The practice of creating a seamless customer experience across digital channels has been a common marketing challenge for a long while now, and integration of some offline and online channels through campaign segmentation is the norm. However, for most of us it is difficult to get a grip on every part of the customer experience.
To put this into perspective, there are typically more channels or touch points throughout a customer experience that are entirely generic and not personalised at all, versus those that are. They are not personalised by name, proposition or offer, call to action, location. None of that. This is diluting the effectiveness of a CRM strategy because we don’t have a clear understanding of what every individual experiences through every single channel. But this is changing.
Take a look at this:
Technology is beginning to bridge some of the knowledge gaps to identify non-converting prospects who visit their retail stores. Some brands have tried to patch over this marketing need with solutions such as in-store wifi, but this newer technology is incredibly powerful to marketers. The customer experience in the video above could have resulted in a simple browse and no sale. The marketing opportunities created from understanding that experience through the data collected, will help us to follow-up appropriately with the right content, at the right frequency at the right time – all with an enriched profile of that customer.
The marketing challenge is beginning to shift towards a desire to converse “sequentially” with prospects and customers through any channel at any time. Sequential messaging across multiple devices, locations and mediums. All of these could be personalised, tailored and in a defined, tested and optimised sequence:
In-store offers and personalised greetings
In-product messaging (some cars are already enabled in this way)
Algorithms could be developed, to enable CRM platforms to intelligently learn and adapt to the best performing sequence of proposition, content and timing. Automatically.
What does all of this mean for Marketers?
Marketers will soon be spending much less time thinking about which message to send through which channel, but more time deciding on the right sequence of messages with the channel serving as a distribution channel. I like to think of this as ‘the channel of one’.
A few weeks back I got a new Nectar card and used it for the first time last Saturday, clocking up my very first Nectar points.
Impressively on the following Tuesday the postman delivered me a piece of DM from Sainsbury’s.
This was no co-incidence, the opening line of the DM is “As you’ve recently picked up your first Nectar points at Sainsbury’s…” – a great lead-in line that immediately makes the content relevant to the reader.
A slick piece of marketing, triggering a DM shot from first use of a Nectar card, the design is a great example of how to welcome new customers
The DM design and content shares many best practices with email design best practice
A distinctive circle attracts the eye as the starting point
The headline “We’re here to help you get started” has clarity and tells the reader immediately what this is about – no need for hype here
The first paragraphs speaks to the individual
The brown signs give visual clues to direct your eyes across the pages
Copy is chunked and easily scanned
Icons and images are functional and support the message, no pointless pictures of a stock happy shoppers
The DM format is a horizontal foldout but the same concepts for eye-path flow can be adapted to vertical email design.
The messaging of the DM has clear purpose addressing in a logical order
The different ways to collect Nectar points
What you can do with the points you’ve collected
A next step to finding out more
Welcome campaigns are about education, providing customers with key useful information so the relationship can continue to develop.
Finally when turning the last foldout of the DM there are vouchers that incentivise the Nectar point collecting habit.
So there it is; great design, brand education and incentives to continue the habit that’s just started.
The key ingredients of every Welcome campaign, whether in DM or Email.
Our findings last month on the Obama campaign caused a lot of debate but the bare facts of our analysis still stand – had Obama’s team optimized for improved open rates, their send volumes would have dropped and their all-important donations would have followed.
Open rates remain a widely used and hugely misleading measure of performance and engagement in the email industry. At best they give you an idea of a campaign’s performance in isolation but at worst they lead email marketers to focus on optimizing the wrong strategies for their email program.
Here we discuss how to identify if maximizing open rates is holding you back and how to go about identifying the strategies that will have the biggest impact on your results.
The open rate paradox
Using EDS Analyst we examined the relationship between open rates and total unique opens for the top 200 email senders by list size in the US for 2012.
We were confident that, like the Obama campaign, there would be an inverse relationship between rates and totals – so as rates increase, totals decrease and vice versa. We call this the open rate paradox or to paraphrase a popular sports trusim: rates are for show, totals are for dough.
