This week we move on from email marketing strategy to an area of huge importance to the success of an email marketing programme - segmentation.
Segmentation is the method by which we craft information that is tailored and delivered to a specific target audience or group. So why is it important now?
In the past many direct marketers were satisfied with traditional spray and pray tactics; however these practices have led to a "customer engagement crisis" which has devalued email marketing as a means of communicating product or service value.
In addition, marketers are also faced with the challenge posed by changing customer behaviour - information is now absorbed and consumed dynamically through multiple, fragmented channels instantaneously. The "Relevancy Group" referred to this as a "short-burst society"*. Below are some features:
- Of the 500 million Facebook users , 250 million quickly apply short status updates every day
- The time we spend reading emails on our personal computer is declining, whereas the time we spend on mobile devices is increasing
- Over 230 million Americans pay for short messaging/texting plans each month, furthering the notion of the burst
- 105 million people burst in 140 letters on Twitter, with 300,000 signing up every day
This combination of poor practice and changing customer behaviour has required companies to up their game and become more sophisticated through personalisation and segmentation. This involves more than just capturing an email address on subscription. The more information collected, the greater chance you have of segmenting and personalising your emails with content relevant to each subscriber group.
However this is challenging. More than three quarters of email marketers claim to use segmentation, however these tend to be basic techniques (87% of marketers capture basic contact information on subscription, but only 28% go on to capture demographic data (age, gender, location etc))**. So based on this, it appears that a majority of marketers are failing to capture the sort of information that enables more sophisticated segmentation.
While the process admittedly does require a significant amount of effort, it is clear from all best-practice in email marketing that there is a corresponding increase in the level of effectiveness (see graphic below). The major reason for the reluctance to pursue this further, is that marketers can get overwhelmed by the multiple information sources. They simply don't know where to start. Furthermore there is the temptation of instant gratification by sending a bulk blast to generate ROI as quickly as possible, which is the wrong approach.
In this series of blogs we will focus on a process that should allow marketers to approach segmentation logically and easily, thereby getting the very most from your email marketing campaigns.
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*The Relevancy Group describes "The Short Burst Society" as a life stage and lifestyle segment of our worldwide population that knows no boundaries. It cannot simply be defined by demographic, social-economic differences, although there are some concentrations within these pods. "SBS" is an attitudinal and behavioural distinction that applies when one consumes and responds to information across a variety of digital devices, in the spoken word, or in a writing, that is extremely succinct. Visit http://ShortBurstSociety.com for additional information.
**MarketingSherpa 2010 Email Marketing Benchmark Report