Email Marketing Grows Up Thanks To List Segmentation

Craig Kerr_2.JPGBy Craig Kerr, VP of Marketing at iPost, an email marketing services company
The carefree days of email marketing’s youth were spent blasting emails to as many people as possible. What a party that was – sort of a combination of pledge week and Spring Break. Email was and is cheap to send. And in the past, email campaigns just seemed to make money, no matter how poor the methodology, and that sure looked good compared to the other marketing channels.
But, just like those fresh off Spring Break kids who must suddenly contemplate life after college, email marketers in 2009 should be considering a more practical and, dare we say it, sound business approach if they want to continue receiving a paycheck. Let’s take a look at why – now, more than ever – you should segment your email list, protect against opt-outs and spam complaints, and which segmentation approach is the most practical.
Why should you segment? To avoid disaster
We don’t live in a one size fits all world. Different groups or segments of customers have different needs, buying patterns, and preferences for how and how often they want to interact with a company.
Relevancy is crucial. If you blast emails constantly to someone for a product category that they’re not interested in, they will likely opt-out or flag your brand as a spammer. Bombarding customers, who are not engaged with your brand or who want only occasional contact, with email after email will not convince them to buy your product. Bombardment – no matter how nice the creative – will more likely cause customers to take negative actions, like report you as a spammer or opt-out.

Why should you be especially worried about opt-outs and spam complaints in 2009?
Email is cheap but opt-outs and having your email identified as spam are expensive. Those are the real costs of email marketing. You can calculate the cost of an opt-out by the lifetime value of the customer. When customers report you as a spammer to an Internet Service Provider (ISP), you may find your emails end up in the spam filter and not the inbox. No matter how cheap email is to send, it is a waste of money if the customer never even knows you’ve sent it to them, or has the chance to read it.
Segmenting your list will reap rewards
The upside of segmentation is tremendous. More relevant and timely offers to your customers will yield greater revenue and profitability. Segmentation, if done right, also avoids many of the pitfalls of blasts. Effective segmentation will result in fewer opt-outs and improve your email reputation thus helping your email delivery.

What segmentation approach is most practical?

Avoid either end of the segmentation spectrum – blasting or micro segmentation (taking an infinite number of segmentation whacks at the list).
Instead, take a deep breath, relax and develop broader, manageable segments. For example: purchasers vs. non-purchasers; current customers, past customers and prospects; high, medium and low engagement with your brand, etc. If at all possible, add multi-channel data into the mix. Purchase data is especially important because your segmentation goal should be tied to a financial metric not just increased activity.
Like binge drinking, binge emailing can have disastrous consequences. However, start implementing practical segmentation and you will find email marketing to be both effective and profitable.

One thought on “Email Marketing Grows Up Thanks To List Segmentation

  1. Ken Ralston

    I suppose segmentation could be quite useful.
    What I am wondering though, is when the various email servers are going to start offering a ‘trikle’ feed option for mailings. For example, I would like to be able to mail out my newsletter a little each day. (1/30th of the list per day for a 30 day month, for example, or even 1/4 per week.)
    This would spread out the orders over the course of the month but more importantly smooth out the demand for my on demand videos.

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