The Actionable Data Insights Series. Part 1 of 4 Using your data to create connections with your consumers. In the first of our Actionable Data Insights series we show how you can use find actionable insights in your data to help you engage better with your consumer. The Data Challenge Email is still the #1 channel through which consumers want to receive promotions from brands; 83% say it’s their preferred method of communication (The Email Addiction Research report – Zettasphere & Emailmonday). But through this channel consumers now want to receive messaging that is personalised, relevant and helpful and this all starts with collecting the right data and having a deep understanding of it. But with the massive amount of data we have available to us, sometimes it’s hard to know where to start and how to actually disseminate what is valuable to our business, let alone get all of that data together into the coveted Single Customer View (SCV). Only 47% of marketers say they have a completely unified view of customer data. With data quality issues, missing pieces and sources, silos and a lack of integration between systems, creating that SCV is harder than ever. (Source: DMA) But when we do resolve these challenges, we often see very positive results – plus its what’s expected of us nowadays. Post GDPR, consumers are much more aware of what data we are collecting and that they give us permission to use. And when they do provide their data, they expect it to be used to make their interaction with you easier, faster and more personalised. Personalisation: From desire to expectation The desire for personalisation is morphing into expectation… 57% are willing to share their personal data in exchange for personalised offers and discounts, 52% for product recommendations and 53% for personalised shopping experiences. (Source: Salesforce). 62% of consumers expect companies to send personalised offers or discounts based on items they’ve already purchased. 64% of consumers expect companies to provide an individual experience As marketers, we often struggle to bring our data, knowledge and resources together to provide this kind of personalisation. The recent DMA 2019 Marketer Tracker Report showed that only 14% of consumers think that over half of the emails an organisation sends are relevant to them as individuals. But maybe more shockingly, only 55% of marketers think that more than half of all the emails they send are relevant. There is a disconnect that we need to address… So why aren’t we sending more relevant, useful emails to better engage our prospects and customers, and more successfully lead them through to the next stage in their journey with our brand and ultimately enable more conversions? One of the possible reasons for this is also illustrated in the DMA report; there is a clear difference between what we as marketers THINK consumers want, vs. what they ACTUALLY want… Truly understanding what your subscribers want from you that will help, excite and engage them, starts with having the right data (in the right place in your business so that it can be used in the most productive way). And then of course, knowing how to best use this data for your business. Once you have the right data in place (or are moving in that direction), it is vital that you start using that data to its maximum advantage. We need to continue to move from a batch and blast send-the-same-message-to-everyone strategy to a segmented 1-2-1 personalised communication plan in order to achieve relevancy at an individual level and help us meet our business objectives. (Source: Salesforce, 5th state of Marketing research). We Need to Get Smarter with Our Segmentation To achieve a connection with your subscribers you have to start by understanding who they are, what their individual needs are and how you identify them in your database. This is where smart segmentation comes into your strategy. 39% of email marketers that practice list segmentation see better open rates, 28% see lower opt-out and unsubscribe rates, and 24% see better email deliverability, increased sales leads, and greater revenue. (Source: eMarketer). There are two ways to achieve this: 1. Group segmentation… …finding similarities between groups of your subscribers and serving relevant content to them based on these similar attributes. Ask yourself questions such as… What are the characteristics of your subscribers? What makes them similar? What makes them different? Do different customers use different channels? Do different types of customers engage with you in different ways? Do different subscribers have different needs? Identify segments within your database Completing a data audit will help you to identify what data you have and where the similarities in your audience may lie therein. The list of segments you could create is infinite and completely dependent on your business, but could include those that fall into some of the following areas: Geographic location – e.g. if you want to advertise a live event only to people in a certain area. Device usage – e.g. if you have an Apple App but not an Android app, you’ll only want to promote it to those using an Apple device. Email engagement – those who are less engaged or disengaged could be sent a reactivation campaign to reengage them with your messaging which may include special offers and content (or even removed from your database). Loyalty level – e.g. to reward your top loyalty programme customers with special content. Age – e.g. to be able to send age appropriate content or offers, products, imagery or terminology. Interests – target those in your audience with specific interests only. Type of buyer – e.g. are they a one-time buyer or repeat purchaser? Do they only buy at Christmas time of all through the year? Do they always buy a specific category of products? Here you could also go one step further and conduct RFM Analysis. This is a technique that looks at the Recency of a customer’s last purchase from you, how Frequently they buy, and the Monetary value of their purchases. Bringing these three data points together allows you to automatically assign a score to your customers based on each of these three elements relating to their past purchasing habits, resulting in a series of segments being identified that surfaces your very best customers (VIPs that frequently buy from you, have done recently and spend the most money), all the way through to those who have never bought from you before, and everyone in between. Of course, this analysis replies on having your purchase data fully integrated into your ESP in order to identify people based on these elements. If you’re a content provider and don’t have purchase data, you could simply substitute the typical RFM