Each dot on the graph below represents a single sender and we picked out some well-known brands as reference points.
Sure enough, the graph shows that for most large senders, there is an inverse relationship between open rates and the total number of opens – the higher the open rate, the lower the number of total opens. Rates are for show.
It’s also no coincidence that nearly all of the brands with the biggest lists (orange dots) also have highest number of total opens because they are sending more opportunities to open.
Although opens don’t directly correlate to revenue, even the most avid fans of open rate maximization would agree that the more people that actually open your emails, the more engaged your database and the more revenue or conversions you are likely to generate. Totals are for dough.
Keep it simple – focus on just three strategies
If your goal is only to improve open rates, then your strategy is simple: halve your list by suppressing your less active subscribers and watch those rates soar… and those total opens plummet! But if your goal is to increase total opens, then the bell curve in the graph above helps define three clear strategies:
Has the biggest impact on totals and can be improved independently of the other two.
Increase send volume: Significantly increases total opens for relatively little effort (low effort to gain ratio).
Optimize for rates
Increases total opens but requires the biggest effort (high effort to gain ratio).
Most brands are clustered towards the lower middle of the curve because it’s the easy place to be. By and large, they all put a similar amount of effort into their program and use the same undefined strategies.
The outliers, however, go above and beyond in one of three ways – those to the right have very high open rates, those to the left have high send volumes and those at the top are combining high send frequency with very big lists to produce massive send volumes.
In effect, this is the three different strategies implemented to their extremes.
Of course, there are limits to the effectiveness of each strategy and these are defined in the graph above by the orange line to the left (frequency cap) and green line to the right (optimization cap).
These boundaries exist because for any given list size there is point at which diminishing returns kick in for both frequency and open rate. And, as the big empty space to the right of the green optimization cap shows, it’s very hard to send a large volume of email while still achieving a high open rate.
So the basis of a successful email program is to continually grow your list while finding a balance between increasing send volume and maximizing open rates with better offers, targeting, subject lines, etc.
And you find that balance by ignoring your open rates…
Define your strategy by ignoring open rates
To illustrate the effect these strategies have on an email program, we have created a simple optimization chart, below. The green curves represent the impact of send volume on total opens and the brown lines represent the impact of open rate on total opens.
Each intersection represents a hypothetical 10-hour unit of resource, as a means of comparing the effort required to implement each strategy. As you get closer to each cap, the effort required to improve your totals with your chosen strategy increases exponentially.
Imagine your brand is the star in the middle of the curve and you want to take on your leading competitor, the lightning bolt.
If you use open rates to define your strategy, then you focus your resource on maximizing those, route A. Your open rate may now be much better than your competitor’s but they are out-mailing you, so they are still creating twice as many opportunities to buy or convert.
If you choose to increase your send volume, ‘route B’, then your open rate drops but your total opens more than double. However, as you approach the frequency cap, the impact of your strategy diminishes and you still trail your competitor.
If you use totals to define your strategy, then you take ‘route C’, which balances resource between increasing send volume and maximizing open rates. Your open rate drops but you are finally creating more opportunities to buy than your competitor.
Smart email marketing is not just a case of increasing send volume indiscriminately or of only focusing on ever tighter targeting. There is a balance that exists for each brand, you just have to find your own sweet spot.
Total opens the key to optimizing your program?
In this instance, we have highlighted the open rate paradox using total opens because that was the data available. However, we’re confident you will find the same inverse relationship in your own campaigns with total clicks and, more importantly, revenue. And in the end that’s the only metric that matters!
I just got this email from LinkedIn Subject Line “A change to your DMA: Direct Marketing Association (UK) Limited digests” – the 3rd such email I have had this week about a group I belong to.
In it they tell me that they are going to ignore my mailing preferences and unsubscribe me from the group digests of which I get 1 a week a frequency selected by ME! I have now been forced to go and re-subscribe to the weekly digests of groups that I want to hear from 3 times this week. Do LinkedIn really think that is a good use of my time?
