By Devyani Sadh, Ph.D, Data Square. Featured article in Target Marketing Magazine
Email marketers can realize double digit lifts by implementing six proven strategies: Multivariate Testing, Dynamic Personalization, Analytically-driven Personalization, Social Media Integration, Email Outcome Integration and Email Segmentation. Recommendations are based on a variety of tests conducted by Data Square’s clients to boost email marketing performance.
A/B and Multivariate Testing
Testing is one of the most powerful weapons in an email marketer’s toolkit. Savvy marketers are differentiated from their less experienced counterparts based on the degree and type of testing they are conducting. However, the array of possible testing options can be overwhelming. If you are unsure about whether or not to embark on testing or don’t know what to test first, try the hierarchical approach below that lists proven ways to score some quick wins. Be sure to demonstrate the lift obtained by each tactic so you can continue to fund your testing initiatives.
Open Rate Optimization: Subject Lines and From Names in combination
Readability Optimization: Preview pane visibility, text versions, alt tags, visibility in different email clients and browsers.
List and Offer Optimization: Test different offers for different audience segments based on profitability. Segments may be based on lifecycle (e.g. new customers, active customers, inactives), purchase history, demographics, interests and preferences.
Creative Optimization: Call to action, copy, placement, layout, image to text ratio, size, image type, appeal, content, emotion, etc.
Relevance Optimization: Testing a relevance ratio along different segmentation and personalization dimensions such as on name, content, lifecycle, behavior, interactions, etc.
Creating relevance via personalization is another powerful tactic to enhance Email ROI. Personalization may be created at various levels. Name Personalization in the email or the subject line is the most basic method. Progressively higher levels of personalization include those based on geography, stores visited, brands purchased, purchase amount, last purchase date, customer lifecycle, interests, preferences, and demographics. Intelligent personalization designed to deliver relevant messaging to the customer can result in lifts upwards of 3x. Basic personalization (e.g. name) has also been found to show lifts.
When you combine personalization with predictive analytics, you begin to see exponential gains in profitability. One successful strategy is to develop predictive models that identify the next logical product for cross-sell and up-sell for each customer. Model-based recommendations are then integrated into a dynamically personalized email where each customer receives differentiated up-sell / cross-sell product messaging. This may be further enhanced by offer optimization based on product-level or customer-level lifetime value. If you don’t have the resources to build a predictive model, you could identify the next logical product based on business rules and basic reporting. To learn more about how predictive analytics and an enterprise testing strategy can enhance the efficiency of campaigns, please refer to my article on Four Ways to Increase the ROI of your Marketing Campaigns.
Social Media Integration
Emails with social media links that can be shared and tracked are a great way for marketers to leverage the social web. The first step is to create an advocacy index for each customer based on the number and type of emails that they have shared on social sites. Advocates may then be identified and treated differently for various marketing programs. At Data Square, we have redefined the traditional notion of Lifetime value to incorporate not just the customer’s direct revenue/profit but the value that they bring based on their social influencer status.
Email Outcomes Integration
Many marketers have marketing databases that don’t include email outcomes such as opens, clicks, bounces, etc. Integrating email outcomes within the marketing database at the customer level can be very helpful. For example, integration would allow us to treat customers that have clicked but not purchased with reminders and/or progressively higher incentives designed to increase spend.
Actionable Email Segmentation
Once you have integrated email outcomes and social media advocacy within your marketing database, one of the first things to consider would be an email segmentation scheme. The segmentation should classify customers into actionable categories based on email behavior within a designated time interval. A simplification of a highly successful retail client implementation is outlined below.
Customers were hierarchically classified into the following behavioral segments:
Social Media Advocates – derived based on the number of times customers shared an email on social sites.
Email-inspired Purchasers – attributed based on link clicking followed by purchases made within specified time frames.
Coupon Redeemers – based on redemption of coupons provided exclusively via email
Clickers – based on email clicking in the last 6 months (but no purchases)
Openers – based on opened emails in the last 6 months (but no clicks or purchases)
Receivers – based on delivered emails that were not opened/clicked.
Undeliverables –those with bad/ bounced emails
No Email – those without an email.
Unsubscribed – customers that opted-out of email communications.
The objectives were to a) track migration patterns b) create differential strategies for different segments and c) move people up the email ladder. A sample segment-specific strategies is shown next:
Social Media Advocates were sent custom-designed emails with special incentives to leverage influencer status.
Purchasers were sent emails designed to reinforce and enhance their current patterns as well as to move them up to advocacy status.
Redeemers were assessed in terms of profitability and sent emails for price-sensitive customers.
Clickers were sent reminder emails as well as a progressively higher frequency of emails along with engagement and incentive options
Openers were sent more compelling offers based on their lifetime value.
Receivers were treated with ECOA to acquire their new address via a double opt-in process. Additionally, various tests (subject lines, from names) and segments (e.g. by email clients) were created to diagnose the root cause.
Undeliverables and those in the Bad email group were treated with Email Hygiene. Emails such as devyani@datasquare-com or devyani@datasquare/com could easily be corrected to email@example.com via email hygiene processes.
No Email group was treated with a permission-based double opt-in email append based on name and address, thus increasing the effective base for communication.
Receivers and Unsubscribes were touched via more expensive media such as direct mail, after screening by lifetime value.
The strategies resulted in significant segment migration up the ladder and gains realized from the overall initiative were in the double digits!