Download The Future is engagement

14
Email Engagement
Marketing
Introduction
Email marketing is hardly new - over the last 10 years or more it has become one of, if not
the most prevalent customer communication channel. Despite the increasing popularity of
email marketing its potential as a way to build customer engagement or to develop lasting
relationships remains largely unrealised.
It is often cited that email’s immediacy, interactivity, targeting capability and cost
effectiveness make it the perfect channel with which to deliver a customer engagement
strategy. So why is so much of the email we receive in our inbox still untargeted and
why aren’t more organisations using customer data to make their communications more
relevant?
This paper will consider how to create email engagement marketing, discuss the challenges
that marketers face and showcase some examples of organisations that are getting it right.
Over the last 10 years e-marketing
has become one of, if not
the most prevalent customer
communication channels
The Future is
engagement
Email marketing is best described as a
communication to deliver a message that
aims to acquire, convert, retain, grow,
reactivate or service a group of people via
email. In its broadest sense, every email
sent to a potential or current customer at
every point in the customer lifecycle could
be considered email marketing.
we’ve got the address, just send the
offer to everyone. The good news for
email marketers is that, email is still seen
as a channel that offers a good return
on investment, with 70% of company
respondents rating email as “excellent”
or “good” in terms of ROI in the recent
econsultancy email census.
Since its conception in the 90s, email
marketing has developed and grown
substantially. The UK market for email
marketing platforms and services grew
by an estimated 15.5% year-on-year
to a value of £388 million by the end of
2011 (according the Econsultancy Email
Marketing Platforms Buyer’s Guide 2012).
The future success model in email marketing
is Engagement; commonly touted as a shift
from broadcast to highly targeted emails
personalised to each recipient and attuned
to their stage in the customer lifecycle.
This uniqueness comes either from content
(customised to subscriber preferences,
data or behaviour) or timing (triggered by
subscriber data, a key life stage event or
behaviour).
While email has built a prominent role in the
marketing mix, there can be no doubt that it
is still in its infancy in terms of engagement
marketing. Sadly, many emails sent are still
referred to, and delivered as, blasts – i.e.
So why is customer engagement so important?
Lifetime value and customer engagement are intrinsically linked. An engaged customer
that is accurately targeted can be influenced to buy more; resulting in increased lifetime
value. What’s more, consumers that share their personal data expect brands to use it when
they communicate.
If an organisation is not sending relevant, timely messages it is likely that the recipient will
disengage. A customer study cites irrelevant communication as one of the key reasons that
customers choose to unsubscribe.
Organisations that continue to email disengaged customers may find their emails delivered
to junk folders or not delivered at all. This is not uncommon. Research from Return Path
shows that 1 in 13 legitimate emails sent by UK marketers go missing completely.
ISP’s are working hard to ensure that SPAM does not reach the inbox. Tools such as
Intelligent Inbox by Hotmail, Gmail and Yahoo put consumers in control by enabling them
to prioritise content and block email that they do not wish to receive. Google Priority Inbox
takes engagement one step further and prioritises email automatically based on what users
respond to. If recipients don’t engage with a sender’s emails, most likely to be those poorly
targeted, these emails are increasingly likely to be seen as SPAM. This ultimately results
in fewer messages reaching the intended recipients and increased damage to sender
reputation.
A focus on customer engagement requires a step change in thinking for many
Organisations. Email marketing has long been thought of as the tool of choice for tactical
offers and promotions rather than an integrated engagement tool that can deliver value
at every part of the customer lifecycle. However, organisations that harness the power
of customer data, create relevant content and carefully plan, integrate and automate
campaign execution can dramatically improve both deliverability and customer engagement
resulting in increased ROI.
One in 13 legitimate emails sent by UK
marketers goes missing completely*
*Source: Return Path, September 2012
Getting organisational buy-in
One of the key challenges for many marketers is changing the perception of email. A
simple way to begin to change the way an organisation views the role of email as part of its
customer communications plan is to change the metrics by which it is evaluated.
It is not uncommon for organisations to set email marketing objectives that are based
on little more than the size of the email database and its growth. There is often little
validation of how much of the database is opted-in to receive email marketing or how many
addresses have been inactive for months and even years! Changing the success measures
can change the way an organisation thinks about the role of email in achieving the wider
business objectives. This process begins by overlaying customer data with customer
behaviour in order to highlight key engagement insights such as:
How many of the high-value segment customers are opted-in
How many of them have opened an email in the last 3 months
How many haven’t opened an email in the last 12 months
What is the difference in Average Order Value and Average Frequency of
purchase of customers that are engaged vs. disengaged with your email
programme
Many also monitor success by measuring open and click through rates. If you are regularly
achieving a 20% open rate is that always the same 20%. Are the other 80% ignoring or
even receiving your emails?
