Segmenting files and sending to fewer people -- it's a trend we're seeing many marketers do these days, and we heard numerous Case Studies on the subject at MarketingSherpa’s Email Summit earlier this month. And they’re segmenting for good reason. Every year, without fail, the most highly rated tactic for email marketing is segmentation.

In the last 4 1/2 years, Paul Briggs, Director, Customer Loyalty and Marketing, Travelocity, has overseen the evolution of his daily email program go from cross-file blasts of 2 million-3 million to highly segmented messages. In fact, one email program now goes to only 50,000-60,000 names.

For the past 18 months, Briggs has been all about taking his customer/subscriber email to the next level. "We had to work on deal-finding strategies for our customers. What drops in price warrant an email message? Twenty dollars on a domestic trip might be interesting to some, but it's not going to be if you are traveling to London."

Obviously, price plays a big part in his team's actions, "but in the end, we also had to do a better job of [using email] to deliver both prices and a customer experience that will create loyalty."

They learned years ago not to overmail and damage lifetime value of members. The prevailing strategy behind two of their highest ROI-performing email programs was to let current and new shoppers dictate what type of messaging they would receive in terms of information on flights, hotels and car rentals. Here’s what they’ve learned:

-> Program #1. "Low Fare Alert"

In a pilot program, they discovered the name they preferred -- Good Day to Buy -- didn't resonate with consumers, so they externally marketed the emails as "Low Fare Alerts." After signing up on the home page, customers receive flight offers from top destinations when they fall 20% below the recent 30-day average.

Such triggers occur after the system pulls the prices from 30,000 origin and destination markets and puts them into a data warehouse, which also includes information on customers.

Then, the following customer activities are cross-referenced in the program's rules:

- if they fly weekly/monthly/quarterly
- if they fly international/domestic/both
- if they buy travel packages, including hotels and car rentals

Briggs’ goal is to marry pricing, timing, relevancy and activity to create a winning hybrid. Each day, they send about 50,000-60,000 Low Fare Alerts. "We thought the emails would be compelling because of the low prices and they would be relevant because the person had shopped from that origin.”

Without question, the customer-controlled email programs is allowing Briggs and his team to better target their audience. The initiative has consistently converted sales anywhere from eight to 12 times higher than less-relevant offers.

"As we've expanded our efforts to tell customers that it's not only relevant to you, but also a better price today than yesterday, we've seen conversions go up," he says. "We threw it out the door -- so to speak -- without much A/B blind testing, but its performance has been great."

-> Program #2. FareWatcher

Since airlines change their fares as much as twice a day, Briggs is continually tweaking their FareWatcher alert, which sends an email whenever a fare to a certain destination changes by an amount that the member specified. Example: a New Yorker wanting to travel to Chicago would receive an email only if the fare drops by $25 or to $200 total.

FareWatcher tracks up to five origin-destination combinations. The prompts could be received via RSS feeds or a downloadable desktop toolbar. The system also recognizes the user's IP address and accordingly serves deals to repeat visitors in a labeled FareWatcher box on the home page.

Email messages address recipients by name, informing them, "The price has changed for 1 of the FareWatcher routes you asked us to track. We recommend that you check availability now, as low fares like these tend to change quickly and sell out fast." A box appears in the middle of the email, deducting the old price from the new one while showing the savings.

"And we put in contact rules that say you cannot get email for seven to 14 days, depending on the situation," Briggs says. "We don't want our customers getting email every day."

Because they started experiencing complaints due to inventory evaporating as fast as the offers went out, Briggs set both the FareWatcher and Low Fare Alerts systems so any flight ticket over 60% off would be pulled to alleviate customer disappointment.

"Those price points are not viable for us to offer in an emailed message," he says. "We're also validating that the offer is in the market by regular checks with the airlines."

FareWatcher isn't far behind the Low Fare Alerts program in performance. If anything, its role on the home page has made it extremely important to the Travelocity brand. People are very receptive to finding the messages in their in-box.

"We have seen open rates north of 40%," Briggs says. "And that's not taken from the best two days -- that's a good hard average. Conversions are high, too."

The price-validation system they added has definitely eased customer complaints about being teased with incredibly low offers.

-> Subject line test

Four years ago, Briggs told us that he was turned off by the words 'Hot Deals, 'Free' or 'Special.' Testing and focus group studies had shown it was best to keep subject lines honest. That’s why they focus on price so much (it helps open rates), but they wondered: might other words help? So, they tested adding the word ‘Exclusive’ immediately in front of the dollar amount.

The result? “We found that where you put the terms of the offer affects open rates," Briggs says. "While pricing in subject lines sells, the word 'Exclusive' was powerful when placed before the price."


Useful links related to this article

Creative samples from Travelocity's Email Alerts
http://www.marketingsherpa.com/cs/travelocity/study.htm


Two-part Sherpa interview with Travelocity's Paul Briggs:
http://www.marketingsherpa.com/article.php?ident=23031
http://www.marketingsherpa.com/article.php?ident=23040

Premiere Global Services Inc. - helps Travelocity manage their email
campaigns:
http://www.premiereglobal.com/

Teradata - takes care of data warehousing for the travel site:
http://www.teradata.com

Travelocity:
http://www.travelocity.com