for marketers to
brainstorm alternative methods for capturing email addresses by thinking about opportunities
for capture which are:
Online Ofine
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protection law require you to send an email offering the referred person the option to opt-
in before further communications are sent.
r 7. Any other forms of online trafc-building not mentioned above. Examples include
graphical online ads or Pay Per Click text search engine ads.
r 8. E-mail appending services. US companies such as Freshaddress (www.freshaddess.
com) or Email Movers (www.emailmovers.com) in the UK can be used to identify likely
email addresses from existing customers who have not yet supplied their address, e.g.
John Smith at IBM is [email protected] (perhaps not the best example). Similar ser-
vices can also attempt to correct email addresses with typos.
Checklist ofine methods to build your house list
Ofine opportunities are the full-range of customer touch-points. Here are eight more:
r 1. Any form of paper registration or order form. But be sure to check the form of word-
ing such that an opt-in to all forms of future communications is achieved.
r 2. Visit from sales representatives. Can be used for opt-in either on paper, or through
subscribing online.r 3. A phone contact at a call centre. For example a bank could ask customers whether
they have an e-mail address during a routine phone enquiry.
r 4. Telemarketing. This can be specically to capture email addresses, but is more cost-
effective if it is part of a telemarketing campaign.
r 5. Point-of-sale. For a retail context.
r 6. Trade show or conference. For example from a prize draw collecting business cards
(but care with the opt-in).
r 7. Paper response to a direct mail offer. Traditional direct response.
r 8. Phone response to direct mail or ad. Again traditional direct response.
When email addresses are captured ofine, a common problem is the level of errors in the
address this can often reach a double gure percentage. So plan to control this also staff
should be trained in the importance of getting the email address correct and how to check
for an invalid address format. Some call centres have even incentivised staff according to
the number of valid email addresses they collect. When collecting addresses on paper, some
practical steps can help such as allowing sufcient space for the email address and asking
for it to be written in CAPS.
Techniques for list maintenanceAs with maintaining any customer database, maintaining a list can be a major headache. For
email or mobile-related lists the headache can be more intense since:
1. With permission-based email, the customer can opt-out or unsubscribe at any time
2. Email addresses tend to change more frequently than postal addresses
3. Multiple email addresses are held, often to counter spam.
If your e-newsletter or email campaigns are good quality, then the unsubscribe rate shouldnt
be too much of a problem. A typical rate for unsubscribes is 1% or below per broadcast for a
house list.
All the forms of collecting email addresses online and ofine that were mentioned in the
previous section can also be used to keep email addresses fresh since the most recent email
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address can be collected. This particularly applies to the ofine methods where employees
talk directly to customers and prospects. Since it is annoying to be constantly asked is your
email contact address still correct? it is best if this is only asked when an address becomes
inactive as described in the section below.
Encouraging self-service through an online prole or permission centre should also be used.
Direct mail promotions also give opportunities for gaining email addresses. In fact, whenever
a prospect or customer has to ll in a form this is an opportunity. Collecting the email address
should be an inbuilt part of the sales process.
Another approach to nd out more about customers where you havent collected their data
directly is to use information available from registration on other sites like social networks.
This approach is a service available from Rapleaf.com.
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Step 3Dening your email marketing proposition
rQ. We have dened how our email communications offer differential value?
Discussions of how to engage email audiences often start with reviewing creative or theoffers presented to subscribers, but in our view, a better starting point is the customers
needs. Email is like any other digital channel, whether its a social media presence like
Twitter or Facebook, Adwords in Google or mobile marketing
To be successful in comparison with the other channels each channel like email marketing
must offer its own unique form of value that is distinct from other channels. Every channel
needs a distinctive online value proposition (OVP) to succeed. This denes how the digital
channel supports the core brand values but addsits own unique value. Within email
marketing, this is particularly important for an e-newsletter.
Review these examples of the types of value that will engage subscribers and improve
perception about a brand and see which is most relevant for you:
r Engaging text content that makes the subscriber feel happy, angry or as if they
are learning
r Engaging non-text or rich media content such as videos, podcasts, presentations, blog
posts, photos, etc
r More in-depth content or alternately a summary of content
r Sharing of other subscriber views and opinions through votes, product ratings and polls
r Exclusive discounts or coupons only available through the channel.
