Commentary

Better Email Personalization Drives Better Bottom Line

Email marketing has always delivered strong ROI (if not the highest across marketing channels).  But if you follow the trend line, while still surpassing other channels, ROI from email has actually decreased over time. The DMA estimated a $57.25 return for every $1 spent in email marketing in 2005,  which is much higher than its $38 figure in 2015.

This should be a wake-up call to email marketers everywhere. 

Here’s why. One reason ROI has gone down is that email marketers often view it as a “free” channel. They don’t always devote as much time and attention to measuring email performance over time, because the CPM (cost per thousand emails) is far lower than other more expensive channels, like display advertising.  And short-term measurement of the channel often shows that sending batch-and-blast emails to the masses will deliver short-term revenue gains. 

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Another issue is that marketers have basically trained consumers to use email as a discount channel. For example, I get emails from Bath & Body Works every single day (I kid you not) with subject lines like “final hours for 3 free body care + 20% off,” “TODAY ONLY. $5.50. go, go, go!” and “2 FREE gifts today only!” 

If your brand’s immediate goal is to drive incremental revenue, throwing out coupons like this to everyone on your list might work. But what if you knew which subset of your consumers would transact without the coupon and just needed a reminder of your superior product or recommendations based on past purchases? 

As consumers get used to more personalized experiences through companies like Netflix and Spotify, they're expecting a deeper level of personalization in their interactions with all brands. When you bombard consumers with emails that are only looking to strike a deal, you aren’t building a true relationship with them. You’re priming them to look for the best deal possible, competing on price alone. Eventually consumers will tune you out. 

Machine learning can help you truly get more personalized with email. A well-informed decision engine can determine which consumers will only purchase when given a coupon and which consumers simply need a nudge in the right direction. In this case, you don’t need to send everyone a coupon. You can message to individuals appropriately (and differently) to drive better results. 

The bargain-hunting customer may get a subject line like, “Save 10% on your favorite fall fragrances!” while another may see something like “Your favorite fall fragrances are back!”

Beyond the subject line, you can personalize even further. With past purchase behavior, you can remind someone who bought autumn-themed products last year that their favorite apple scented candle is in stock. With behavioral data, you can learn the best time of day to send your email to each individual so that your message is at the top of the inbox right when they’re most likely to check their email. And with location data, you can even show them where your closest storefront is. 

In approaching your email strategy with personalization at the forefront, you're not only improving the experience for customers but driving better return on marketing investment (ROMI) by eliminating waste. You’ll reduce marketing spend by sending fewer emails, and you’ll increase revenue by limiting the amount of unnecessary discounts. 

The bottom line is that email marketers need to move beyond thinking about “Today ONLY!” To drive long-term growth in the channel, you need to think about email’s role in personalizing the entire customer experience.

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