Five Things You Need to Know for Successful E-mail Personalization

The advent of e-mail as a marketing medium has provided catalogers and online marketers with the ability to reach their customers with personalized, highly relevant messages that drive them to purchase again and again. In fact, 39.6 percent of respondents to The Direct Marketing Association’s “2005 Postal and E-mail Marketing Report” used e-mail personalization to increase response rates last year; 93.2 percent of those marketers said the tactic was successful.

But before you can start slapping your customers’ names and other personal details on all of your outbound e-mails, there are five things you’ll need, according to a recent white paper from catalog management software provider Junction Solutions.

1. Know whether your customers will benefit from personalization. If all of your customers have the same needs and produce the same lifetime value for you, then there’s no point in providing a customized message for those customers, the whitepaper’s authors write.

If, on the other hand, customer analysis reveals that type A customers have significantly different needs from type B customers, then message customization may be appropriate. But you’ll have to test whether one-to-one personalization — which includes not just adding customers’ names to e-mails, but also creating messages relevant to each of those customers based on purchase history — is cost-effective in the long run, Junction Solutions’ officials note.

2. Gain access to adequate customer data. “Without data that can be accessed across channels, customers can’t be analyzed and segmented according to RFM or other characteristics for future offers,” the authors point out.

Customizing and personalizing e-mail messages for a large group requires buyer-level sales data, as well as specific results from past marketing efforts, such as how individuals have historically responded to past offers. All of this data should be collected in a single customer database and integrated and analyzed across all channels, the authors write.

3. Have adequate technology. If you don’t possess one individual database that collects customer data from catalog, Internet and retail sources, then those multiple databases will need to speak the same language. For adequate customization to take place, all data about individual customers need to be available to marketing staff across channels.

So if customer data is updated in one channel, Junction Solutions officials point out, it’s immediately shared across the remaining channels and is immediately available for use in whatever personalization effort those channels are planning.

4. Gain support from all channels. If silos still exist within your company, work across them to achieve deep personalization. All channels must be committed to collecting transaction data that can be used to develop a picture of each customer if personalization is to succeed, the whitepapers’ authors write.

5. Balance distinctive information with relevance. The value of distinctive customer information, such as a first name or the fact that a given customer buys gifts for her nephew, is enhanced by highly relevant messaging, such as new products that fit that same customer’s past purchase preferences.

While click-through rates on highly distinctive, highly relevant e-mails are almost always greater than non-personalized messages, maintaining highly personalized messages with no relevance actually results in lower click-through rates than non-personalized messaging, the whitepaper notes. Be prepared to fill both sides of the equation to get the most benefit.

For a copy of Junction Solutions’ whitepaper, “The Whys and Hows of Personalization and Customization, visit http://www.junctionsolutions.com/programs/Download.aspx