How to Segment Your E-mail Marketing
By Mille Park, account director, E-Dialog

E-mail marketers must achieve relevance in their campaigns to increase productivity and increase customer engagement. Hopefully, you're already segmenting based on behavioral data garnered from your e-mail programs. And with little effort you can ascertain demographic and psychographic data to gain further insight into your customer segments and what's most relevant to them.

Whether taking a basic approach or performing extensive data gathering and analysis, there's a core set of fundamental segmentations that drive relevance and consistently outperform across the most successful e-mail marketing programs.

E-mail behavior
By leveraging the behavioral data collected from your e-mail programs, you can design campaigns with greater relevance to your targets and generate a higher number of clicks. Opens are the first step in reaching your audience, but clicks tie closer to conversions and ultimately drive higher response.

For example, based upon a simple analysis of data you already have, you could see that a target recently opened special offers on golf bags and personalized golf balls. By this, you can deduce he's interested in golf and target him for relevant sales and promotions.

If he doesn't make a purchase after opening your first message, segment him into the opener category and follow up with a compelling subject line to drive a spontaneous purchase. For those falling into the non-opener category, change the subject line to create a sense of urgency: Don't miss out: rock bottom prices on golf clubs. This can be the difference between capturing a purchase and missing an opportunity.

Purchasing behavior
Of course, customers with the highest recency, frequency and monetary (RFM) numbers should be marketed to in a distinct way. But segmenting by one element alone can increase hit rates. For example, if you have a customer who makes a purchase every three months, you should market to her near the end of this cycle, offering discounts to entice her to not only buy again, but possibly increase spending.

Purchase category
You already know what customers have purchased in the past, so from this you can deduce what may interest them in the future. In the case of the golf enthusiast, if he purchased a golf bag and clubs three months ago, you could follow up with an e-mail promotion for a week-long savings on golf attire. This simple strategy can have tremendous returns if executed well.

Preference center and survey data
Preference center data and/or data obtained from surveys is infrequently used or leveraged to its fullest, yet it can serve as a strong basis for customizing programs and improving e-mail relevancy. You may already have a preference center set up on your Web site, particularly if you produce a newsletter. Through the center your target audience is already telling you how best to reach out to them – accept this gift and run with it. Also, take advantage of the fact that centers and surveys provide opportunities to send targets regular correspondence urging them to update their preferences.

Demographic or psychographic data
You may not already be tracking information as detailed as a customer's gender. But you can easily glean it from other data you've collected, directly ask customers for it or purchase it. For example, results from a brief survey asking a customer for his ZIP Code™ can enable you to segment him by geographic location and gain insight into what's most relevant to him. For example, if he lives in the Pacific Northwest, you can presume that he needs rain gear and offer him special discounts on raincoats.

You don't need complex customer models and sophisticated publishing grids to effectively segment customers. Small incremental changes such as tailoring subject lines can have a big impact on the relevance of your e-mail marketing and your bottom line. If you aren't already segmenting your targets, you should be. If you are, then is your approach more complicated that it has to be? Consider these fundamentals as a checklist for not only jump-starting segmentation activity, but evaluating your existing programs.

---Source: Multichannel Merchant List & Data Strategies September 2, 2008 (www.multichannelmerchant.com). Millie Park is an account director with e-Dialog.