Ap42 Email Marketing - Getting It Just Right

Masters of New Marketing

email marketing Getting It Just Right

email trend #1 Email Fatigue

email trend #2 Highly Measurable

email trend #2 Social Media Integration

email marketing An Analytic Overview

advantages of email‣Cost effective to produce‣Ease of use‣Ease of storage (both message and contacts)‣Fast‣Great information tracking for better understandingof entire dynamic (forwarding, open rate, responses)

drawbacks of email‣Inbox Clutter/TMI‣Somewhat impersonal‣Viewed as spam if not relevant !‣Compact/Short: email is built for brevity

email math Tools of the Trade

email math & definitionsBounce RateThe percentage of total emails sent that could not be deliveredto the recipient’s inbox.Delivery RateThe percentage of emails that were actually delivered torecipients’ inboxes, calculated by subtracting bounces from thegross number of emails sent, then dividing that number by grossemails sent. 95% is an acceptable standard.Conversion RateThe percentage of recipients who clicked on a link within anemail and completed a desired action, such as filling out a leadgeneration form or purchasing a product.Email Forwarding/Share RatePercent of recipients who clicked on the Share or Forward button

email math & definitionsClick-Through Rate (CTR)The percentage of email recipients who click on a link within the email.Can be measured using either number of unique clicks or total numberof clicks.Revenue/Piece ‣ Total Order Dollars/Total # of Pieces emailed ‣ Combines both RR and AOS {(RR/100) x AOS} = $/Piece. ‣ $/M (Dollars per Thousand Sent)Open RatePercent of recipients who open email.Unsubscribe RatePercent of recipients who unsubscribe.

types of marketing emailAcquisition or RevenueDesigned to elicit a lead gen or a purchase.Customer LoyaltyDesigned to build relationship with recipient (i.e., Newsletter).Win Back/ReactivationSpecial offers targeted to lapsed customers.

SEGMENTATION AND TARGETED MARKETING

What doesn’t work: Treating all customers alike 80% 79.67% 60% 40% 24.82% 20% 15.83% 1.52% 0% 20% 21.83% 40% 5% 11% 28% 28% 28%

marketing to customer segmentsYour Best Customers - Spend Service 80% of Revenue GOLD Dollars Here Your Best Hope for Move up Spend MarketingNew Gold Customers Dollars Here 1% of Total Revenue These may be Losers Reactivate or Archive

segmentation methodsNeed to rank customers/prospectsfrom best to worst:RFM: Recency, Frequency, Monetary ValueModeling: Regression Analysis, Log Linear RegressionAID/CHAID Analysis: Tree Analysis, Pattern RecognitionBuyer Groups: Based on product groups

customer management & contact strategy‣Objective is to generate incremental sales and profit.‣There is a dual emphasis on the profitability of each event andthe lifetime value of specific customer segments.‣Short term strategies emphasize the current bottom line.‣Lifetime value is tied into multi-year, long term strategies.

why model/targetModeling/Segmentation will allow you to:‣Maximize ROI capability‣Increase LTV‣Help you to define inactive customers‣Create different messages to different file segments(Best Buyers vs. Reactivation Messaging)‣Manage your business with more intelligence

SINGLE CONTACT EVENT

NO SEGMENTATIONSegments Qty $/M TotalSegment 1 10,000 $15,000 $150,000Segment 2 10,000 $15,000 $150,000Segment 3 10,000 $15,000 $150,000Segment 4 10,000 $15,000 $150,000Segment 5 10,000 $15,000 $150,000TOTAL 50,000 $15,000 $750,000 RR = 1.5%, AOS = $100

SEGMENTED CUSTOMERSSegments Qty $/M TotalTop 20% 10,000 $25,000 $250,00021 - 40% 10,000 $20,000 $200,00041% - 60% 10,000 $15,000 $150,00061 - 81% 10,000 $10,000 $100,00081 - 100% 10,000 $5,000 $50,000TOTAL 50,000 $15,000 $750,000 RR = 1.5%, AOS = $100

CONTACT STRATEGY ACROSS MULTIPLE EVENTS

strategic advantages‣Segmentation yields its greatest dividends when it is applied across multiple customer events‣Allows you to plan a long term, integrated messaging campaign based on specific customer targets‣By using this information, you can invest smarter (Time, Resources, Capital). More investment with your better/best customers and adjusted, less investment on your less active customers‣A contact strategy test design can tell you in a very systematic way, what are the more profitable strategies

CONTROL GROUP MONTH Segments 1 2 3 4 5 Total Top 20% X X X 3 21 - 40% X X X 3 41 - 60% X X X 3 61 - 80% X X X 3 81 - 100% X X X 3TEST DESIGN TOTAL 5 0 5 0 5 15 TEST 1 MONTH Segments 1 2 3 4 5 Total Top 20% X X X X X 5 21 - 40% X X X X 4 41 - 60% X X X 3 61 - 80% X X 2 81 - 100% X 1 TOTAL 5 2 3 1 4 15 TEST 2 MONTH Segments 1 2 3 4 5 Total Top 20% X X X X X 5 21 - 40% X X X X X 5 41 - 60% X X X X 4 61 - 80% X X X 3 81 - 100% X 1 TOTAL 5 3 4 2 4 18 Segment Qty = 10,000