Please note that the open rate is based on the loading of a linked image. Many email clients
block images by default. Therefore it may be possible to register a ‘false reading’ i.e. customers
may be reading emails without images and therefore are not tracked as opened.
Understanding these insights will help create relevant and meaningful KPIs that highlight
the true value of email marketing. That’s not to say that there isn’t a place for measuring
the size of your database and campaign open and click rates, just don’t focus on campaign
driven metrics in isolation.
Collecting the ‘right’ data drives success
Once you have analysed your email activity and set your programme objectives you
can evaluate your programme registration to ensure that it best supports your plans.
Registration is the key driver of data collection upon which your programme is built; sadly
its importance is often overlooked. Getting the basics right will ensure that you collect
quality data, and capture those essential pieces of information that allow you to derive
maximum customer insight and predict likely behaviour. For example, if your customer
analysis and profiling shows that size of family is a key driver of value, then number of
children in household may be a key variable to collect at point of registration.
Your registration process also provides the opportunity for you to communicate your
intentions - how frequently will you contact your customer or prospect and what can they
expect to receive from you. Whether your registration is a stand-alone process or part of
the sales sign-up it sets the scene for all future contact so you need to get it right. Small
changes can have a big impact on opt-in levels and therefore the effectiveness of your
programme. Some simple checks include:
Is it quick, simple and straightforward?
Don’t try to do too much at once as a lengthy process may impact on your opt-in rate
Do you need to capture address, email only, name, DOB, preferences, desired
frequency to get what you need
If you require a lot of information it may be better to provide a 2 stage sign-up process.
Potentially restrict stage 1 to just name and email thereby ensuring that you don’t lost
the vital contact information by making your process too onerous
Use data validation to ensure you collect quality data
What fields need to be mandatory and why? If you don’t use it and you can’t easily
justify it then don’t make it mandatory – why does my pizza takeaway need my date of
birth?
Registration is the key driver of
data collection upon which your
programme is built; sadly its
importance is often overlooked.
Be clear and explain what your customers can expect
What is the customer signing up to?
What can they expect to receive from you and how often will you communicate? This is
important as it will optimise frequency levels based on customer expectations
Have you collected explicit consent for everything that you intend to send? Don’t state
that you will only contact customers about their contract only later to email them with
unrelated products and services
Make it compelling
Why are they signing up – what’s in it for your customer? What will the customer miss
out on if they don’t receiveyour emails? Can you provide exclusive content or offers for
registered customers?
Streamlining your registration process will ensure that you are maximising the opportunity
to grow your email database, and setting customer expectations of how you intend to use
the data so there are no surprises.
Use data to drive long term value
Data quality is the single most important barrier to effective email marketing. Data not
only influences targeting and segmentation, it can also determine your content (by using
dynamic images and copy), optimises your frequency, triggers campaign timings and
impacts on your deliverability making it the constant that influences and underpins five of
the top ten barriers cited in the 2012 EConsultancy Email Census.
A key way that data can be used to drive regular and engaging (i.e. non blast) emails is
to segment communications. Understanding customer behaviour and segmenting your
email engagement programme improves targeting strategy and will of course bring better
results, often producing high two- or three-digit increases in key metrics. For example,
segmentation based on past purchases led to a more than fivefold increase in revenue per
campaign for one UK Retailer Whittard of Chelsea (see case study on page 13).
Ideally your segmentation should use both transactional data to understand the recency,
frequency and value of purchase and engagement data to understand the recency and
frequency of customer email engagement, website activity and social media interaction.
The combination of the two will provide a fully rounded view of your customer’s behaviour
and will help inform your data planning strategy.
For example, if you know that a customer who hasn’t purchased in 24 months is actively
viewing your emails and visiting your website you may wish to continue emailing them
as they have the potential to buy again in the future. Using transactional RFV insight in
isolation would most probably have resulted in you no longer marketing to this lapsed
segment.
Identifying disengaged and highly engaged individuals, and using this insight together
with buying behaviour can also help to predict and influence future behaviour. For example
tracking engagement enables customers ‘at risk’ of becoming disengaged to be targeted
with re-engagement strategies before they defect.