What is the focus of what this campaign is looking to achieve, i.e. focus on acquisition /
retention/awareness/brand building/ROI?
Write down different types of value that you do offer or could offer:
Do offer? Competitors offer? Should offer?
1.
2
3.
4.
5.
6.
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Dene the value offered through our email marketing communications
rQ. Do we get the sell-inform-entertain-share balance right?
Achieving the correct balance between using your newsletters or other email communications
as a sales tool and adding other types of value is key to their success.
You will denitely have seen examples of overselling, but maybe also underselling where thecall-to-action or connections to products is too limited.
Remember that this relates through to the structure also the most enticing content needs
to be above the fold when the email is opened. Start with what you feel are the strongest
articles for your audience. Have regular features plus new, topical, articles separate in each
issue.
As well as different types of feature, think about how you can use your e-newsletter to give a
sense of community and engage the audience.
Write down your assessment of the types of value you offer through your e-communications:
Sell (___/10)
__________________________________________________________________________
Inform (___/10)
__________________________________________________________________________
Entertain (___/10)
__________________________________________________________________________
Share (___/10)
__________________________________________________________________________
Dene email value proposition
rQ. We communicate our email value proposition effectively?
Having clear goals around the value you want to offer will help internal copywriters focus and
can also be dened on the website to encourage signup.
For business-to-business e-newsletters, think about how you can add value by acting as a
lter for information about your market sectors.
Your e-newsletters can potentially Alert, Aggregateand Distilinformation through market
alerts, industry trends and in-depth best practice case studies. But to deliver this information-
based value will not be cheap as the content will have to be up-to-date, relevant, accurate,
concise and clearly presented.
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Best Practice Tip 6 Dene and communicate value of your e-newsletter or email
programme
You should explain your newsletter proposition, i.e. how it will deliver value to subscribers,
for example, through:
Saving time. By providing a single, up-to-date source.
Learning. Increasing knowledge and solving day-to-day problems.
Saving money. For instance through exclusive offers or offering new ways of working
through a companys products.
Entertaining. All newsletters can and should be fun for their audiences this is not
only the preserve of consumer newsletters.
Sharing. Sharing information about your organisation or facilitating sharing of content
from customers.
To achieve engagement, you should review how the newsletter delivers value and try to
incorporate these into the e-newsletter. You should answer these questions and emphasise
them through the design of the e-newsletter.
B2B Proposition B2C Proposition
Make my work easier Make my life easier
Help me develop Help me learn/have fun
Make me look good Make me look good
Give me a great deal Give me a great deal
The example below gives a great business-to-business example of the value an email can
offer:
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And here is an example for an engaging newsletter for a consumer brand focus not around
product or offer but customer need and interest. Sales offers are below the fold:
Integrating value into social media marketing communications
rQ. Do we show the value we offer from our email marketing in our social media
communications ?
With the rise and rise in popularity of social media, email faces competitors for customer
attention, like Twitter and Facebook which are increasingly offering similar types of value. So
the email channel needs to compete with or complement with these to stay relevant. Think
how email marketing can be more valuable compared to these other media?
Alternatively, it can be argued that a company simply needs to offer choice and many
customers will prefer email for its lower frequency and richer media. Email can help thetime-poor audience by ltering or summarizing the high frequency messages from blogs and
social networks.
In the example below, the retailer is using email to promote an exclusive campaign offer
available through Twitter, but equally, the campaign could work in reverse.
Best Practice Tip 7 Enable share to social options
A Share-to-Social feature allows email marketers to include links from the email so
recipients can easily post emails to their social network prole page, where friends can see
the message, make comments and even post the email on their own prole pages.
Speaking about the Share-to-Social concept, Matt Lindenberg, assistant director of marketing
for Diapers.com, explained the benets thus:
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Social networks are all about communication. This feature empowers our customers to
communicate with each other, and therefore allows our messages to move beyond our email
list. One of our emails was posted on 50 different social network prole pages. That kind of
customer endorsement turns our email push marketing into a powerful pull campaign .
