Driving Email Revenue Through Dynamic Targeting & Segmentation

Daryl Logullo
by Daryl Logullo 02 Sep, 2013

Email marketing, and the revenue that ultimately results from it, is one of the most overlooked areas of online performance. Just like in life, sometimes the best solutions are the most obvious. Let's open the email marketing hood, identify and execute the strategies that will drive major revenue increases.

The days of pressing send for bulk-and-blast email to support your online sales are over. The practice damages deliverability, increases complaints, raises bounce rates and can cripple an email program overnight. This is where dynamic targeting and segmentation save the virtual day.

1. Leverage Dynamic Content vs. Static Creatives
Nearly every email service provider (ESP) allows dynamically generated content on an individual subscriber level rather than static messaging. With a recipient list of 100,000, for example, marketers have the ability to deliver 100,000 custom-tailored creative messages. Until recently, of course, this required complicated programming within the ESP's platform. Today, most ESPs have robust UIs with drag-and-drop visual associations that make it as simple as a mail merge. The biggest benefit is that tailored messaging almost forces subscriber engagement, invoking natural human curiosity by speaking directly to a subscriber's interests. With the bulk of email people receive today, dynamic content is proving crucial.

Compare two popular email testing and segmentation strategies to boost open and click rates.

2. Utilize Personalization vs. Bulk Blasting Dynamic content, coupled with subscriber personalization, lets brand campaigns be more relevant. For example, if an opt-in form collects first name, last name and email address, marketers could add a new zip-code field to use this for savvy messaging like, "Daryl, how's your gift shopping in South Charlotte?" That's a highly effective subject line with practically guaranteed engagement. 

3. Create Deep Segmentation Segmenting recipients is not only one of the fastest ways to drive additional sales from house file lists, but the practice also turns average email administrators into in-demand marketers. It takes tactical thinking and planning, but once it's done, you can set it and forget it. Automation features inside an ESP such as data filters, triggers, APIs and auto-refresh functionality put this on autopilot, and make it far simpler than five years ago. Consider segmenting your list by:

a. Heuristic Behaviors:
New-to-File Names, Last Open, Last Click Each of the aforementioned behaviors/actions (when did they opt in, last open or last click) merit an entirely different plan to increase engagement. For example, a new subscriber hasn't had the chance to engage by opening a message yet. As a result, the send frequency needs to be different for new-to-file subscribers versus those who recently opened. Similarly, the sending pattern would be entirely different (more frequent) for someone recently clicking an email.

b. Segmenting Buckets: Leads vs. Current-Year Customers vs. Prior-Year Customers Three separate segments or "buckets" of subscribers could include:

(1) Subscribers who opted in but haven't converted are tagged as "leads" (typically acquired via a homepage opt-in form or lead-gen landing pages).
(2) Current-year customers are subscribers who bought/transacted within the last 12 months.
(3) Prior-year customers are subscribers who last purchased prior to the previous 12-month window.

These individual segments let marketers create three unique mail streams (but obviously require three different creatives and demand separate send frequencies). The advantage, however, is that it provides an opportunity to set strategy by managing a promotional calendar, controlling inbox frequency, and cutting unsubscribes and complaints so the contracted email volume with an ESP does not go over the limit - saving your enterprise both time and money.

4. Be a Reactivation Guru What's the value of one email address? This info reveals what your enterprise is willing to spend to acquire another. This valuation is most commonly done using lifetime value modeling (LTV), where the name is forecasted over a time horizon collecting future cash flows (sales), and then discounting in today's dollars to determine allowable cost per acquisition (CPA). However, is a name acquired for $0.25 versus $5 less valuable? This is where comp segment analysis and holdout testing come into play (see email testing showdown on page 34 for a more in-depth explanation).

What about all the names acquired that did not produce revenue, or resulted in low clicks or opens? This is when reactivation should be used. Reactivation initiatives - or reengagement campaigns - should be done separately from your current ESP. For example, hire a small ESP and park aged and unengaged names with them to avoid potential inbox deliverability issues. Via API programming, determine whether the names re-engage by querying opens or clicks on the subscriber level and then automatically move the name from the "reactivation ESP" to the main ESP. This compartmentalization gives precise data to analyze without the risk of ruining your deliverability with your main ESP and is especially important with the proliferation of spam traps and honey pots with aged names.