Email Segmentation for Retailers
Email segmentation is clearly one of the most powerful tactics available to marketers today. For retailers however, it's proving an absoutely essential practice - those that do, perform well, And those that avoid the practice, simply don't. Website Magazine asked Richard Turcott, CEO of Mill33 about the role that segmentation plays in the success of email marketing campaigns for merchants in the competitive e-commerce landscape today.
WM: Why should Internet retailers in particular more fully explore the use of email list segmentation?
RT: Blanketing your list with the same message will not be as effective as sending segmented cohorts in your list a targeted email that speaks to their specific pain points, wants and needs.
By segmenting your list you can enjoy significantly higher in-box delivery rates, open and click thru rates. Segmentation offers marketers the ability to more effectively deliver the right message to the right person at the right time. Fundamental examples include creating different distribution lists for prospects and customers, or creating segmented lists based on the self-declared interests of your prospects and customers.
WM: What are the typical “barriers to entry” for those involved in segmentation for e-commerce merchants?
RT: Typical barriers to entry include easy list query and segmentation tools.
WM: What are some effective ways for Internet retailers to segment their list? Are RFM metrics dated?
RT: There are myriad ways to score and segment your database. I am still a big believer in R.F.M. scoring. Done properly, this scoring methodology gives direct response marketers an effective tool for visualizing segments, building A/B tests, and developing relevant offers and cross promotions. R.F.M., however, does not contemplate product SKUs. Product SKU shopping and purchase information can be a good predictor of future consumption behavior as well. I recommend R.F.M. scoring as a cornerstone for your segmentation efforts. Other purchase and shopping data should also be considered when building your segments.
WM: Should communication style change based on the segmentation strategy selected?
RT: Your “communication style” includes, among other things, the tone of your brand. I do not advocate using different communications styles across your segments – especially if your number of segments grows and becomes more sophisticated. Part of the “art” of marketing is maintaining your brand identity as you speak to your segments in a way that engages them with compelling copy, creative and offers.
WM: How does segmentation impact purchasing decisions? Is it an issue of trust or relevance?
RT: Segmentation helps increase relevance. Relevance begets more relevance over time and this helps the email marketer and email recipient forge a bond of trust. If your recipient has received relevant content in the past, she will likely continue to find your email relevant in the future.
It’s important to remember that trust is earned over time and is the result of a consumer’s experience with your brand across all interactions, not just email.
Customer experience is the sum of all experiences your customer has with you over time. All functional areas of an organization (not just marketers) need to manage customer experience across all channels including on-site/in-store shopping experience, support experience, product experience, shipping policies, return policies, etc.