Finally, a simple, but effective approach is to include more reference to customer ratings
within email as this example campaign encouraging purchase based on customer-picks
shows:
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Step 4Segmentation and targeting techniques
rQ. Strategic approaches to segmentation and targeting reviewed and selected?
There are many different levels in sophistication of targeting, some of which may or may notbe worthwhile according to the size of your list. But its still useful to review the segmentation
and targeting approach used by the top e-retailers to deliver relevance. Typically, these are
based upon ve layered segmentation options used to develop a more effective targeting.
Best Practice Tip 8 Different targeting options can be combined through
layering the segmentation approaches
A layered segmentation approach summarising the segmentation approach used by eBay
UK is shown below.
Here, Ill outline the ve segmentation approaches that you could use.
Checklist 5 email targeting approaches
r 1. Customer prole characteristics (demographics).
r 2. Customer value (current and future).
r 3. Customer lifecycle groups.
r 4. Customer behaviour in response and purchase (observed and predicted).
r 5. Customer multi-channel behaviour (channel preference).
r 6. Customer personas including psychographics.
Best Practice Tip 9 Using event-triggered emails and dynamic content insertion to deliver
really relevant emails
To implement this level of email marketing needs a capable email marketing system that
supports event-triggered marketing and dynamic content insertion where rules are used to
drop different offers and email messages into a container as described in this post: http://
www.smartinsights.com/blog/digital-marketing-strategy/how-to-plan-event-triggered-email-
campaigns/.
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Targeting option 1. Customer prole characteristics(demographics).
This is where most will start; based on their traditional strategic customer segmentation
based on the type of customer recorded in the elds of their prole.
For B2C e-retailers this will include age, sex and geography. For B2B companies, this will
include size of company and the industry sector or application they operate in. This example
shows a girls and boys creative with the tone and style varying in line with their preferences.
Best Practice Tip 10 Test different targeting optionsUse the lower cost of e-mail creative and broadcast to test different targeting to create
more relevant emails for your audience.
Many B2B companies target according to industry sector, but do not also look at job role.
Different messages can be developed for people with more strategic interest (e.g. for a
senior manager the benets of a new printer may be reduced costs, while for an IT manager
it may be ease of administration or throughput). Similarly, many B2C companies may conduct
national campaigns, but with email can add a regional element perhaps using the postcode
to determine different parts of the country and then give different messages according to
region or airport they will y from (for a travel company).
Best Practice Tip 11 Consider tone and style preference
Some demographics will naturally respond differently to different types of message. Some
customers may like a more rational appeal in which case a detailed email explaining
the benets of the offer may work best. Others will prefer an emotional appeal based on
images and with warmer, less formal copy.
Sophisticated companies will test for this in customers or infer it using prole characteris-
tics and response behaviour and then develop different creative treatments accordingly.
Companies that use polls can potentially use this to infer style preferences.
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Targeting option 2. Current and predicted value
Retailers work hard to understand their most valuable customers so that they can develop
loyalty in this group. A useful way of thinking about customer value is these three groups,
originally identied by Peppers and Rogers:
1 Most-valuable customers (MVCs)
These are the customers who contribute the most prot and are typically a small proportionof the total customer base as suggested by their position in the pyramid. These customers
will likely have purchased more or higher-value products.
The strategy for these customers focuses on retention rather than extension. In the case of
a bank, personal relationship managers would be appointed for customers in this category to
provide them with guidance and advice and to make sure they remain loyal.
Often this strategy will work best using direct personal contact as the primary communication
channel, but using online marketing for support where the customer has a propensity to use
online channels.
2 Most-growable customers (MGCs)Customers who show potential to become more valuable customers. They are protable
when assessed in terms of lifetime value, but the number of product holdings or lifetime value
is relatively low compared with the MVCs.
Strategies for these customers centre on extension, through making recommendations about
relevant products based on previous purchases. Encouraging similar re-purchases could also
be part of this.
Online marketing offers great opportunities to make personalised recommendations through
the web site and email.
