It's not enough to simply slap a name on an email and call it personalized. Here's what you need to do to truly connect with and understand your customers.
A retailer targeting young, hip consumers found the results of its email campaigns lagging behind expectations. Open rates had dropped, conversion rates were stagnant, and revenues per customer had declined. Even among the company's preferred customers -- those who had opted in to receive discounts and newsletters -- campaign results were off. Yet email still outperformed other marketing and advertising initiatives designed to drive consumers to the company's stores. The marketing team decided it was time to rethink its approach and began to discuss ways to re-energize email efforts.
Research turned up relevant sources of new ideas. One, an Aberdeen Group report entitled "Email Personalization: Get Personal with Your Customers," pointed to research that indicated personalizing email improves results, generates more click-throughs, improves open rates and conversions, and even affects metrics like customer retention and opt-in rates. The team considered personalization as well as a range of tactics, including refining segmentation techniques, mining its customer profile data for cues to purchasing behavior, sending trigger-based email, changing its approach to its preferred customers and integrating the email with other customer relationship management (CRM) efforts. The result? In-store revenues jumped as open rates surged and preferred customers opened their wallets in response to the new campaign.
So, what can marketers do to improve? Although organizations like the Direct Marketing Association aver that email delivers a better than 40 to 1 payout for every dollar spent on a campaign, not every marketer will see such results. When email isn't delivering measurable ROI, marketers must analyze their results, collect metrics and adopt best-in-class strategies, as identified by Aberdeen.
Strategies that improve results
The first step is to know your customer -- really know them. The retail marketers described above took a big first step by identifying their best customers. These weren't necessarily the ones who spent the most. Rather, they were the customers most willing to undertake interaction with the company by opting in for email newsletters, signing up for loyalty programs and regularly filling out forms and surveys. These loyal, interested customers served as early-warning radar for the company's marketing programs, providing insights that enabled the marketers to fine-tune campaigns based on the response of these high-value customers. By serving as the eyes and ears for the marketers, these customers provided valuable feedback the company used to adapt and refine its messaging based on real wants and needs. The company used these insights to develop highly targeted campaigns that presented compelling offers that drove traffic and, ultimately, sales.
Going beyond "Hello, John" as means of email personalization also boosts results. Ninety-six percent of organizations say personalization ups results, according to Aberdeen. The real results come with advanced personalization: using customer data and CRM to segment lists by geographical area, customer behavior, past purchasing habits and profiles to deliver custom content with personalized product recommendations. The good news is that technologies and tools have been developed that enable even small businesses to implement advanced personalization email marketing tactics.
Automating personalized email takes results up another notch. For example, event- or trigger-based email campaigns enable marketers to refine the content of personalized email and time the delivery of campaigns to reach customers at the best time in the buying cycle. Perhaps a specialty gift retailer's customer purchased handcrafted jewelry made by a particular designer, and another line of jewelry products by that same designer is ready to go to market; it's a perfect time to send out a follow-up email, and your email marketing solution should be tuned to respond to these triggers.
Of course, many of these best practices require a robust customer database tied to your CRM tools. This database should be a work in progress, refined with every customer interaction to include new demographic, behavioral and transactional information that can help marketers fine-tune messages and offers. This is a database of intentions, allowing you to segment your lists to ensure the right person receives the right offer with every campaign.
Continual improvement is the goal of mature organizations, and it's critical to the success of email marketers. Measurement, analysis and metrics do more than tell you who bought what and when; metrics provide a chance to alter campaigns midstream in response to customer behavior.
Marketers who continually strive to increase their understanding of the customer and use that insight to adapt their marketing messages have the advantage over those who only use simple personalization, neglect segmentation and ignore metrics. Those who are attuned to their customers' wants and needs, conversely, can see a 57 percent uptick in average order value by employing advanced personalization and the other strategies described here.
No matter the size of your customer base or your business, there is always room for improvement in your email marketing campaigns. Adopt a best-practices approach that includes personalization, segmentation, continual refinement of customer databases, integration of CRM and other marketing tools, email automation and measurement, and metrics. You'll create productive and lasting one-to-one relationships with your customers and stand out from the pack with messages and offers that are timely, targeted and compelling.