Not only does data inform your targeting strategy and identify who to email, with what
and when, it can also dynamically deliver the content enabling complex segmentations to
be easily implemented. Dynamically driven content both within an email and on the web
page that the customer is sent to can significantly enhance response rates. Content can
be tailored based on previous customer behaviour such as purchase history, spend, pages
visited etc. Using this engagement data dramatically increases relevance.
With all the obvious benefits of a data driven
engagement approach why are so many
companies not harnessing the valuable data
they hold?
The most common challenge for marketers is the difficulty in bringing together disparate
sources of data such as website data , email, mobile, offline, CRM, social etc. to create a
joined up view of the customer. Building a single customer view enables true multichannel
marketing to be implemented and connects the dots between an individual and their
behaviours and engagement. In the recent EConsultancy Email Marketing Census 2012
almost half of companies surveyed cited disconnected systems/technologies as the single
biggest barrier to effective integration.
Whilst a single customer view is often the desired CRM vision, marketers shouldn’t put
engagement marketing on hold waiting for large scale technology change. Much can be
achieved working with an organisations’ existing systems and data structures. For example
it is usually possible to identify the key data sources that are most likely to drive value
and create a simple aggregated data view for marketing purposes in a relatively short
timeframe. Although neither real time nor fully integrated it does enable low cost, joined up
marketing and is vastly preferable to siloed channel activity.
Automating email
engagement
As the data we collate on our customers
continues to grow at a rapid rate many
marketers are finding that the most effective
way to make use of this data is to automate
their campaign activity.
Organisations that automate email
engagement typically deliver better
customer experiences and improved
conversion rates. Automated campaigns are
often referred to as ‘triggered’ campaigns
as many are driven by customer behaviour.
A trigger can be a customer action or
response; an event like a birthday, a website
visit, or an online purchase. When certain
criteria are met in the data, emails are
automatically triggered to the qualifying
individuals.
Data insight not only drives targeting and
content but it can also drive timing. For
example, send times can be customised
for each subscriber based on when they
opened previous emails or when emails are
triggered by basket abandonment, website
visit or subscriber birthday. A triggered
email campaign may feature generic content
(like a welcome message) but is still highly
targeted.
Organisations that
automate email
engagement typically
deliver better customer
experiences and improved
conversion rates
An example of a triggered welcome programme might include:
A welcome email is sent when an individual purchases and signs up to
the loyalty scheme
A benefits reminder is sent when the customer activates their loyalty
card
An incentive is sent to customers that have not placed a 2nd purchase
after 6 weeks
A customer satisfaction survey is sent to those who’ve shopped within
the last week. Creative is driven by the spend category and value
An incentive, the type and value of which is determined by first purchase
value segment, is sent to those who’ve not engaged with email in a given
time (timeframe determined by segment)
After 12 weeks if they don’t engage, they receive an option to remove
themselves from the mailing list or update their preferences to ensure
content is relevant
All of these communications can be automated so that no manual intervention is required
to action any stage of the programme. This is often referred to as lights out marketing
automation. The real benefit of this style of campaign is that it creates a path that is
relevant to any individual as the content and timing of each communication are completely
driven by the customer’s actions. The email volume sent out each time could be as low as
one if that is the only customer meeting selected criteria that day.
One thing to bear in mind here is that while automation, and triggered campaigns save time,
create engagement and require less manual input, it is important to monitor frequency and
volume of emails sent. The most effective programme will include a fine balance of tactical
and triggered activity to maximise customer value.
Determine the communication frequency
There are no set rules on how much is too much when it comes to email frequency, every
brand is different. Acceptable frequency thresholds are more likely to be related to the value
delivered in the email the relevance of the communication and the strength of the wider
relationship between sender and recipient.
A clearly defined opt-in registration process will help to set customer expectations and the
basic parameters for your programme. The ongoing measurement of engagement levels will
provide an indicator of how committed customers are to your brand; the more committed a
customer is the more likely it is that they will be happy to accept a higher frequency level.
As previously mentioned it is important that levels are aligned to the customer value
segmentation. Reducing frequency because someone hasn’t opened or clicked recently
may not be the right course of action if they are, for example, still purchasing regularly.
Segmentation and targeting will also raise the value of the emails to the recipient, in turn
lifting the acceptable frequency threshold.
Measurement
There are many measures that can be used to evaluate the success of your email
engagement programme. Most email campaign tools provide an array of web based realtime charts and graphs that enable you to monitor email performance 24 hours a day.
The benefit of this is that anything that doesn’t work can be altered and modified as soon
as possible. By tracking open and click-through rates by segment or individual if needed,
we can see very easily what is working and what is not. Content can be altered very quickly
to change a test or drop out an offer that is getting no traction.
