Segmentation has been proven time and time again to significantly impact email marketing metrics, and retailers in particular have plenty of consumer behavior to segment on, including purchase patterns, browsing activity, email engagement, geo-location and more. They have so much, in fact, that it can become overwhelming. So, where to begin?
While each retailer is different, there are a number of basic business challenges they share. Let’s explore a few of the most common challenges that can be addressed through segmentation and the messaging strategies that can be used to increase conversions, engagement and brand loyalty.
Business challenge: Increase the number of customers on an email subscriber list
Many retailers are disappointed when they look at their total list size versus the total number of customers on the list. There is an audience of active subscribers, however, who have a high probability of conversion if the right strategy is deployed.
This group has received welcome messages and potentially an accompanying offer. Obviously, that wasn’t enough to get a conversion, so it’s time to get creative. For this audience, it’s important to test out offers not typically used in broadcast emails (perhaps a gift with purchase or a lower free shipping threshold), as well as to test subject lines that call out subscriber behavior and encourage them to convert (“Today’s the Day!”), and, if possible, to utilize personalization to tailor the products featured in the email to match individual preferences and to aid in product discovery.
Business challenge: Convert one-time buyers to multi buyers
Another common challenge for retailers is one-time buyers. These customers have purchased once and only once. Research proves, however, that if they convert a second time, they are exponentially more likely to continue to make additional purchases in the future.
So how do retailers message one-time buyers to accomplish the goal of driving additional conversions? Content delivered to this group must accentuate the value of continuing to purchase from the retailer or brand. It is important to test subject lines that include some of the unique values the brand offers or that highlight a loyalty program to encourage additional purchases. In addition, personalization may be used based on recent browsing behavior to recommend similar products. If possible, an incentive with a sense of urgency should be used. The goal for this group is to earn trust and create a sense of immediate value.
Business challenge: Re-engage best customers who have not recently purchased
This group comprises some of a retailer’s most valuable customers. They are still actively browsing the website, but have not recently made a purchase. It’s important to express gratitude to this group through subject line and content. The goal is to keep these customers loyal and prevent them from becoming lapsed buyers.
Retailers should give this group incentives that make them feel special. Early access to a sale or other exclusive offers are effective. It is also important to support their experience with personalized content that ties to previous purchases, like how-to’s, recipes or style guides.
Retailers may also want to facilitate a conversation between this valuable group of individuals on social media. They are brand advocates and it will make them feel good to know there are like-minded individuals. If possible, retailers should use personalization to serve up products that fit their specific styles.
Business challenge: Increase conversion rate of lapsing and at-risk customers
There is a small window of opportunity to recapture this group’s attention to a level where additional conversions take place. These customers require a series of emails and retailers must monitor how they respond to each message. If they purchase, they should be removed from the conversation. If they open or click without converting, the subject line in subsequent messages should be altered to indicate that the retailer is paying attention (for example, “Didn’t we just see you?” or “We meet again!”).
Retailers may also want to use personalization and merchandising tactics to pique this group’s attention, like showing new arrivals in their preferred brand or top-rated products that match their shopping preferences. If possible, they should also be incentivized with a special offer that is repeated in every message of the series.
Business challenge: Conserve margin by serving subscribers the right product at the right time
Getting conversions without incentivizing the purchase is a goal every retailer shares. In order to accomplish this, retailers must identify the subscribers who have the highest propensity to purchase and use personalization to serve up the right product mix. The target audience is recent active shoppers that have not made a purchase recently. They should not be new to the brand and the retailer should have a decent amount of information on their product attribute affinity.
For this group, it is important to serve up the exact products they have been browsing within the last month or two and include lots of comparable products that will fit their needs as well. The right content, served up at the right time, means a coupon code won’t be needed to get the conversion.
As retailers incorporate any of these strategies into the marketing mix, it is important to monitor and optimize accordingly. Running split tests on subject lines, timing and personalization algorithms will help to solidify an approach moving forward. Every retailer faces each one of these challenges—but finding the best solution for a specific retailer or brand takes time and testing.
Listrak provides email marketing services to 77 of the Top 1000 online retailers in North America, according to Top500Guide.com.
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