How to segment & target prospects to deliver great results if you have a small Email Marketing budget

Last week, i wrote an article titled “Email Marketing, where are we now and where are we going in 2010?” and I received quite a few comments, emails, tweets etc that had a recurring theme – It all sounds great, but there’s a lack of budget & lack of knowledge in most companies and organisations. This got me thinking. To do the basics well, you don’t need to be an email marketing or CRM expert, and you don’t need a big budget. To really increase performance, you just need a pinch of patience and some common sense. Therefore, I’ve written an example case study that will hopefully get a few of you thinking.

Example case study:

Let’s continue with the theme that i set in my first post – you work at a popular online electronics retail company. Let’s say your email marketing and CRM team consists of one data planner, a HTML & design resource (probably borrowed for a few hours from E-commerce), and you as the strategist. That’s it. You’re a three man dream team, I promise.

To set a bit more of a scene, you already have an ESP that you use to broadcast your emails and we’re not going to exceed your monthly allowance, so that can remain the same. You have a database of 80,000 e-mailable prospects and customers, with a proportion of lapsed customers that you’re struggling to reactivate. The majority are a mixture of regular openers and clickers, just openers and less engaged prospects. A complete mix of people to captivate. You have a poor open rate that’s around 20% on average, but your click-through rate is not too unhealthy at 5% (that’s 5% of the delivered volume clicking through). On average, 0.5% of that delivered volume convert into a sale. I’ve found that it is this very scenario that stops marketers challenging their email performance. Prospects are opening and clicking, not in their masses, and some are buying, so if it’s not broken, why fix it? If this sounds like your email marketing strategy, it is broken. Let’s work out what we can do with this data, and how we can make the most of it to optimize your email performance without spending a single extra penny.

Identify potential ideas based on current performance

We know what all of our prospects and customers are clicking on, but only to category level, and we know this because our data planner can download these reports from our ESP. We know how long ago they clicked, and what they clicked on. It turns out that approximately 50% of our database have engaged with us in the last eight weeks, so we have a large proportion of fresh engagement data. We can also see whether these clickers went on to buy something. Let’s assume that this is all of the intelligence we have If we can’t afford to be really clever with our targeting through dynamic email, surely we can do something with all of the engagement data we have? You bet we can.

Take a close look at your data and see where your opportunities lay

Sit down with your data planner, and get them to run counts for you, as in-depth as possible, and in this case it is down to category level. Let’s say we end up with something like the following:

• 50% haven’t engaged in the last eight weeks so they’re currently generic prospects we don’t know anything about
• 5% have bought something in the last eight weeks
• 5% have clicked on a generic discount offer banner, but not made a purchase
• 15% have clicked on something in the TV category, but not made a purchase
• 10% have clicked on something in kitchen appliances, but not made a purchase
• 5% have clicked on something in the camera category, but not made a purchase
• 5% have clicked on a sat-nav or in-car product, but not made a purchase
• 5% have clicked on various other categories

Figure out your targeting (the common sense bit)

The 5% of prospects that have clicked on ‘various other categories’, are going to go into the same pot as the non-engagers (50%). This is because at this stage, unraveling 5% of our engagement data is not the best use of our time when we’ve got bigger wins elsewhere. We’ll also put the 5% of prospects that have clicked on a generic offer banner in this pot too because tactical messages have driven them to click through in the past. Those three pots combined makes 60% of our mailable database. We’ll target these prospects with an aggressive, tactical email, with the main offer as the subject line, with bags of urgency. Hopefully this will get many of these users clicking and we’ll be able to classify them into a different category in future. The 5% that have bought something in the past five weeks are going to be rested – we don’t want to potentially re-market the same products that they’re just recently bought. N.B – it’s generally good practice not to mail customers that have purchased recently, but the length of time you rest them for depends on your product and your individual company. This leaves us with 35% of database that we know we can talk to more relevantly, and as we all know, relevance drives revenue.

We have the remaining 35% of prospects already segmented by the category they have clicked on last, so we’re going to send them all exactly the same email layout, populated with products and offers based on the category they last engaged with. For the subject line, we’ll mention their category and get a price or discount in there too, and if you have the technology, get their name in the subject line too. This always increases open rates in itself. Overall, this is our best guess at knowing what each prospect is interested in so we’re going present them with a proposition and products that we think they are genuinely interested in.

Implementation

You will have your email/web designer create one editable HTML template for this campaign. Using this template, he or she will simply change the products in the email to  those that are relevant to the category we have for the prospect. So we’ll end up with 5 HTML files, one tactical and four category-based. We’ll set up the five mailings with our ESP, hooked up to the five segments your data planner produced for you earlier and broadcast. We’ll do this same process every week for four weeks, then measure month-by-month, year-on-year and evaluate.

To conclude

Remember that this trial will cost you nothing but a little bit of time. You do need to give it four weeks or so to really give your prospects a chance to engage, conversion to increase, and for you to be able to report properly and convince marketing heads that this could work long-term. Once you’ve tried something like this in your company and seen the results, you’ll be amazed. Imagine if you could go fully dynamic. Hopefully once you’ve tried this and seen the results it’ll be much more plausible, as you’ll have something of a business case.

Give it a go, and let me know how you get on. Got a question? Use the comments box below and I’ll get back to you as soon as i can. Good luck!

Tags: conversion, data planning, Email Marketing, Email Marketing Strategy, segmentation, targeting