values for other data that makes sense to your business. For example: Recency of last download Frequency of downloads Total number of downloads By identifying these different segment groups, you can recognise the different needs and messaging strategies required for each; from those who are most likely to buy from you again, to those who need more nurturing and have already, or are at risk of, going inactive with your brand. Champions – These subscribers are often your early adopters for new products and will be your most loyal, frequent and high value purchasers. They are also the most likely to promote your brand, so make sure you nurture them and help them become brand advocates. Also think about the offers you present to them wisely: you probably won’t want to offer them the same discounts as new subscribers as they’re already buying from you, but you do want to reward their loyalty in some way. You probably don’t need to target them with social media ads for example (as part of your omni channel strategy), as they are most likely to buy again anyway and don’t need this additional budget spending to entice them back. You would want to notify them of more high-end products (as they are spending the most – of course you could layer RFM with AOV to segment this group even further for these purposes). Loyal – They buy from you frequently and have done recently but don’t spend quite as much as your Champions do. They are probably quite responsive to promotions and like to be rewarded. Consider campaigns to increase their AOV, make them feel valued and part of your brand family, in order to keep them coming back and become advocates. Recent – These subscribers bought from you recently but they don’t often buy and don’t spend a huge amount when they do. Encourage them to come back more frequently, offer them a membership or loyalty programme to encourage this behaviour and recommend other products / services / content they might like. Create more brand awareness and get them bought in to your ethos to gain loyalty. High Potential – They bought from you recently and spent a lot but don’t often come back. Nurture them whilst they are still warm from their last purchase – offer them relevant upsells/cross sells of related products / services, nurture them with helpful and inspirational content and keep them engaged. If they don’t buy again within a defined period, consider adding an incentive to increase their frequency of purchase and advertise your loyalty programme (if applicable). Need Nurturing – Although they have not bought from you recently, they usually buy frequently, and when they do, they spend a high amount! These subscribers are often enticed by recommended products / services / content and popular products. Look at when these subscribers purchased – are they Christmas only buyers for example? If so, they have a different buying behaviour from your general buyers that need to be addressed. At Risk – those who don’t spend much and haven’t bought recently but do usually buy frequently. Test different discount levels and offers to entice them back, share valuable content to inspire them. Try and connect with them through other marketing channels too such as social media to keep the conversation going. Do Not Lose – They haven’t bought recently and don’t buy frequently but when they do, they spend big! These are the subscribers that you don’t want to lose and want to make sure they don’t go over to your competition – talk to them, offer them the newest and most popular products and consider enticing them with limited time offers Lost – These subscribers have the lowest recency, frequency and monetary scores – try to reactivate them with free trial periods, renewal discounts and engaging content. Retarget them through other channels to get their attention, but if they don’t reactivate after a set period of time, cut your losses and consider removing them from your main campaigns. Prospect – These are new subscribers who don’t have any purchase history with you yet. Welcome them and nurture them through to their first purchase with you – tell them why they should trust your brand, what you offer that’s different, entice them with popular products and consider free trial periods, introductory discounts and other ways to encourage them to make a first purchase. This type of segmentation also allows you to ensure you are not over mailing to a particular type of customer and that the right offers and messaging strategies are being directed at the most in need customer sets; prioritising revenue generation. When increasing the complexity and depth of your segmentation, you will start layering different groups together. So here for example, you could layer email engagement, their place in the customer journey (we’ll discuss this in the next section) and your RFM analysis to further personalise your messaging to their current situation; this is called eRFM analysis. Conduct a SWOT Analysis to Identify New Segmentation Areas SWOT Analysis is commonly used to evaluate internal and external threats and opportunities for a business, but can be a really useful tool to help identify the same in specific areas of your email marketing strategy; in this case your segmentation. By completing these four fields specifically thinking about your current segmentation strategy (along with a full understanding of your current data pyramid), you can start to identify areas that can be filled with new segments for your business, as well as being aware of any potential negative effects of these (weaknesses). It will also give you an analysis of where you are now and what you’re doing well in order to replicate this success in other areas. TASK: Conduct a SWOT Analysis of your current situation in order to help surface areas of weakness that could be plugged with new segments. Find the segments that matter to your business When deciding on your segments to target, you need to evaluate not just whether you have the data available to actually find those people in your database, but also whether it’s worth it to your business to do so: When it comes to working out the value of a potential segment to your business, before you create it and planning campaigns to target it, think about the following questions: What is the criteria size? Is the market large enough to justify segmenting it? Is there enough of a difference? Are there measurable differences that exist between your segments? Will it make you money? Are the anticipated profits higher than the costs of additional marketing plans and other changes you may need to make? Are the segments accessible? Is each segment accessible to your team and able to receive your marketing messages (e.g. do you have consent from that