An Abstract from the Spektrix Insights 2019 report that focuses on effective emails.
In a crowded marketing landscape connecting with audiences can be difficult and expensive. For this reason, email marketing - with an ROI reportedly four times more effective than any other channel - remains the lynchpin of the marketing mix. In order to better understand how emails are performing, we explore key metrics on:
● Open and click-through rates on segmented and non-segmented emails
- 91% of organisations in the data set segment at least some emails.
- Open rates on segmented emails outperform unsegmented emails by 56%.
- Click rates on segmented emails outperform unsegmented emails by over 100%.
- The highest 10% of organisations have average segmented open rates of 63% and click-throughs of 16%.
CUSTOMISATION IS VITAL
In general, emails in our data set are doing well, substantially outperforming the average open rate and nearly doubling the click-through rate in an all-industry benchmark recently published by the Direct Marketing Association.
Unsurprisingly, segmented emails perform almost twice as well again. Many models for customer and donor segmentation exist, but perhaps the most common are geographic, demographic, behavioural and attitudinal/psychographic, both singularly and in combination.
Whilst there can be value in complex models, simple can still be effective. The aggregate data and stories from the highest performing organisations in our data set prove this. They’ve seen improved ROI, achieved by employing relatively straightforward behavioural segmentation models based on historical customer and donor data.
ONE SIZE DOES NOT FIT ALL
TWO ORGANISATIONS WHICH PERFORM IN THE HIGHEST 10% OF THE DATA SET FOR OPEN AND CLICK-THROUGH RATES SHARE A SIMILAR APPROACH TO BEHAVIOURAL AND CONTEXTUAL SEGMENTATION.
LUMINATO, TORONTO, ONTARIO, CANADA
Luminato is Toronto's international arts festival dedicated to performance, visual art, music, theatre, dance and programming that cuts across traditional art forms.
Luminato builds highly targeted and personalised emails into their marketing activity, and this has yielded impressive results:
● Highly targeted emails sent to as few as 50 people can achieve open rates as high as 80%.
● Launch emails are sent to customers based on past booking behaviour, highlighting the events that are most relevant to them and often sharing an associated early bird offer. These types of emails consistently achieve open rates of over 50%.
Luminato’s success in email campaigns can be attributed to some key principles in their approach to email:
● Customer segmentation is based on customers’ attendance and purchasing behaviour (for example, customers who booked several tickets within a particular event genre or ‘niche’ during the previous season).
● Customer segmentation is based on ‘potential benefit’ to the customer (e.g. customers who have booked an event in one space might want to see the other show in that space on the same evening).
● Campaigns are personal, relevant and contextually specific.
● All communications are prioritised so that a customer is never bombarded with many emails at once and only receives the most important message (even if they technically meet the criteria for the others too).
● Targeted offers in emails are included as it encourages engagement and builds a reciprocal relationship.
Achieving consistently high email open rates takes a steadfast commitment to fostering individual relationships with customers by drilling down into CRM data. This commitment has to be shared by the whole marketing and communications team, because fostering a more personal relationship with a customer requires carefully controlled communications.
LONE TREE ARTS CENTER, DENVER, COLORADO, USA
Lone Tree Arts Center hosts a wide variety of concerts, plays & events. The venueincludes a grand entry hall space for events and exhibitions, a 500-seat main stage theatre and an adaptable 225-seat event hall.
Having long recognised the power of targeted emails, the team at Lone Tree take a data-driven approach to customer segmentation. They regard this as the most valuable tool in their arsenal and their aim is for customers to only receive emails that feel truly relevant to them. To support this effort, they refer to crossover analysis reports and segmentation models that reveal customers’ areas of interest and their relationship to the organisation through their past behaviour.
The data findings help them to stay consistent in their approach across channels, gain a deeper understanding of their customers, make informed, efficient use of resources, and speak personally to customers. This data-driven insight helps them to:
● Constantly check their own assumptions about customers. They interrogate events that have had the greatest customer overlap, examining scenarios where the data confirms or challenges their assumptions.
● Take a unified approach to marketing across channels outside of email, while keeping the message consistent. First, they tend to send a direct mail postcard to advertise headline shows, and follow-up emails just a few days later – a ‘one-two punch’ of communication that’s proven effective. They then use the same list to run targeted ads on social media.
● Tailor content based on split-testing, specifically focussing on subject lines to learn what grabs readers’ attention.
Off the back of this, Lone Tree perform well above our data set average, with a 59% open rate and 44% click-through rate.
We always test subject lines. I’ve been surprised at some of the cheesier subject lines that have won out, but clearly they work!
LEIGH CHANDLER, MARKETING DIRECTOR
● While email marketing is relatively inexpensive, successful segmentation and communication strategies can take time to refine. Measuring what matters will help you know if this is time well spent. Have you set targets for your email communication on open rates, click-throughs, and/or resulting sales?
● Our success stories and outside research suggest that sending email in context to the receiver, not just on the timeline of the sender, drastically improves open and clickthrough rates. What can your organisation do to use available functionality in your CRM and email marketing systems to reach out in a way that truly connects with the recipient, both in tone and content?
● What’s next for segmentation? Is your organisation utilising segmentation principles for fundraising? Have you considered combining behavioural and context-specific segmentation with demographic or attitudinal/psychographic segmentation models?
How much existing knowledge of your customers is based on assumptions, and how much on data?
OPEN AND CLICK RATES FOR ALL ORGANISATIONS
Industry Insight: Indigo Ltd
Indigo Ltd specialises in helping the arts, cultural and heritage sectors. They work with organisations to help increase impact and income through more effective marketing and fundraising.
Katy Raines, Partner and Co-founder at Indigo, shares her thoughts on three inter-linked factors that make segmented emails more effective:
Data Selection – choosing a smaller group of people who share similar interests, behaviours or needs, rather than a large group whose needs will differ hugely allows you to…
Content – carefully select content that matches their previous behaviours or preferences, rather than having to include everything to make sure there’s something that appeals to them. Giving them less choice, but making the content more relevant gets a higher response rate. Examples might be grouping together all the contemporary events (which often get hidden amongst everything else) for people who have only ever bought such events in the past, flagging up events happening in the next seven days for people who always book at the last-minute, or packaging mainstream shows for a family audience.
And perhaps most importantly…
Tone of voice – match the tone of voice that is most likely to connect with the people you’re talking to, being creative and sometimes quirky, rather than having to adopt a bland tone that appeals to no-one. You’ll need a good understanding of each segment to do this – and the ability to write in a way they want, rather than a way you like. If you’re not sure if you’ve got it spot on, find a colleague or friend who fits the segment you’re talking to and test it out on them.
Find out more at Indigo