Do’s & Don’ts of Personalized Email Marketing

Increasing personalization and relevance is the top priority for a third of brands
 as they invest to improve customer experience, yet an estimated 38 percent of brands do not personalize marketing communications. Without a doubt, email segmentation yields results: Campaigns segmented by interest groups have an average open rate 13 percent higher than non-segmented campaigns. Beyond segmenting, brands must also tailor email content based on advanced customer insights. “Email personalization should involve more than including the customer’s name or referencing a recent purchase,” advises Peter Kang, Rosetta managing partner and executive creative director. “True personalization requires distilling everything you know about that individual — from transaction history to channel preference to their level of impulsivity — to create a targeted message that speaks to their specific needs and desires.”

DO: Build a cohesive view of customers via a central CRM system
DON’T: Rely on several systems

Effective email targeting is built on the backbone of a robust data infrastructure that provides a cohesive view of a consumer across channels. Boston Retail Partners has found that nearly a third of organizations now use a CRM system as the system of record for their customer master data, while a fifth of brands rely on enterprise resource planning (ERP) software. A worrisome 11 percent have no single system, which curtails their ability to provide robust guided selling and a unified commerce experience.

DO: Segment email down to micro-niches
DON’T: Neglect implicit data when micro-segmenting

The Home Depot, ranked as a Genius brand in L2’s Digital IQ Index®, is a standout example when it comes to micro-targeting. The retailer offers customers one of the most sophisticated experiences in customizing their product preferences, with 102 categories to choose from. The Home Depot also takes more implicit behavioral and purchase data into account: for example, it targets women interested in DIY remodeling or dads who love to organize.

Pampers provides another best-in-class example by hyper-segmenting by a baby’s age (collected at registration) as well as behavioral triggers (e.g., a cross-sell pitch if the customer has recently purchased diapers but not wipes). Bimonthly newsletters then provide mothers with relevant content, rewards and offers, contributing to the diaper brand’s enviable email open rates of over 50 percent.

DO: Leverage loyalty that goes beyond your own brand
DON’T: Overlook partnership opportunities with complementary brands

Brands can partner up to boost their targeting capabilities. Estée Lauder gift-with-purchase campaigns have outperformed when conducted in tandem with department stores. The promotional email is sent to a fraction of the beauty brand’s list — presumably customers known to have shopped Estée Lauder at the participating store — while the department store targets shoppers known to purchase Estée Lauder or other prestige beauty brands. Since these emails play to both brand and retailer loyalties, they achieve significantly higher-than-average read rates. Bloomingdale’s, for example, managed a 32 percent read rate for an email promoting an Estée Lauder gift with purchase that was sent to 12 percent of its list in early April — versus an average read rate of 22 percent for Bloomingdales’s emails segmented to less than 25 percent of its list.

DO: Use segmentation to protect against promotionality
DON’T: Send coupons to customers already highly engaged

A subject line mentioning a discount or special offer is the most influential factor in consumers engaging with email, but all too often this means email marketing becomes a commoditized discount-oriented program. Savvy segmentation can guard against this, as demonstrated by Home Depot. An email campaign on May 3 targeted customers based on category-driven micro-segments. Two or more creatives were sent within each segment, one of which contained a coupon. Interestingly, read rates were markedly higher for emails that did not contain a coupon — suggesting the retailer skipped coupons for customers who had demonstrated engagement in the past and included them for customers unlikely to purchase in the product category without a discount. This indicates a robust segmentation strategy, one that can turn email into a more value-oriented and less commoditized program.

DO: Use A/B testing
DON’T: Rely solely on intuition and data

Email segmentation isn’t always intuitive. Understanding customers and their concerns requires both consumer data and a commitment to A/B testing. Lancôme sent out the same email with two different subject lines on May 1: 78 percent of its list received “Say Goodbye to Shine, Enlarged Pores, and Uneven Skin,” while 22 percent received “Our 4-Step Routine Dedicated to Oily Complexions,” suggesting Lancôme is attempting email optimization via A/B testing. “A robust testing regimen is … the best way to know if you’re on the right track, and it can help measure the impact of your efforts,” says David Brussin, founder and chief product officer of Monetate.

DO: Dynamically optimize when emails are opened based on context
DON’T: Limit yourself to static email segmentation

Static segmentation is the status quo. Leading brands are going a step further, creating emails that dynamically optimize based on location, time of day and other factors. For example, True Religion saw exceptional results from a geo-targeted email campaign. Lacking expansive customer zip code data but wanting to send hyper-local emails promoting in-store events, True Religion employed Monetate’s email solution to deliver emails based on a customer’s location and even climate. Delivered to customers within five miles of a True Religion store, the emails offered $50 off for trying on a pair of jeans. The campaign resulted in a 2.5 percent increase in click-through rates, and a 1 percent lift in in-store conversion was attributed to the geo-targeted email.

DO: Seek out opportunities for triggered communication
DON’T: Miss opportunities to optimize email campaigns

On the whole, brands across L2 Indices miss the opportunity to optimize email campaigns, demonstrating scattered investments in basic personalization tactics. For instance, with the exception of Sportswear brands, fewer than half of Index brands across 
categories deliver abandoned-cart emails.

A best-in-class example for capitalizing on the increased visibility of triggered emails is provided by the Williams-Sonoma brands. In addition to a welcome email to new subscribers, these brands send multiple abandoned cart emails and recommendations based 
on brand site browsing history. For example, West Elm sends messages declaring “You’ve Got Great Taste,” showing a product recently viewed at the brand site. Williams-Sonoma brands even alert shoppers when an item they have viewed goes on sale, maximizing opportunities for customers to convert from email.

Download a copy of L2's Personalization study for more.