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Join Our Research Team at DMA 2014
Jul 12, 2011
How To

Email Marketing: Segmenting a database and delivering more targeted content without overwhelming your team

SUMMARY: Segmenting your database and sending targeted content can significantly improve results -- but it can also invite a host of new challenges. How can you start segmenting without overwhelming your team?

See how King Arthur Flour gradually segmented its database, worked through challenges, and delivered more relevant content to push open and clickthrough rates to nearly 50%. Find out which challenge was the most difficult, which took the most time -- and how the team overcame both.
by Adam T. Sutton, Senior Reporter

The email marketing program at King Arthur Flour Company is the second-largest source of traffic to the baking supply brand's website. The program's hundreds of thousands of subscribers generate about 30% of the company's site traffic and online sales, says Halley Silver, Director of Online Services, King Arthur Flour.

Silver's team sends between 10 and 15 batch-and-blast emails per month, she says, where the same email is sent to the entire list. However, King Arthur gradually segmented its list during 2010 and started sending targeted content. Results have since improved.

Average metrics for emails sent to the team's overall list:

Open rate: 30%
Clickthrough rate: 27%

Average metrics for emails sent to the team's segmented lists:

Open rate: 35% to 50%
Clickthrough rate: 25% to 35%

"Compared to our full-list broadcast emails, the open rate is extremely high, the click rate is extremely high and there are hardly any unsubscribes and this is across all of our segmented lists," Silver says.

King Arthur Flour did not begin segmenting its list and sending targeted content overnight. Silver’s team gradually established the strategy and overcame several challenges along the way. Below, we describe the tactics she used and what her team learned while establishing this strategy.

Tactic #1. Build a case for segmentation

Segmenting a list is typically not a turnkey process. There is work involved, and building the motivation to accomplish this work can help power the project through to completion.

One motivating factor for King Arthur Flour was Silver’s team's desire to deliver relevant content to its niche audiences, such as subscribers interested in gluten-free baking or wholesale products. Featuring such content in emails to King Arthur’s general database typically generated poor results.

"For example, the bakers who use flour are the majority of our audience," Silver says. "When we sent them a gluten-free email, we saw they were unsubscribing."

Such results motivated the team to pursue segmentation. The team wanted to identify specific groups within its database to send content that connected with the groups' interests. Doing so would also help avoid sending niche content to the team's entire database, which many subscribers considered irrelevant.

"In my opinion, making sure you're not sending irrelevant messages to each of your customer segments is perhaps even more important than focusing on relevant messaging," Silver says. "By sending irrelevant messages you run the risk of being perceived as a spammer, and your unsubscribe rates go way up."

Tactic #2. Start with a single segment

King Arthur Flour did not jump headfirst into segmentation. Instead, the team started with a single segment: subscribers interested in the brand's retail store.

Starting with a single segment helped Silver's team in the following three ways:

- Managing unforeseen challenges

The team was able to work through the growing pains from new strategy in a controlled environment. The team would also know what to expect when launching new segments later on, and would have a tested process for segmentation and delivery.

For example, after struggling to keep up with deadlines for emails going to the retail subscribers, Silver's team built four email templates for all emails going forward. This reduced time spent on design and revision, and enabled the team to focus more on the creative material and content that had proved to lift results.

- Adjusting strategy

Emails to this first segment began as a daily alert about specials at the retail store and menu options in the store's bakery. The team had to quickly shift from a daily email with detailed information to a monthly email with general highlights.

"It was incredibly difficult to get that daily content we wanted to send. We were trying to find out what was going to be in the café and what the bakery was going to be baking on a certain day. But if they didn't have the ingredients, they had to switch gears and it was operationally quite difficult."

This transition was simpler than it would have been if the team had also been establishing several additional segments (which also might have needed adjusting).

- Proving results

The marketers were able to prove that segmenting and sending targeted content improved results, giving them the confidence to expand the strategy and gradually add more segments.

"The open rate was high, the unsubscribe rate was low, the clickthrough rates were high, and we sent out the emails and saw people coming into the store. It was as simple as that," Silver says.

Tactic #3. Outline other audience segments

Silver's team outlined six audiences in its email database that would likely want targeted information:

o Subscribers near their retail store (described above)
o Canadiansubscribers
o Wholesale subscribers
o Gluten-free subscribers
o Baking Sheet print newsletter subscribers
o Baking Education Center subscribers (King Arthur Flour's baking school)

The team was already aware of these specific groups within its larger audience. The team used purchase history, location and other data to segment the database into these groups. For example, customers who regularly purchased gluten-free products would be added to the gluten-free group, and customers who regularly shipped to Canada would be added to the Canadian group.

