Can You Afford to Be Relevant?
Brad LaRock, Digital River Inc.
While e-marketers often talk about relevancy in email programs, not many do anything about it. Research shows that even at the largest and most sophisticated companies, email campaigns are often driven by hit-or-miss strategies.
Relevancy is critical to creating successful customer-directed email. Otherwise you're just generating “junk”—junk messaging, junk offers, junk engagement, junk results and, perhaps, even a junk reputation. But that's not all; poorly directed and focused emails are expensive. There's an operational cost to getting campaigns out the door; when dollars are invested in email with little or no hope of success, your return on investment (ROI) deteriorates very quickly.
Relevancy that is taken to extremes, however, can be just as expensive. Not only do costs for creative and content balloon as you segment and profile your customers, but without wise and accurate planning, the programs you generate carry the same risk of delivering the wrong message to the wrong customer.
Optimizing your company's investment in email marketing, then, requires a truly strategic approach. You need to leverage multiple data sources in a progressive and even scientific effort that continually looks at ROI. It must balance and coordinate your “relevancy investment” with the lifetime value of the customer to produce maximum results.
Three key principles come into play with virtually all highly relevant and cost-effective email marketing efforts. They are:
1. Do the easy things first. In email campaigns it's essential that you start big. In other words, first go after the biggest market segments, target your best customers, and send offers with the broadest possible appeal. Chances are good that a 30 percent off coupon is going to appeal to a lot of folks. Send it to a wide range of current and potential customers and you're going to gather a lot of sales and useful customer information.
Only after you do an initial segmentation of your base should you begin exploring initiatives that are more granular. Segmentation is often an outgrowth of the customer relationship. As prospects move through the acquisition phases to become customers, converts, loyalists, and, ultimately, influencers for your product or service, each phase should be accompanied by messaging and a call to action that strengthens the relationship and builds sales.
Within each phase, email can also be triggered by specific actions. Say a customer has just purchased your desktop audio speakers for PC use. Chances are good that the customer is building out a new desktop system, indicating that messages about other PC accessories may be welcome.
If you're careful to use insight and restraint, virtually any action taken—or not taken—by the consumer can be a trigger for a segmented offer. Abandoned carts, first-time purchases, and periods of inactivity are appropriate for shipping offers, customer welcomes and win-back promotions. As long as you keep the “easy things first” mantra in mind, you're likely to improve the efficiency of each email you send.
2. Tests are a good thing. Variations, triggers, and timed events are all facets of segmentation. To use them cost-effectively, you need to test your ideas before setting them out before a wider audience.
Testing works best when you combine marketing objectives with the proper testing technique. Simple A/B testing of a creative concept is good for uncovering broad, sweeping insights. Multivariate testing, on the other hand, is more appropriate when you're seeking to identify trends or granular insights among specific customer segments.
One of the ways to increase the likeliness of success in your testing efforts is to create personas for market groups. Personas are “idealized” customers that carry similar needs and preferences. They're produced by aggregating information across a broad range of parameters, which is then analyzed to uncover similar traits and behaviors. Once you have specific personas established, it becomes much easier to generate creative with the right tone, message, and offer.
3. Automate the process. In nearly all email marketing operations, staff resources are limited. Many times, in fact, the email marketing department is one person. Whether you send 50,000 emails a month or 50 million, automation can often help reduce costs and increase relevancy.
Email technology, used internally or through an email service provider, can help you integrate e-commerce information with social media, Web analytics, and mobile data to improve the relevancy of your campaigns. Other disciplines can also be brought into play, such as email templates that can be populated with dozens of different subject lines, body text, images, and offers.
It's interesting to note that the world of big data, for all its promise, can be used to uncover insights that may be useful, but also regarded as intrusive by the customer. Marketers must always be careful to balance their efforts so the long-term health of the customer relationship is at the forefront.
As it turns out, the new age of data-driven marketing has been both a minus and a plus for companies and consumers. Customers realize that marketers have the ability to target their email with extreme precision—and as a result, have little patience for messages they regard simply as spam. By using email marketing tools and techniques effectively you can become much more than another item in the inbox; you have the potential to create productive, cost-effective, and relevant emails that build relationships and move the sales needle over the long haul.
Brad LaRock is VP of global customer marketing services at Digital River Inc.