segment to send marketing?) Is your strategy driven by the customer? Do the different segments you are planning to target have different needs in terms of what will be of most benefit for them to hear about from you? Create a segmentation matrix to help evaluate your choices We often find it useful to visualise the segments we are considering creating to see where they fit, in terms of their cost vs. benefit to our business; this can be done in the form of a matric grid. The X and Y axis can be anything you choose but must lead you to find the segments of most value in the upper right corner of the grid (for your business). For example: Persona segmentation – understand WHO your audience are To create a targeted, engaged email list full of subscribers who are more likely to buy from you, you need to attract the right kind of people onto your list and understand how to communicate with them effectively – the imagery they’ll connect with, terminology they use and the offers that will appeal to them. The first and most important step in doing this is to create Customer Personas (also called Avatars). A Customer Persona is a semi-fictional representation of our customers based on their behaviour, demographics and habits. They allow you to better understand who your customers are, where are they in their journey, how they like to be contacted and what interests them, to allow you to better target them and grab their attention in a competitive environment. If you don’t know who your target audience is and what makes them tick, the conversions to opt in that you see from your sign-up forms, and to purchase from your email campaigns, won’t be maximised, because the content you provide and how you communicate with them won’t resonate properly. In order to gain maximum conversions for minimum budget, you need to speak to just one type of person at a time with your messaging. In any business you may have multiple customer types that you are targeting. It’s important to understand and distinguish between these when it comes to providing the right information to move them through their journey. Think of it this way… You’re a pizza company; most people like pizza. So, you could consider that you are marketing your products to everyone. But in reality, although the products you’re marketing are the same, the types of people and what they need to hear about the benefits of your product, the imagery they will respond to, the timing of the messages and the tone may be different. For example, let’s look at 3 possible personas for this business: If you think back to the pizza adverts you’ve seen over the last few years… you can probably think of examples of each of these different types of ad, all promoting the same product, pizza, from the same company but in a slightly different way changing the imagery, messaging and timing. Creating your customer personas (Source: Hubspot) In order to create effective customer personas, you need to use different types of quantitative data and your qualitative data to draw a picture of who the types of people are in your audience. From this you can start to create a profile for each of them and build up a visual representation so that you can better target them with your marketing. This is one of the hardest segmentation strategies to implement as it draws on multiple pieces of data to identify each persona; many of which you may not already be collecting. 2. 1-2-1 segmentation… …this is true personalisation at a 1-2-1 scale, serving up content and products that are unique to that person alone sent at the right time, to help them progress in their journey with you. This could be based on a multitude of different data such as what they have most previously browsed on your website, interacted with in your email content or previously purchased. If we are collecting their data and not providing a personalised experience, we are letting them down and leaving possible revenue and the ability to increase our brand sentiment, on the table. Your customers and prospects want… relevant offers to be remembered to feel listened to & understood to be in control By personalising our content with information/product/service recommendations relevant to what they have done previously, images that call out something that relates to them or send at a time that better serves their current need, we can build relationships and have a much better chance of encouraging our desired outcome. When it comes to starting with segmentation, many marketers use dynamic fields to insert pieces of data such as first name, company name or the name of the product the subscriber last purchased, for example. And this is a great place to start if you’re not doing any personalisation at the moment – it brings your content into a real-life context for the recipient and starts to make a connection with them. But, for most of you reading, you’re probably doing something similar to that already and you want to take your efforts to the next level. The way to do this is to serve up unique combinations of content dynamically into your creatives based on their individual data, customer persona and position in the customer lifecycle. Conclusion Data: The oil of the digital age. Outside of the Oil and Gas industries, some of the largest companies in the world (including Walmart, Amazon and Apple) are now founded on data. Data is at the heart of all successful marketing programmes; telling us what’s working, what’s not and what we need to do next. And in email marketing that’s no different. If it’s in your database you can use it to track, segment and target your customers in ways we haven’t been able to in previous years, to provide a much more seamless experience across channels. As with anything worth doing, increasing your personalisation strategy takes time; but if we don’t start now, the time is still going to pass by and we’ll still be in the same position tomorrow as we are today. In fact, you’ll be in a worse position because as consumer attitudes change and competitors provide a more personalised approach, you’ll lose those customers to them over time. You need to be at the forefront of the change and the one to benefit from the positive returns! It’s not easy though. Some of the most effective types of personalised and high performing emails are the hardest to implement of course. But, by using your data wisely you can understand who your customers and prospects are, how to target them and when for maximum impact. We have a wide range of guides, useful templates and content coming up in our Actionable Data Insights Series, so watch this space. In the meantime see how our all-in-one AI Marketing Platform can take your email marketing to the next level, with a 30-day free trial.