[tweetmeme]Customers are not one-size fits all. So why send the same email to all?
Big businesses recognize that their email leads and subscribers are different from each other, with different buying behaviors, interests and motivations. As a result, they break down their lists into different segments and send them emails targeted and relevant to them. The goal is to better entice customers to take action on the emails received.
Discount Beauty Center http://www.discountbeautycenter.com/ uses email segmentation to win back customers and persuade them to buy again from the site. With the help of their email vendor Listrak, they developed a reactivation program where they email different offers to their different segments based on recency of purchase. They segment their list using the following breakdown:
- Those who had not made a purchase within 30-60 days: $5 off a $25 purchase
- Those who had not bought in 61-360 days: 10% off their order
- Those who had not made a purchase in more than 360 days: 15% off their next purchase
In addition to the offers, their emails also included references to the types of items the customers last bought, with links to the newest products in these categories or brands. A user who previously purchased a Ralph Lauren fragrance will be presented with other Ralph Lauren products in the email.
The reactivation program based on segmentation strategy resulted in the following:
- For the 1st segment, click through rate was 8.9%, with 13.6% of those responders making a purchase
- For the 2nd segment, the click through rate was 3.3% with a 25.5% conversion rate.
- For the 3rd segment, the click through rate was 4.4% with 21.3% of those making a purchase
The company sent two batches of email to these segments, the initial email and a follow-up email to those who did not respond to the first email sent. For the follow up email, the 3rd segment did better than the other segments, with click through rate of 2.4% and conversion rate of 14.4%
Lessons for Small Businesses
- The key to success in email marketing is to send timely, targeted, relevant emails to subscribers who have asked for them. Segmenting the list is an effective way to achieve this and improve effectiveness of the email campaigns.
- Segment your email list in ways that makes sense for your business. Email segmentation helps increase relevance, improving the likelihood that the recipient will take action (open, click, convert). By sending emails that the segment considers relevant, you are more likely to earn the trust of the subscriber and gain more credibility, resulting in improved response rates.
- Test, test and test. Send your subscribers different offers to find out which one works best. Tweak your subject lines and finetune your copy to find the best combination that will result in the best response rates.
Source: “Recency Modeling a Beautiful Thing for Discount Beauty Center,” Multichannel Merchant, October 2010 issue