3 Below-zero customers (BZCs)BZCs are simply unprotable customers. The strategy for these customers may vary
they can be encouraged to develop towards MGCs, but more typically expenditure will be
minimised if it is felt that it will be difcult to change their loyalty behaviour or the source of
their being unprotable. Again, digital media can be used as a lower-cost form of marketing
expenditure to encourage these customers to make repeat purchases or to allow them to
self-serve online.
When considering loyalty-based segmentation, its useful to compare current against future
value, and its best to visualise this within a matrix. Heres an example presented by Chris
Poad of retail group Otto to an E-consultancy Masterclass.
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Heres a creative for a VIP mailing sent to highest value segment. ESP eCircle shared that
the average performance was 5 times higher than the regular newsletter:
Targeting option 3. Customer lifecycle groups.
As visitors use online services they can potentially pass through several stages, often known
as the online loyalty ladder.
Once you have dened these groups and setup the customer relationship management
infrastructure to categorise customers in this way, you can then deliver targeted messages,either by personalized on-site messaging or through emails that are triggered automatically
due to different rules. First time visitors can be identied by whether they have a cookie
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placed on their PC and their computer setup or user agent settings.
Once visitors are then registered, they can be tracked through the remaining stages. Two
particularly important groups are customers who have purchased one or more times.
For many e-retailers, encouraging customers to move from the rst purchase to the second
purchase and then onto the third purchase is a key challenge. Specic promotions can be
used to encourage further purchases. Similarly, once customers become inactive, i.e. they
have not purchased for a dened period such as 3 months, further follow-ups are required.
Heres an example of the lifecycle segmentation approach used by e-retailer Tesco.
com which they call a commitment-based segmentation based on recency of purchase,
frequency of purchase and value. Its used to identify 6 lifecycle categories which are then
further divided to target communications:
Logged-on
Cautionary
Developing
Established
Dedicated
Logged-off (the aim here is to win back)
This is an example of what we think is an excellent branded welcome email from Clinique:
Heres a nice low-tech, but often more effective email activation creative where the attempt is
to win-back a lapsed customer.
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Best Practice Tip 12 Use behavioural email marketing
Rather than manually planning email campaigns, use automated event-triggered
messaging to encourage continued purchase.
For example, Tesco.com have a touch strategy that includes a sequence of follow-up
communications triggered after different events in the customer lifecycle.
In the example given below, communications after event 1 are intended to achieve the
objective of converting a website visitor to action; communications after event 2 are intended
to move the customer from a rst time purchaser to a regular purchaser and for event 3 to
reactivate lapsed purchasers.
Trigger event 1: Customer rst registers on site (but does not buy).
Auto-response (AR) 1: 2 days after registration e-mail sent offering phone assistance and 5discount off rst purchase to encourage trial.
Trigger event 2: Customer rst purchases online.
AR1: Immediate order conrmation
AR2: 5 days after purchase e-mail sent with link to online customer satisfaction survey
asking about quality of service from driver and picker (e.g. item quality and substitutions).
AR3: Two-weeks after rst purchase - Direct mail offering tips on how to use service and
5 discount on next purchases intended to encourage re-use of online services.
AR4: Generic monthly e-newsletter with online exclusive offers encouraging cross-selling
AR5: Bi-weekly alert with personalised offers for customer.
AR6: After 2 months - 5 discount for next shop
AR7: Quarterly mailing of coupons encouraging repeat sales and cross-sales
Trigger event 3: Customer does not purchase for an extended period
AR1: Dormancy detected Reactivation e-mail with survey of how the customer is nding
the service (to identify any problems) and a 5 incentive.
AR2: A further discount incentive is used in order to encourage continued usage to shop
after the rst shop after a break.
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Targeting option 4. Current and predicted behaviour in responseand purchase
As customers progress through the lifecycle, if all interactions with different communications
such as email clicks and pages visited on site are captured, well be able to build up a
detailed response and purchase history.
Best Practice Tip 13 Develop an activity score to show levels of customer activity
Here each customer is scored according to their response whether it is the number of
opens, clicks, leads or purchases. Different communications can then be sent to list
members depending on their historical level of activity. Customers who dont seem to be
responsive to online messages can be targeted through other approaches such as direct
mail and phone.
