The Value of a Number

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The Value of a Number
The Value of a Number

One of the challenges of marketing are the “blind spot” that fall between customer data and activity, according to Michael Iarrobino, product manager of FreshAddress. What's more, customers' inactivity may actually be the result of a marketer's approach to segmentation or messaging, he says.

“If you have a customer that's gone inactive or hasn't performed for you, that could be because they're not interested in your products and services…or it could be that you're not talking to them in the right way and you need to activate that potential,” Iarrobino says. “Looking outside of the things that you already know could be a good way to do that.”

Iarrobino recommends, for example, scoring customers by value attributes, and then using that information to create value-based segments. “You have your email address, but now let's [find out] a bit more about the person behind the email addresses and how best to engage with them and drive response with them,” Iarrobino says, noting that FreshAddress's eSpend Score ranks customers' email addresses on a scale from 0 to 100 and categorizes them by tiers: premium (81 to 100), high (61 to 80), standard (41 to 60), low (21 to 40), poor (1 to 20), warning (0), and duplicate. The assigned number is defined by a customer's spending data and engagement information, including opt-ins, unsubscribes, or complaints. “If somebody gets a 90 at that particular email address, that's a pretty high score, that indicates a very high level of engagement, high level of spending, [and] both capacity and willingness to spend.”

Iarrobino acknowledges that marketers might be more inclined to send differentiated, targeted messages during a down season than during the Holiday rush. However, he says not targeting at all can be one of email marketers' biggest downfalls.

“I've certainly run into a segment of marketers who just aren't doing [targeting],” Iarrobino says. “I don't think it's because they don't want to or because they don't see the value in it. It might be because they don't have the time or there are too many other expectations of them and they're stuck in a cycle.”

But taking the time to create segments and use targeting is worth the effort. Iarrobino cites as an example a nationwide home furnishing retailer that took that approach and discovered that the email addresses with a score of 61 or higher made 24% more purchases per person and drove 7% more clicks per person than those with lower scores.

Iarrobino advises marketers who score customers by value to target high and low scorers differently. For the lower scores, he recommends bulking up and being more aggressive with value propositions. As for the higher scores, Iarrobino suggests aiming to increase the average order price or spend, such as by excluding free shipping options from higher value customers more like to purchase without a discount or other incentive. The goal, he says, “is to flag those that deserve an upsell or a better pitch to drive up that price.”

DMNotes is DMN's around-the-clock blog. Yes, a blog in 2016.

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