The Return on Relevancy: Are You Missing Out?

It's a telling perception. 

More and more, computer users perceive email as spam, even when they previously have opted to receive it.

Computer users responding to a recent JupiterResearch survey said only 16 percent of the messages they get come from companies whom they have given permission to send them email. 

"Now, we know it's more than that. But the perception itself is interesting," said David Daniels, research director for JupiterResearch. Daniels presented his information at the Silverpop third annual Digital Marketer Customer Conference May 19-20 just north of Atlanta.

In his presentation titled, "Effective E-Mail Marketing: the ROI on Relevancy and Targeting," Daniels shared results and analysis from several recent JupiterResearch surveys of email marketers, consumers and computer users.

What Jupiter found is that, even as they pursue profits, most email marketers dismiss the very thing proven to increase response and return: relevancy.

"Relevancy is king," he said. "It's what separates the top marketers from the rest of the pack."

But most offer-oriented marketers commit to static frequency, sending several emails a month, even though doing so has been shown to degrade response, Daniels said.

Among Jupiter's findings, nearly one-fourth of permission mailers are "batch-and-blast" mailers who don't differentiate at all between recipients. Most, about 65 percent, use quasi-personalization and segmentation, such as addressing recipients by name, or tailoring an offer by demographic or geographic information.

"It's a bit more relevant, but it's still relatively basic," Daniels said.

Although the majority of email marketers embrace simple segmentation tactics, Daniels said he was surprised to find only 31 percent said they used click-through data to follow up with more targeted messages. "Using behavior as an attribute to guide campaigns is a best practice that hasn't really been capitalized upon," he said.

Email marketers who target specific recipients, such as by sending birthday greetings, product replenishment or cart abandon messages, are achieving the highest returns, he said.

As the degree of relevance increases, so does response, Daniels said, calling the response to dynamic content "off the charts." Dynamic content is information that changes depending upon who is viewing it.

For many email marketers, the importance of sending highly relevant, appropriately timed messages is hardly news; the real trick lies in figuring out how to collect, organize and deploy all that customer data.

 "It's not that people don't want to," Daniels said.  "But it's the challenge initially of getting all that rich customer data together, and then making some sense of it," Daniels said.

"It also means we need to have a different outlook on how we do email marketing. We have to think about it as a roadmap, a communications tool . . . We have to decide what our goals are, and use relevancy to drive those results," he said.

Daniels outlined three types of highly relevant email campaigns, and the results achieved by companies using them.

Life cycle campaigns are a string of messages that are sent at predetermined intervals. This frequency can be timed to a product, sales or customer lifecycle. These are reoccurring campaigns, and completely automated. They generate on average a five-fold improvement in revenue over broadcast mailings.

Daniels noted a financial services company that sent four different messages for each of nine products over six weeks. The company experienced double its normal open rate, click-throughs in the 12-14-percent range, and a conversion rate two to three times above normal.

Triggered campaigns are comprised of messages that are triggered by an internal or external event. Examples include shopping cart abandon messages or order confirmations. This program is set up once and reoccurs as the event happens. They generate on average a seven-fold improvement in net profit over broadcast mailings.

Daniels noted a brokerage firm that began sending a daily closing summary to each customer. As a result, the firm has been able to reduce call center costs, and has delivered an additional $635 in profit per subscriber per year.

Targeting messages based on web-site click-stream behavior is a method that uses data pulled on a set interval (e.g. weekly) to offer content tied to the areas of the site where an individual has expressed interest. This method generates on average a nine-fold improvement in revenue over broadcast mailings.

Daniels noted a retailer using web-site data to target browsers of its three worst performing product categories. Targeting email messages to visitors who viewed those product pages resulted in a six-fold improvement in revenue, as compared to the control group. 

"Targeting works," said Daniels. "It's hugely profitable to do these kinds of things."