Just in case anyone was wondering, while I am not really a FB kind of person I definitely am an UBER LinkedIn user.
- I am a paid subscriber and highly active – I post, place jobs, recommend stay in touch connect etc.
- I have several thousand connections
- I check my page multiple times a day and use it as my primary vehicle for maintaining my business network. I have my preferences set exactly the way I want them for some groups – no email, others weekly and some daily
- I get 10 or more emails a day from linked in and open about 1 in 3 on my desktop and 80% of them on my mobile
- I click on at least one a day and some days 3 or more
- I save all my emails I currently have 2900 in my Linked in folder of which less than half 1427 are “unread”
- I regularly search for old messages or invites and click on them
So how on earth can a bunch of engineers and/or too clever by half marketers come to the conclusion that they know what I want better than me?
The irony is by stopping the DMA group weekly digest, they are going to reduce the chances of me ever visiting again! I wonder how the DMA and other group managers feel about that.
I can’t understand why having gone to the trouble of asking me to set my preferences LinkedIn should choose to expressly ignore the stated preference from a highly engaged – dare I say knowledgeable – paying subscriber. Surely that is as bad as spamming after all what is so different about these 2 scenarios?
1) I use LI preference centre choose to receive 1 email a week – after 3 months LI decide to unsubscribe me for not visiting the group.
2) I use LI preference centre and choose to receive 1 email a week – after 3 months LI decide to send me daily digests or 3rd party emails from partners they think I should hear from
LinkedIn are insulting their members’ intelligence one would think that someone like me would know how to both unsubscribe or hit the spam button. So if I haven’t done either of those things, it’s probably because…I DON’T WANT TO!
Developing a good email marketing strategy can be a daunting task. To help you get some perspective, here are 3 key stages to keep you on track.
Develop a customer centric communications strategy.
I know this can be a bit of an overused statement, but to make the email channel work in the modern environment of priority inboxes’ etc it is vital. Focusing on the needs and motivations of the customer as they would relate to your brand is a great place to start. If you are going to be talking to the customer and expect them to engage, purchase or become loyal as a response, you’ve got to say the right things. This can’t be done at a campaign tactical level, when the heats on to get more sales to hit target; it needs to be part of an overriding communications strategy. This strategy will set out more than just how many promotional emails need to be sent to achieve revenue objectives. To develop this email communication strategy, these are some of the key elements.
Understand how your customers perceive the brand and its products or services.
Research the motivations and needs that engagement with your brand satisfies.
Research the strengths that define your brand equity.
Define your customer lifecycle and set business rules to identify where each customer sits.
Focus the strategy on increasing LifetTime Value
Once you have got a clear idea of your customer and the stages the customer goes through in their engagement with you (from discovery to defection), you can start to plan. One key objective of any email communications strategy should be to increase revenue by increasing customer lifetime value. Now, don’t think this is purely a retention statement, it equally counts for acquisition too.
If you’re going to be focusing on lifetime value, it will have an impact on which sources you target for acquisition. Customers coming from sources that provide a low lifetime value customer should be avoided, or the price you pay for acquiring the prospect should reflect their future value. In the case of an email address, they are not all worth the same, so the first task would be to identify sources of prospect email addresses that will provide good future customer value. A good place to start is to look at any results you have from past activity, and look at the overall sales achieved over time, from those customers. The problem with email is that it is a cheap marketing medium that can be abused with little (apparent) cost implication. Good email prospect data, costs far more than poor quality prospect data, but can be far cheaper in the long term, as it produces good long term results.
Without the understanding of the customer (and you’ll only get this from the research suggested above) you won’t be able to sell to the customer what they want, how they want it. You’ll only be able to sell your product or service how you perceive it. Customer knowledge also allows you to tailor communications for each stage of the customer lifecycle. This will make your communications more relevant, more effective and more likely to meet business objectives. The strategy should be one that makes every marketing communication be seen as a positive experience by the customer, not a negative “interference” experience. Ensure you do this by following these key rules:
Define the commercial objectives for each stage of the customer lifecycle.