CONTROL GROUP MONTH Segments 1 2 3 4 5 Ave. RR Top 20% 1.50% 1.30% 1.20% 1.33% 21 - 40% 1.20% 1.10% 1.00% 1.10%RESPONSE RESULT 41 - 60% 1.00% .95% .90% .95% 61 - 80% .80% .70% .60% .70% 81 - 100% .70% .60% .40% .57% AVE. 1.04% .93% .82% .93% TEST 1 MONTH Segments 1 2 3 4 5 Ave. RR Top 20% 1.40%% 1.00% 1.10% 1.00% 1.10% 1.12% 21 - 40% 1.10% .90% 1.00% 1.00% 1.00% 41 - 60% 1.00% .95% .90% .95% 61 - 80% .80% .60% .70% 81 - 100% .70% .70% AVE. 1.00% .95% 1.02% 1.00% .90% .89% TEST 2 MONTH Segments 1 2 3 4 5 Ave. RR Top 20% 1.40% 1.00% 1.10% 1.00% 1.10% 1.12% 21 - 40% 1.10% .90% .85% .80% .95% .92% 41 - 60% .90% .80% .85% .90% .86% 61 - 80% .80% .70% .60% .70% 81 - 100% .70% .70% AVE. .98% .90% .88% .90% .89% .86% Segment Qty = 10,000

CONTROL GROUP MONTH Segments 1 2 3 4 5 Total Top 20% 150 130 120 400 21 - 40% 120 110 100 330 41 - 60% 100 95 90 285 61 - 80% 80 70 60 210 81 - 100% 70 60 40 170 TOTAL 520 465 410 1,395Test Results:Total dollars for 50M test quantity = AOS ($100) x 1,395 = $139,500Rollout Estimation:Rollout quantity = 1,000,000 customer records. (20 times test qty.)Estimated total dollars to rollout strategy = 20 x $139,500 = $2,790,000

TEST GROUP 1 MONTH Segments 1 2 3 4 5 Total Top 20% 140 100 110 100 110 560 21 - 40% 110 90 100 100 400 41 - 60% 100 95 90 285 61 - 80% 80 60 140 81 - 100% 70 70 TOTAL 500 190 305 100 360 1,455Test Results:Total dollars for 50M test quantity = AOS ($100) x 1,455 = $145,500Rollout Estimation:Rollout quantity = 1,000,000 customer records. (20 times test qty.)Estimated total dollars to rollout strategy = 20 x $145,500 = $2,910,000Increase in estimated sales of $120,000 (4.3%) for same number ofreallocated emails.

TEST GROUP 2 MONTH Segments 1 2 3 4 5 Total Top 20% 140 100 110 100 110 560 21 - 40% 110 90 95 80 95 470 41 - 60% 90 80 85 90 345 61 - 80% 80 70 60 210 81 - 100% 70 70 TOTAL 490 270 360 180 355 1,655Test Results:Total dollars for 50M test quantity = AOS ($100) x 1,655 = $165,500Rollout Estimation:Rollout quantity = 1,000,000 customer records. (20 times test qty.)Estimated total dollars to rollout strategy = 20 x $165,500 = $3,310,000Increase in estimated sales of $520,000 (18.6%) with additional &reallocated emails

email & social media strategies‣Determine where your customers are on social networks, what they are sharing, what they are saying.‣Identify key influencers and tag them on your customer database.‣Treat them as ‘special customers’, like you should be treating your best customers.‣Offer them special deals/promotions, advanced previews of products, invitations to store events, etc.‣Monitor their reaction in the social media.

Which marketing tactics have the best ROI in your company?(Top 10 Only)Source: DMA National Client Email Report; 144 respondents; May 2012 70% 67% 60% 50% 38% 37% 40% 30% 20% 19% 16% 15% 13% 10% 12% 11% 11% 0% nt & g s er s g g ns s l ai ve g ow ip te s in in in itt l E in io M sh Si t t t ia et ke Sh ke ke at Tw ct or ng nt ark el ar ar ar ire e ns R ki lM M em ad rie M D po or ic e Tr ai pe ld l bl w in Te tS Em Ex Fie Pu et nl en O N Ev al ci So

Which marketing tactics do you believe create enduring andprofitable customer relationships? (Top 10)Source: DMA National Client Email Report; 144 respondents; May 2012 80% 72% 70% 60% 50% 40% 36% 35% 30% 20% 30% 27% 25% 22% 10% 18% 16% 14% 0% nt & g g ns g s er es s l ai ve g te ar s in in tin itt l E in io iti M Si in t t ia et ke ke ke at un Tw ct eb ng nt k el ar ar ar m ire ar W R ki lM M M om rie M D or ic e ile ai pe ld bl C in w Em ob Ex Fie Pu nl et n Fa O M N al e in ci nl So O

Masters of New Marketing

Ap42 Email Marketing - Getting It Just Right

by AP42 on Jul 20, 2012

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