What's in a Name: From Lists To Segmentation

by Phil Leggiere, Oct 1, 2008, 3:15 PM

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For decades database direct marketers have seen "lists" as their primary currency and source of wealth. In the conversation below, Ryan Deutsch, director of strategic services at StrongMail, explains that while lists are a necessary resource, email marketers need to understand that their true wealth resides in segments.

Behavioral Insider: Email, though it's been with us all along, seems to have taken on a new prominence with the economic downturn. What do you see as the source of its resilience -- and how are new trends in email converging with advances in targeting?

Ryan Deutsch: Email, though it was easy for a long time to overlook, or just take for granted, is the most common currency of online communications and transactions. More marketers are slowly coming to the realization, or the re-realization, that email is the common touch-point that can act as the connective thread of other channels.

This marks a pretty radical departure from what I call the "old school" in email, the traditional paradigm of batch and blast emails, of email as a siloed channel, where you send out a single message to a massive database. Over the past few years, there have been steady attempts to tie email marketing into wider databases to segment customers and tailor messaging by various criteria, ranging from demographic profiles to geo-targeting.

BI: Is there an increasingly behavioral component?

Deutsch: Where we see the most exciting prospect emerging is in tying back-end analytics to email messaging so that communications can be targeted to real-time behaviors. The simplest example would be making shopping cart abandonment data available in real-time so that an email follow-up can be delivered with a highly relevant offer for products a consumer is in market for.

There are other critical triggers. One of the most important is what we call life-cycle triggers. Marketers are looking at leveraging their data about customers to use opportunities like welcome emails, for instance, to initiate personalized messages, or anniversary occasions. Another great opportunity is warranty renewals. Those kinds of occasions need not be seen only as perfunctory kinds of communication -- but rather as critical marketing opportunities to both renew and deepen relationships.

BI: How does Strong Mail think about integrating analytics and email?

Deutsch: There's a two-step process in integrating analytics fully. First, what you know about a consumer from your database. That includes all their subscription information, their purchase history. But beyond this, there's an enormous quantity of clickstream data about what a consumer does. This is data that is mostly still siloed, but can be actively and dynamically related to who you already know they are.

What underlies this change is the shift from thinking about email as online "direct mail" to understanding and acting on new ways of leveraging the transactional message stream.

BI: Could you elaborate on your distinction between direct email and transactional?

Deutsch: Transactional emails up until very recently were just boring, humdrum plain text. But when you think of it, transactional communications are the perfect time to strengthen relationships with consumers. Research shows us that when you're in touch about things like confirming an order or a shipment, you've got heightened interest on the part of consumers. They have a stake in the communications and that's reflected in much higher open rates versus standard direct emails. Yet this channel has been largely underutilized.

BI: Any examples that can illustrate how that might work?

Deutsch: A good example is the work with Wet Paint, a wiki development network. They had always, as a matter of course, sent out an alert note telling wiki developers they had gained X number of members that week. But rather than just send that, they have learned to use this transactional mail as an opportunity to offer enhanced features. For instance, they provide a link within the email to give developers a welcome email they can send to new members or provide a survey to new members. Instead of just 'maintenance' messaging, Wet Paint used them for engaging members more deeply.

BI: What new refinements or iterations are you looking at going forward?

Deutsch: Going forward, I think the key thing we need to remember is that as critical a conduit as email is right now as a touch point, the nature of what we're doing is targeted messaging. Over time, the kinds of messaging may change. We see a lot of potential, for instance, for mobile alerts -- and further down the line, mobile marketing. The platforms change, but the core challenges don't. It all comes down to how marketers think about what really resides in their database. The realization among savvy email marketers is that what they have in their databases are not 'lists' but dynamic segments.

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