However most email tools focus on campaign metrics such as open rates, click-throughs,
unsubscribes etc. Although these metrics are valuable it is important not to solely focus on
campaign process metrics as an improvement in these will not automatically impact the
bottom line i.e. improved open rate does not always equate to improved revenue. Thus the
most important metrics are those that are aligned to the business objectives.
Typical measures include:
Value and Conversion metrics such as the cost of email acquisition,
average order size, value and number of orders or campaign ROI
CRM Metrics which typically measure the number and growth of optedin customers and level of unsubscribes
Engagement metrics such as conversion by value segment, growth in
average number of emails an individual opens and clicks, number of
social shares and recommendations
Deliverability measures such as bounce rate and spam complaints
Conclusion
First Principles
in Action
Whittard of
Chelsea:
Challenge
•
•
Plan and execute a series of email
campaigns to maximise sales during
the Christmas shopping period
Encourage and develop beneficial
behaviours
Solution
•
•
•
Analysed customer sales data – RFV
segmentation
Identified potential for three multiwave campaigns; encouraging cross
category participation, a stretch
in spend and re-activation of disengaged customers
Set messages, designed and built
emails and built bespoke reports to
enable campaign measurement
Results
•
•
•
Open rates increased by 192%
Average order value grew by 16%
Sales forecasts were exceeded by
over 200%
“Through analysis of our transactional
data Response One identified specific
customer groups and propositions
to test with email communications.
We were really happy with the results
...Overall, the campaign beat our
agreed sales objectives by over 200%!
Response One were able to deliver this
within the tight timescales and pressures
of the busiest time of year”.
Helen Smith, Whittard of Chelsea
PruHealth
Challenge
•
PruHealth were experiencing
large volumes of consumers
going online who never went on
to purchase. These hot leads
were being lost, with no means
by which to follow them up
Solution
Building a multi-channel integrated
solution
• Response One set up an email
solution which triggers follow
up personalised messages and
enables the recipient to book a
call-back
Using insight to prioritise leads
• Response One use the available
data to prioritise enquirers based
on their potential to convert and
provide this in a daily, automated
feed to the call centre enabling
their advisors to prioritise the
hottest leads.
Results
•
•
Engagement from the
programme in excess of 40%
Conversion uplift of 54%
compared to those who did not
receive an email
“Your pro-activity on this project
shows once again your professional
approach to business and the true
impact you have with us as business
partners.”
Chrissy Fice: PruHealth
Staples
Challenge
•
To use data segmentation and engagement insights to deliver relevant and timely
communications
Solution
•
•
Behavioural segmentation was used to identify key strategies and create business rules
Email, SMS, and Digital Direct Mail automatically triggered at key stages in the
customer lifecycle and based on individuals engagement and propensity to act
Results
•
Trigger driven email broadcasts are outperform ‘standard’ broadcasts by up to 38% in
terms of open, click & CTO rate
AMANDA HARRIS
Deputy Managing Director
Response One
Amanda Harris is Deputy Managing Director of Response One, the strategic data driven
marketing solutions arm of the St Ives Group. With over a decade of specialist experience
in marketing and sales, Amanda honed her skills with market leading organisations
including RAC, Mail Marketing, EHS Brann and The Database Group.
During her time as Client Services Director at The Database Group, she worked with a
range of clients, successfully revitalising their data-driven marketing strategies.
Amanda holds a key role on Response One’s executive board, overseeing the Direct
Solutions division which provides a range of data driven solutions. Amanda’s specialisms
include Database Management, Customer Engagement, Business Intelligence and Digital
Marketing. Her focus is on delivering real solutions that are accountable, scalable and
deliver measurable results, helping clients such as Staples, Sue Ryder Care, National Trust
and PruHealth extract real value from their data.
About St Ives Group
St Ives Group supports the businesses they work with to assess, understand and
influence consumer behaviour across a range of sectors including publishing, retail
and financial services.
As experts in innovation and execution, we are the marketing solutions business
for an industry that is evolving to satisfy consumers whose attitudes towards
marketing communications are shifting.
We have invested heavily in data and insight businesses to complement our
expertise in cross-media execution solutions and will continue with this expansion
programme.
From unrivalled consumer insight and analytics to expert multi-channel execution
– and with sector-leading clients including Sainsbury’s, HSBC, Jaguar Land Rover
and Heinz to prove it – St Ives Group allows our clients to identify, communicate
with and engage their consumers.