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Join Our Research Team at DMA 2014
Jul 31, 2012
Case Study

Email Segmentation: Targeted program reduces advertising costs 73%, leads to 3,000% ROI

SUMMARY: Segmenting a database and using those segmented audiences for targeted email efforts is an effective marketing strategy. To accomplish this, at least two elements have to be in place -- the database must be large enough to warrant segmentation, and each record must contain enough data to conduct the segmentation.

See how one healthcare company overcame the challenge of reaching its audience, grew its email database to 64,000 entries over four years, and drove a 3,000% ROI in the process.
by David Kirkpatrick, Senior Reporter

CHALLENGE

It could be argued that simply reaching your prospective customer is the most important step in any marketing effort. Before you can present your message, much less help turn that prospect into a customer, your communications have to actually reach out and touch the targeted audience.

Christiana Care Health System, a 1,000-bed health system based in Delaware -- 17th largest in the United States -- faced that exact issue. Its problem was being located between two media markets -- Philadelphia and Baltimore. This made television advertising on major networks in those markets difficult.

To compound the issue, not only did its target market not have a major TV network, but there was also only one newspaper for print advertising.

Based on previous traditional marketing efforts, the team knew direct mail was effective, and understood email marketing had the potential to be successful as well.

This case study covers Christiana Care’s email program: from growing the database from two entries to 64,000 entries, through choosing a marketing automation vendor, then segmenting the prospects, and finally successfully executing the effort.

CAMPAIGN

Even though both channels were a challenge for Christiana Care, the company was active in television and print advertising, along with billboards, direct mail and radio ads. The team used these channels to create brand awareness and to drive attendance to Christiana Care events that reach out to potential patients based on their health concerns or risk factors.

To begin the email marketing effort, the company began collecting names and used a health assessment of these subscribers to begin sending targeted email that addressed those individuals’ health concerns.

Step #1. Grow the email database

The program began in January 2008 with only two names in the email database and one very specific program -- a heart health risk assessment.

Peggy Mika, Director of Marketing, Christiana Care Health System, said the marketing team conducted a push through direct mail, print ads and radio to drive prospects to a call center where consumer data information was collected for the database.

That list quickly grew from two to 10,000 in the first two months.

This initial push also provided the team with feedback about its marketing efforts.

Mika said the call center would ask prospects where they heard about the risk assessment, and learned direct mail was the most influential channel for this effort.

Over the next four years, the email database grew to 64,000 records.

Step #2. Choose a marketing automation vendor to implement the email program

Because the database was rapidly expanding, and the goal of the email effort was to send targeted email to different audience segments, the marketing team decided to implement marketing automation to tie into a new customer relationship management (CRM) solution.

"We needed a push email provider because of the limitations that [the CRM] has in that area," explained Christopher Johansen, Senior Marketing Communications Manager, Christiana Care.

Johansen went to a trade show for the chosen CRM vendor, and he interviewed a number of marketing automation vendors before making a selection based on ease of use and what he described as "easiest to conceptualize."

Step #3. Segment prospects

Expanding on the assessment test program, the marketing team used a variety of prospect contacts to collect information:
  • Calls to the call center

  • Calls to sales reps who engage with potential patients on health concerns

  • Data from the online risk assessment test itself

This information was all placed into the CRM. From there, based on the provided data, each prospect was segmented based on different health risk factors, including high blood pressure, high BMI (body mass index), and smoker or non-smoker.

These prospects would then be targeted with campaigns specific to their risk factors.

Johansen said this segmentation could get fairly granular. For example, if the risk factor topic was menopause, it was only sent to women. Then, the segment was further narrowed by attributes, such as age, and problems specific to menopause, such as osteoporosis.

"We used to spend a lot of money to advertise in print media, and we wouldn’t fill a room (for an event)," states Johansen. "Now we spend little, if anything, to promote these kinds of events, and we get a more engaged clientele."

He said this segmentation and targeted approach is very valuable because the end goal of the entire marketing program is to get prospective patients in front of the right doctor to meet their healthcare needs.

Segmentation and targeted email help essentially prequalify those prospects, as well as provide them with information that can impact their health and provide information on Christiana Care meetings relevant to their health concerns.

