The four main variables are:
1. Creative: the design and layout of the mailshot
2. Offer: the proposition or the benefits of responding
3. Timing: the season, month or day when the offer or mailshot lands on a desk or in a house
4. Targeting: the segments we are targeting; the mailing list or section of a database.
Targeting for e-mail marketing involves selecting a subset of the list for mailing, whether it is a bought-in list or a house list.
Let’s run through 10 of the common options for targeting, highlighting their relevance to e-mail marketing.
1. Demographics (age, gender, geography). With the relatively low cost of creating and dispatching e-mail creative, a different style and tone of creative can be developed according to age and gender.
2. Lifestyle or psychographic. The providers of lifestyle classifications provide services to integrate this data with e-mail lists in order to target according to lifestyle.
3. Business-to-business. For B2B organisations, the primary segmentation is usually according to company characteristics such as sector or size, proxied by the number of employees or turnover.
Dell Computer uses a classification based on employee size as its primary segmentation. Different web-site and e-mail content is targeted at each of these segments. The individuals that make up the decision-making unit can also be targeted separately.
4. Product. This refers not to particular products, but to general categories. For example, an IT supplier may distinguish between customers who focused most on hardware or on software categories.
5. Purchase history. This evaluates the characteristics of purchase through time using evaluation schemes such as recency, frequency and monetary value (RFM) analysis.
6. Customer value. The simplest form of customer value calculation looks at the value to customer over a fixed period. For example, we could assess total spend across the past 3, 6 or 12 months.
7. Customer loyalty. Customer loyalty is linked in with purchase history and customer value. Customer loyalty can be measured simply by the length of time a customer has been with the company, but more meaningfully by the frequency and value of purchase using RFM analysis.
8. E-mail preference. This can simply refer to the format required for e-mails, whether text or graphical (HTML). E-mail preferences may also state the type of content or offers that a list member has expressed an interest in receiving.
9. Time on list (in months). This is arguably a more critical tool for targeting in e-mail marketing than in traditional direct marketing. With opt-in for e-mail communications we would expect that the susceptibility to response is highest immediately following opt-in. Response rates tend to be highest when the most recent list members are targeted.
10. Responsiveness to e-mail campaigns. This measure combines a number of targeting methods, such as purchase history, loyalty and time-on-list as part of the customer lifecycle.