A more sophisticated method of understanding behaviour is to categorise customers
according to the details of their recency, frequency, monetary value and category of products
purchased (RFM analysis). The RFM technique is quite involved, so we will cover that in
more detail in a moment.
Using these RFM techniques in combination with the other targeting techniques it becomes
possible to use predictive modelling to identify the Next Best Product for particular customer
types. With the right system of tracking and web analytics, it should be possible to see not
only which types of links in an e-mail a customer has clicked upon, but also which types
of web pages they have visited recently. For example, a select on the database for a wine
promotion could be used to target customers who have been to the wine section of the
website in the last 3 months, but have not purchased wine.
Targeting option 5. Multi-channel behaviour (channel preference)
No matter how enthusiastic you are about online channels, some customers will prefer using
online communications channels and many others will prefer traditional channels.
We call this Right Touching7 this is the holy grail of digital marketing delivering the
perfect message for each customer. Just one aspect of this is determining which customers
prefer email and then upweighting email activity more for them, while reducing frequency and
using more traditional communications for those who prefer these. These days we will also
need to consider social media response.
Best Practice Tip 14 Use a right touching approach to channel preference
It is useful to have a ag within the database which indicates customers channel
preference and by implications, the best channel to target them by.
Channel preference will be indicated by RFM and response analysis since customers with a
preference for online channels will be more responsive and will make more purchases online.
Customers can also be asked direct through surveys.
Customers that prefer online channels can be targeted mainly by online communications
such as email, while customers who prefer traditional channels can be targeted by traditional
communications such as direct mail or phone.
To deliver relevance also requires a plan specifying the number, frequency and type of online
and ofine communications and offers. This is a contact or touch strategy which is described
7 Daves denition of Right Touching
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in a later section.
Targeting option 6. Customer personas including psychographics
Once we have reviewed and selected from the ve targeting approaches above, a nal step
to think about is using designpersonasfor typical customer types.
Best Practice Tip 15 Use digital customer personasWeb design personas are a powerful web design technique increasingly used to improve
the usability and customer centricity of a web site.
What is it? Digital customer personas
Digital customer personas are a summary of the characteristics, needs, motivations and
access platform preferences of different groups of users.
These have the benet that they characterise segment types in the context of the targeting
options mentioned above such as stage in lifecycle, demographics and style preferences.We can also include psychographics which summarise the mental attitudes, motivations and
opinions of customers, for example:
Impulsive or rational decision maker
Price-conscious
Risk-taker or conservative
Willingness to share information or participate socially
View they want to project of themselves
The design persona concept can also potentially be used for e-newsletters, but isnt used sooften.
Personas are essentially a thumbnail description of a type of person. They have been
used for a long time in research for segmentation and advertising, but in recent years have
also proved effective for improving web site design by companies who have applied the
technique.
I have not heard about personas being used that much in an email context, but I think they
could be usefully applied, particularly for e-newsletters. One example where they were used
is where the American National Football League (NFL, http://www.nfl.com/nflnewsletter )
identied three types of scenarios one following a particular team who wanted to check
upcoming games, another who was very interested in the statistics associated with thefantasy league and another who tended to be more interested in the position in the league.
These are some guidelines and ideas on what can be included when developing a persona.
The start or end point is to give each persona a name. The detailed stages are:
1. Build personal attributes into personas:
Demographic: Age, gender, education, occupation and for B2B, company size, position in
buying unit.
Pyschographic: Goals, tasks, motivation
Webographics: Web experience (months), usage location (home or work), usage platform
(dial-up, broadband), usage frequency, favourite sites2. Remember that personas are only models of characteristics and environment:
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Design targets
Stereo-types
3 or 4 usually sufce to improve general usability, but more needed for specic
behaviours
Choose one primary personawhom, if satised, means others are likely to be satised
What is it? Primary persona
Digital customer personas are a summary of the characteristics, needs, motivations and
access platform preferences of different groups of users.
Once different personas have been developed who are representative of key site visitor
types or customer types, a primary persona is sometimes identied. Wodtke (2002) says:
Your primary persona needs to be a common user type who is both important to the
business success of the product and needy from a design point of view in other words, a
beginner user or a technologically challenged one.