"It was fairly easy. Once we had it set up we knew we had these distinct audiences that might not be interested in the majority of our batch-and-blast campaigns, but that certainly would like to hear from us on a regular basis and would like to hear important news from us when it happens," Silver says.

Here are other tactics they used to associate a subscriber with a particular segment:

- Preference center

The team established an email preference center where subscribers could indicate which types of information they wanted. The team links to this page from every email it sends, and also encourages subscribers to indicate their preferences in a welcome email.

- Sign up process

Subscribers are asked to indicate their content preferences on the registration page. This page is nearly identical to the page for the team's preference center.

- Providing incentives

Silver's team plans to test incentives such as coupons to encourage subscribers to visit the preference center and update their choices.

Tactic #4. Leverage internal resources for content

Developing and formatting content is the most time-consuming part of King Arthur Flour's email program, Silver says. Every email the brand sends includes a recipe that is related to the audience's interests. For example, gluten-free subscribers will receive gluten-free recipes, and subscribers who are interested in the education center will receive recipes that are taught at the school.

Silver strives to repurpose content from throughout the company to use in the email program. She is thankful, she says, that the company's staff are often willing to write blog posts, provide recipes, or help in other ways.

"For each one of our email [segments], there is a business stakeholder from another area of the company, and they are as eager to build their lists and their program as we are. So they are usually very responsive in terms of helping develop content for the emails."

Another way Silver's team regularly generates content is through repurposing content used in other marketing efforts and recipes that are developed for other areas of the company.

"We definitely reuse as much as we can and try to take advantage of what is already out there," she says. "Then it is just a matter of adapting and publishing it for email and the Web."

Tactic #5. Carefully manage the schedule

Silver's team continues to send general emails to its entire database, as well as targeted emails to each of its segments. The biggest challenge in the program, Silver says, is to manage the schedule across its segments.

"We try to send [a maximum of] one email per day, but sometimes there's overlap," she says.

For example, the team recently planned a free shipping promotion. Since it wanted to reach the gluten-free segment with a targeted version of the offer, the team had to change the gluten-free email's schedule to fit into the promotion's timeline. These types of conflicts happen regularly.

This is another example of why it can be helpful to introduce new segments and targeted messaging gradually. Silver's team was able to understand and create processes for these scheduling challenges -- her most significant challenges overall -- in the context of a single segment before expanding to others.

Useful links related to this article:

CREATIVE SAMPLES:
1. Email to Canadian segment
2. Email to wholesale segment
3. Preferences center
4. Registration page

Members Library -- Behavior-based Email Send Times Lift Opens, CTRs and Referrals: Test and results

Marketing Research Chart: Top email marketing metrics, tracked by email maturity phase

Email Testing: More specific subject line improves open rate by more than 35%

Email Marketing: Three lessons learned at the MarketingSherpa Email Marketing LEAPS Advanced Practices Workshop

Content Marketing: How to get your subject matter experts on your corporate blog



Comments about this How To

Jul 12, 2011 - Mark Ogne of Acxiom says:
Yet, fewer than 50% of email marketers even segment OR target within their programs. Read joint research with Acxiom and David Daniels - www.acxiom.com/email - free download, short registration required.


Jul 18, 2011 - Jonathan Cottrell of Solid Data says:
Segmenting your customer database is indeed a very powerful technique, whether for B2B or B2C. King Arthur Flour was in a fortunate position; criteria for segmentation were readily apparent. Gluten-free must have stood out by a mile as being in a segment by itself (and in fact, segmenting by product type is often especially helpful - both for improving ROI on marketing and for identifying cross-selling opportunities.) Quite often, though, we see enterprise data with many possible criteria for segmentation, too many to be explored efficiently by hand, which would be a trial-and-error process, testing possible segments to see what worked. On these occasions, it can be very helpful to consider data-driven segmentation, using the modern software techniques that are now available. I say "modern", because data-driven segmentation has a long and somewhat chequered history. It was the case until quite recently that even methods well-regarded in the field were prone to quite poor results, often misidentifying the real number of segments, for instance. This is important, because we are playing a game of margins; by segmenting, we hope to improve our margin. Bad choices for segments may result in no improvement, and paradoxically, particularly unfortunate choices may be worse than no segmentation at all. That's the bad news. The good news is that the software is improving all the time, and we are possibly now at a point where the best segmentation software can compete with a human with industry knowledge. The advantage of arming your analyst with such a tool is an order of magnitude productivity improvement for this task. Jonathan Cottrell http://www.solid-data.com



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