Conduct a Web search on “targeted e-mail” and you will retrieve nearly 2.5 million pages of matching information. Scanning a handful of these pages will reveal conflicting data on the best method for targeting your customers through e-mail. Instead of sorting through clutter, it may be better to expand your understanding of e-mail marketing and establish deeper and more profitable customer relationships by learning a few customer targeting basics: what it is, why it’s important and how to do it better.
Targeting consists of two steps: defining the targets and executing a contact strategy.
Defining the target is priority one. To help identify profitable targets, many use segmentation matrices or tree-based diagrams. Each cell of a targeting matrix or box in a tree diagram represents a specific target or customer segment. These segments can be defined as a unique group of profiles, with each profile representing an individual.
Individual profiles used to define a target customer set can be built a number of ways and are often comprised of data unique to each company. Data such as behavior, e-mail communication preferences, demographics and psychographics enable marketers to communicate with greater precision. But don’t just capture data for the sake of capturing data. Capture data that will lead to insights that will improve your tactical e-mail marketing strategy.
Surveys, product registrations, customer interaction and purchase history databases, and online cookies are a few common ways to build an individual profile, and each has its unique strength. The majority of experienced marketers agree that the most valuable of these profiling data points is an individual’s behavior. Whether it’s past purchasing behavior, propensity to purchase, Web site traffic behavior or even general Web surfing behavior, each can be used to more accurately predict future behavior than demographics or knowledge of interest categories alone.
It is important to remember to secure upfront permission from individuals before sending them such behavior-targeted e-mail. Companies from all industries are beginning to amend their privacy and opt-in policies. They’re offering full disclosure to those opting in to receive e-mail as well as securing consumer consent for receipt of marketing messages based on their online behavior.
After your customer profiles have been built with a foundation of relevant data, clusters or segments of similar profiles have been developed and any necessary permission has been acquired, your contact strategy should be planned and executed. Using accurate targeting tools and methods, robust tracking technology and a tactfully constructed opt-in list, e-mail can be highly personalized to individual customers’ needs.
By the execution stage, the profile data you’ve gathered should point you toward how best to communicate with your customers in a targeted fashion. How frequently do your customers want you to communicate with them via e-mail? In which format do they wish to receive your e-mail messages? What does their current and historical behavior on your Web site tell you about their interests and propensity to purchase? What Web sites have they visited that may indicate an interest in acting on your behalf?
Such targeting can be illustrated through a few real-world scenarios. For example, a company could implement a behavior-targeted e-mail campaign each week offering a discount to individuals who have abandoned online shopping carts valued at more than $100. Companies could also increase repeat purchases by using e-mail to target all customers who buy frequently, spending an average of more than $50 per transaction, or target those customers who visited the site in the past month by offering a loyalty reward coupon.
These targeting approaches leverage the power of clearly defined profiles and segments – delivering messages with extraordinary precision. E-mail marketing uniquely provides marketers with the ability to increase conversion rates by delivering a powerful individualized message to each profile or segment.
Advanced e-mail marketers, those that offer a variety of digital media channels such as Internet-wide banner advertising, e-mail marketing and offline integration, can deliver a more holistic view of each of your customers by integrating the behavioral and response data from these media channels. This can be of further help when refining profiles and segments.
As you progress, remember to continually test your approach to ensure that targets are accurately defined and that each segment is being contacted based on its needs and preferences. These tests should help you continually refine your target definitions while increasing the precision of your communications.