She also says that secondary personas can also be developed such as super-users orcomplete novices. Complementary personas are those that dont t into the main categories
which display unusual behaviour. Such complementary personas help out-of-box thinking
and offer choices or content that may appeal to all users.
To summarise the approaches described, the example of Eurofce is a good one .
Eurofce targeted email marketing case study
Eurofce (www.eurofce.co.uk) is a large online ofce supplies company which targets small
and mid-sized companies. This description is adapted from the company web site press
releases and Revolution (2005). According to George Karibian, Eurofce CEO, getting the
message across effectively required segmentation to engage different people in differentways. The ofce sector is ercely competitive, with relatively little loyalty since company
purchasers will often simply buy on price. However, targeted incentives can be used to
reward or encourage buyers loyalty.
Rather than manually developing campaigns for each segment which is time consuming,
Eurofce mainly use an automated event-based targeting approach based on the system
identifying the stage at which a consumer is in the lifecycle, i.e. how many products they
have purchased and the types of product within their purchase history. Karibian calls this
a touch marketing funnel approach approach, i.e. the touch strategy is determined by
customer segmentation and response. Three main groups of customers are identied in the
lifecycle and these are broken down further according to purchase category. Also layered on
this segmentation is breakdown into buyer type are they a small home-user, an operations
manager at a mid-size company or a purchasing manager at a larger company? Each will
respond to different promotions.
The rst group, at the top of the funnel and the largest are Group 1 Trial customers who
have made one or two purchases. For the rst group, Eurofce believe that creating
impulse-buying through price-promotions is most important. These will be based on
categories purchased in the past. The second group, Group 2 The nursery have made three
to eight purchases. A particular issue, as with many e-retailers is encouraging customers
from the third to forth purchase, there is a more signicant drop-out at this point which the
company uses marketing to control. Karibian says: When they get to Group 2, its about
creating frequency of purchase to ensure they dont forget you. Eurofce sends a printed
catalogue to Group 2 separately from their merchandise as a reminder about the company.
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The nal group, Group 3 Key accounts or Crown Jewels have made nine or more orders.
They also tend to have a higher basket value. These people are the Crown Jewels and will
spend an average of 135 per order compared to an average of 55 for trial customers.
They have a 90% probability of re-ordering within a six-month period. For this group, tools
have been developed on the site to make it easier for them to shop. The intention is that
these customers nd these tools helps them in making their orders and they become reliant
on, so achieving soft lock-in.We can then target these segments through using elds within the database to identify which
segment customers belong to and then using mass customization an personalization to tailor
offers to these customers as described in the following section.
RFM analysis
As is well known by catalogue retailers, knowledge about customer purchase behaviour
typically falls into three key areas:
Recency of last purchase, e.g. 3 months ago
Frequency of purchase, e.g. twice per quarter or twice per year
Monetary value of purchase(s), e.g. average order value of 50, total annual purchase
value of 5,000.
Assessing these behavioural characteristics is known as RFM or a similar equivalent FRAC,
which stands for:
Frequency
Recency
Amount (obviously equivalent to monetary value)
Category (types of product purchased not included within RFM)These approaches have not been limited to retailers though, they have been a staple
approach for many years for some marketing applications such as catalogue and mail-order
companies; grocers and other retailers with loyalty schemes; charities who can track
donations and car manufacturers who can track car purchases or services through time.
However, for many other organisations, they have proved less relevant. With the advent of
web and email marketing, there are many more opportunities for applying this behavioural
customer information to use RFM in virtually every market. This is possible since recency
and frequency of purchase can be used to understand and respond to other types of
digitally recorded transactions and interactions, for example visits or log-ins to a website or
interaction with emails such as opens or clicks. These types of interactions apply not only toe-retail sites, but also relationship-building websites, brand-building sites and portals.
We will now give an overview of how RFM approaches can be applied in online marketing,
with special reference to email marketing.
Recency:
Recency shows the number of days since a customer completed an action.
Jim Novo stressed the importance of recency when he says:
Recency, or the number of days that have gone by since a customer completed an action
(purchase, log-in, download, etc.) is the most powerful predictor of the customer repeating an
actionRecency is why you receive another catalogue from the company shortly after youmake your rst purchase from them.
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