Step #4. Push targeted email to prospect segments

Mika provided an example of the power of targeted email from the initial effort based on the heart health risk assessment in 2008.

Christiana Care was able to quickly add 10,000 names to the email database through traditional marketing and its call center.

The first email campaign was a targeted send to 7,000 database entries, asking those people to take the online heart risk assessment. The result was finding a large number of prospects to follow-up with from that email send.

"We were swamped," stated Mika. "We didn’t have enough appointment space for them. So, we learned that [targeted email] is a very powerful tool, and we had to be very judicious as we sent invitations."

She added after that first experience, the marketing team began sending targeted email to smaller sets of people in the database.

Step #5. Track prospect behavior for additional segmentation

Each email campaign involved a theme with links back to Christiana Care’s website, and each link was scored within the marketing automation system.

Mika explained that the website was populated with different material and content types:
  • Video testimonials

  • Print testimonials

  • Risk assessment tests

  • Information on understanding the Christiana Care system


The testimonials would cover topics like describing how someone else benefitted from an early intervention due to proactively monitoring their health risks. Email sends also included listings of Christiana Care health events.

Johansen used the musculoskeletal system assessment to explain how different content pieces could improve segmentation.

For an email series on the musculoskeletal system, there would be content on various body areas, such as knees, feet, hips and bone density.

Depending on what email recipients clicked on, their database entry would be updated with new data on where they were most interested.

Step #6. Have a clear goal for the email program

For Christiana Care’s email program, the final goal, and key conversion, was getting the prospect in front of a physician who could hopefully meet his or her healthcare needs.

This was accomplished through a scoring system. When someone receives an email within the program, the email open is given a very simple base score. Clicking on specific links within the email is scored differently.

Once a prospect opened two emails and reached a score threshold, they "graduated" to the next level of the program. Johansen said at this point, if they engage in a "significant" behavior, such as certain website activity, the team is alerted and that prospect goes into what Johansen called a "cohort," a group of prospects ready to meet a specific physician.

Events filled by the email program also contribute to this end goal.

Johansen provided an example with a 250-person event where each attendee was given a joint assessment handout. He said if 10% of those recipients responded to the handout, with 10% of that smaller group becoming patients, then that event would have driven two to four new patients for Christiana Care.

"Not only have we helped that person, we have also helped the health system," said Johansen.



RESULTS

The big number result from this effort is a 3,000% return-on-investment for the email campaign. For every dollar Christiana Care spends on advertising, it sees a $30 gross margin.

Here are the metrics from the email program:
  • 20.4% open rate

  • 8.8% clickthrough (43.5% of all people who open the mail)

  • Conversion rate of 37% of people attending an event become a patient (this KPI is up 25% from 2010)

Downstream impact of the email program:
  • Average gross revenue per converted customer -- $2,104

    • 28% of this figure directly impacts the business unit promoted

    • 47% indirectly impacts other business units within the health system

    • 25% impacts the emergency department

  • Advertising costs fell 73% in three years

  • Patient acquisition costs fell 58% in 2011

Along with these strong results, every Christiana Care event promoted through the email program has achieved 100% registration.

Johansen said the big takeaways from the effort were the reduction in costs, increase in event attendance and happier clients through the health system.

"But the big one, for our health system, is that through targeting we feel that we can improve public heath overall," said Johansen.

He added that educated people tend to take better care of themselves, live longer and have a lower overall healthcare cost. He thinks offering risk assessments and targeted health information through the email program serves as an educational function.

Johansen explained, "We have a responsibility to take care of our community, and communicating to people to take care of themselves is an important role in that."

Creative Sample

Sample email with events listing

Sources

Christiana Care Health System

Marketo – Christiana Care’s marketing automation vendor

Saleforce.com – Christiana Care’s CRM vendor

Related Resources

Consumer Marketing: Implementing marketing automation at a B2C company

Marketing Automation: 416% higher customer lifetime value from auto-email strategy

Marketing Automation Tool Drives List Growth, Boosts Registrations 664%

Email Marketing Trends: The results from 6 live polls conducted at Email Summit 2012

Email Marketing: Avoid the pitfalls of a direct-mail mindset

Trigger Happy: Why emails are the magic bullets of marketing automation and shopping cart recovery
See Also:

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