By Loren McDonald, Vice President of Industry Relations
If you base your email campaigns on a single message shipped to your entire list, you're overlooking one of email's great advantages over other communication channels, especially print and broadcast.
Meaningful segmentation delivers messages that are more relevant to your recipients. Segmentation is as close as you can get to one-to-one communication on a mass level. Higher relevance through more personal communication drives higher returns and fewer spam complaints.
Although broadcast campaigns helped lay the groundwork for making email the communication channel that delivers the highest ROI, the most effective marketing programs are now a series of "narrowcast" messages.
These launch either simultaneously or as appropriate, based on factors such as where recipients are in the buying cycle, their personal information, or activities that trigger specific messages.
How Segmented Campaigns Outperform Broadcast
Of all the mistakes covered in this series, not using segmentation has the biggest negative impact on ROI. JupiterResearch suggests that targeted email campaigns generate an ROI of five times that of broadcast emails. Furthermore, emails based on Web-site click-stream behavior deliver an ROI roughly nine times greater than a batch-and-blast approach.
According to MarketingSherpa, segmented email campaigns draw a 20 percent higher open rate than broadcast campaigns in the first 30 days, with click rates that exceed broadcast by a 2-1 ratio. This click-rate improvement increases in the all-important fourth business quarter, during which segmented campaigns in the last 90 days of the year draw click rates that are five times higher than those on unsegmented campaigns, according to MarketingSherpa.
Today's email recipients want to see personalized messages that reflect their own interests, preferences, expectations and relationship with you, including a history of purchases or other transactions. Failing to segment gives your competitors that do segment a clear competitive advantage.
Leveraging User Data to Create Segments
All or most of your subscriber data can be used to create segments.
Some of it is explicit data, such as demographic information or interests subscribers supplied to you on preference pages, customer-support contacts, surveys, etc.:
- Gender, age, marital status
- Industry, job title, company size
- Location
- Content preferences-e.g., biking versus running
- Frequency preference
- Format preference (including a mobile version if you offer it)
- Acquisition source
In addition to the explicit data, you have implicit information gathered from subscribers' email, Web-site and purchase behavior. Examples of behavior that can be used for segmentation include:
- Length of time on your list
- Email open and click activity versus inactivity
- Email click activity (e.g., specific types of links that imply interests)
- Purchase history
- Web-site activity
- Lifetime customer value
- Offline activity
Even if you don't gather detailed data, you can create segments using key indicators such as list age and message interaction.
Segmentation can also help you battle list churn by keeping subscribers more engaged. If you keep sending the same basic "buy this widget" message week after week, you will gradually turn off many of your subscribers who fail to engage with the continuous stream of irrelevant messages.