Develop a customer communication plan that reflects the customer research and meets business objectives.
Ensure research and testing is part of the strategy, to promote future development.
Make it part of a multi touch, multi channel strategy
In a connected world, where people are hooked onto the grid in multiple ways, touch points come via multiple channels. Just to take one example of a device, the smartphone can deliver a marketing message via email, web, social and SMS simultaneously. Studies have been suggesting recently that someone is likely to be watching the telly or walking round a store while access their phone, so the potential for cross media confusion abounds. Add this to multimedia spamming potential, and it makes integrated marketing communications essential for each channel’s success. Email has an important role to play in future direct marketing, with its unique strengths, it can only be effective as part of an overall cross channel strategy. Complimenting other channel activity, email often drives an uplift on other channels as well.
Taking a strategic approach to the email channel can bring lots more opportunity to the party, ultimately allowing customer knowledge to drive content, timing and targeting; nudging that little bit closer to true one to one marketing.
The Email Marketing Council’s Legal Data & Best Practice (LD&BP) hub has been reviewing the current email marketing best practices document over the past few months, and the publication of a revised version is imminent.
One of the things that the review process has identified is a need for more detailed guidance in certain key areas of the email marketing customer life cycle. For this reason, a number of supporting white papers have been produced, which can be found in the “Toolkit” section of the DMA’s website (www.dma.org.uk/toolkit), where they are available for download free to Members.
Here’s a quick summary of what has been produced to date:
Deliverability: Aimed at email program owners who have realised that their broadcasts are experiencing delivery problems, and are trying to identify why this may be the case. Looking at key factors such as sender reputation, spam filtering, blacklist operators, the document provides common-sense guidance on how to deal with them, including 10 easy-to-follow steps to improve your email deliverability.
Creative: Good creative is still an important determinant of a successful email campaign, and is sometimes the only connection a subscriber has with your brand. This document demonstrates that email creative is not a dark art requiring witchcraft and technical know-how! Rather, in non-technical language, it provides some easy-to-implement recommendations that will quickly optimise the performance of your email campaigns.
Data Analysis & Segmentation: Sets out a simple process to help email marketers start segmenting their data, and analysing their results. It defines five key areas to focus on, including: setting objectives; finding the right data; choosing the right segments; different segmentation models, and; effective use of segmentation. It also examines the best methods and approaches to implementing segmentation, as well as how best to interpret the results.
Split Testing: Provides email marketers with the basic capabilities that they will need to run split-testing activity. It looks firstly at the fundamentals that need to be in place to run a split testing program, and then examines ten prime opportunities where split testing can be introduced into any email marketing program to identify the optimal approach to maximise campaign response rates.
Triggered Campaigns: Delivering timely and relevant email messages, using trigger-based email marketing, plays an important part of email best practice. By analysing subscriber behaviour and identifying meaningful changes and/or events, organisations can communicate with their customers at a point when they are most likely to be receptive. This strengthens customer relationships by making them feel valued, and it is not unusual for trigger-based emails to attract high open rates as a result.
In addition to the documents that have been described above, there are also three new white papers whose publication is imminent:
Using 3rd Party Data For List Rental & Lead Generation
A Layman’s Guide to Email Marketing Law
Email Lifecycle Marketing
And there are a further two which are scheduled for arrival during Q1 of the New Year:
Organic List Growth
Measurement & Reporting
The production of these documents is a collaborative process and the Email Marketing Council, as the representative body of the much larger interest group, is constantly feeding in new ideas about key issues which email marketers would like to have expert guidelines for. Hopefully, the documents described in this article are servicing this need, but it would be great to have direct feedback on whether they are useful, and what the email marketing community would like to see produced next. If you have any feedback for us, then drop a line to firstname.lastname@example.org , or online via LinkedIn, Facebook or Twitter.
Guy Hanson Chairs the The Email Marketing Council’s Legal Data & Best Practice (LD&BP) hub. He is Director, Response Consulting for Return Path.