Incorporate personalization in e-mail and approach

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Segmenting your list and personalizing the e-mail content will drive better returns than blasting the entire list with the same message, but it can entail a lot of work with uncertain rewards.

One approach online retailers can take for e-mail personalization is to insert automated product recommendations via a third-party recommendation engine. Each subscriber will receive the same e-mail format, but it will contain a personalized offer tuned to his or her profile.

These personalized offers can drive stronger responses, but only require slightly more effort to create and manage. One vendor reports up to 300% higher Web site conversion rates driven by mailings containing embedded product recommendations, compared to impersonalized mailings.

Because e-mail personalization happens out of the context of a Web site visit, the recommendation engine used must have these capabilities. First, it must build a profile of each of your customers using data streams, such as purchases, product views on the Web site, search terms and reviews. Some engines pull in customer's behavior on competitors' Web sites or in social media. The engine then should generate product recommendations appropriate to the context and the customer's profile. Recommendations are emitted on demand, such as when a Web page loads or an e-mail message is viewed. The marketer has some control over recommendation business logic, like when to start and stop promoting products.

Recommendation engines are paid for either via a software license or as a percentage of revenue generated by the engine. To integrate e-mail with a recommendation engine, some engine vendors will send the e-mail for you, some will integrate with your e-mail service provider (ESP) and some can do either.

Choose a recommendation engine vendor that suits your business model and product line, or try one offered by your ESP. Next, choose how much of your e-mail creative you want to put under the control of the recommendation engine. Your ESP can help find a suitable balance of static and dynamically personalized content. Depending on your engine vendor, product personalization can be embedded in the batch as the messages are generated and sent in real time as the messages are opened.

Steve Webster is chief strategy officer at iPost. Reach him at srw@ipost.com.

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