| Experts Corner |  How can I better define which inbound leads are more likely to convert so I can prioritize them more effectively?
Paul McConville, Director of Consumer-Facing Services , TARGUSinfo
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The Evolution of Email and CRM
Simon Greenman, VP Marketing, Quris Inc.
 Leveraging Customer Data Makes for Better Email
The traditional approach to email is going to be severely challenged going forward. Email so often has been seen as analogous to a cheap direct mail service. It costs relatively little to send the same email message to millions of customers. In the midst of the spam rhetoric, it is also often easy to forget that permission email is a very effective channel for building customer relationships. It can not only help decrease marketing costs, but email can help increase customer retention, drive revenues, and contribute to brand experience differentation. Consumers continue to read and value email from trusted companies, but customers are becoming more sophisticated about what they like and dislike in their inbox. And this presents signficant challenges for email - customers are clearly voting with their delete key and are suggesting this approach will not work for much longer.
Rather than a blunt approach to email, a more surgical approach is needed to keep the customer engaged in the email channel. And customers are saying that this means making it relevant to me and match to my tolerance for frequency. And this is where CRM has a huge role to play.
While email can be a highly effective channel for building relationships, it is also something of a double-edged sword. Poorly executed permission email programs — ones that send messages too frequently, in which the content is dull or irrelevant to the recipients, which abuse the users' privacy, or otherwise offend, annoy or bore subscribers — can have a deleterious effect that goes beyond users simply deleting messages unopened or unsubscribing from the list - poor email practices can result in customers stopping doing business with you.
Not only does the email sword cut both ways, but customers are also forming an "inner circle" of email relationships that they are willing to engage with. The biggest challenge for email marketers today is breaking into and staying inside customers’ email inner circle. Getting into the inner circle inbox is something of a zero sum game: an existing company needs to be displaced to get your company in. And companies are not only competing with their competitors for the place in the inner circle, but also competing with every other company that is looking to get into that inbox.
This is not so different from how people conduct their social lives: with time we become discerning in our relationships and maintain a smaller number of close friendships, beyond which others become casual acquaintances we keep in touch with less frequently. The key is email frequency and relevancy.
What’s the Frequency?
The #1 reason that customers lose interest in email is frequency. It is not uncommon today for a customer to receive multiple emails from different departments of a company with no overriding governance coordination. A customer might receive a frequent flyer account balance from the loyalty department, a promotional message from a marketing partner, an account transaction confirmationfrom the service department, and a special offer from the marketing department. The number of different email touch points with the customer is often way more than expected.
Many companies do not have a complete picture of how many emails are being sent to their customer and when. This leaves the organization exposed to potential customer frequency burnout. An obvious solution is to build a model of all the email touch points. Storing these touch points as part of the CRM customer attributs will allow for an email “holistic” view of the customer ideally. From this it is possible to assess the overall email communication strategy and put in place the appopriate governance to ensure that frequency is managed.
All too often the frequency of mailings is likely to be too high for many customer segments. Companies should often consider pulling back. While this might seem anathema to a marketer there are interesting ways to do this while still providing significant value to the customer and the company. For example, customers are increasingly differentiating between service messages that they like, such as account status updates, and promotional messages they they dislike. Marketers have the option of combining a main service message with a smaller promotional message into a single message.
To truly assess whether frequency is optimized for different customer segments requires measuring the health of the email relationship. A good proxy for this health is looking at how the customer is engaging with email over time. For example, if the customer is opening and clicking-through on less and less emails with time then their engagement momentum is declining. This is often a good indicator that something in the email program is not working for them. It is often likely to be due to frequency and relevance. By storing this customer engagement momentum score in the CRM database can help dictate what emails will be sent to them in future.
To Be Relevant or Not To Be Relevant
Besides frequency, relevance is absolutely critical to engaging the customer in the email channel. All too often companies train their customers to ignore them. Today over 93% of customers report that they will simply delete an email if they are not interested in it. After a customer receives a pattern of two, five or ten emails that does not add value to their day, the customer will simply hit the delete key as soon as they see the company sender. The key challenge for email marketers is to define relevancy and that is where CRM can help.
The best answer to the question of how to offer customer relevance is to leverage a knowledge of the existingcustomer relationship. A strong CRM database will contain all the key attributes that can be used to segment and target email programs to provide that relevancy. Digging into the CRM database to understand what the customer has purchased in the past, what they have expressed interest in, their demographics and psychographics, their desire to receive communication, can all provide key insights into the customer that can help drive more targeted email programs.
Email is a highly intimate and personalized channel. It is an ideal medium for moving towards that “holy grail” of a 1:1 customer dialogue that really demonstrates to the customer that they are known and valued. But the first step is to segment and target appropriately. Key tactics, as starting points, for email customer segmentation that can be driven from the CRM database include the following. It is amazing how these basic segmentation strategies are often not even implemented.
• Demographic Targeting. Targeting emails based on age and gender, especially in the retail sector.
• Recent Purchase Life-Stage Targeting. A new product purchase, such as a color printer, could trigger subsequent emails for relevant additional products such as replacement printer cartridges. Many products and services follow a life-stage model.
• Implied Interest Targeting. If a customer click through on certain links consistently then this can imply certain interests. For example, if a customer consistently clicks through on luxury travels links versus bargain backpacking vacations, then these interests allow for further segmentation.
In short, customers are becoming more sophisticated about email. No longer will the approach of sending the same thing to the same customer work. Emails that come too frequently or are irrelevant not only will see the company booted from their email inner circle but more dramatically customers could stop doing business with a company as a result of their poor email practices. To ensure that companies really leverage the value of the email channel it is critical that companies send emails that are of the right frequency and are relevant. This means building a holistic view of email frequency through out the company and leveraging the CRM knowledge of the customer to ensure customers are segmented and targeted to maximize engagement. This will see email and CRM meet.
| Simon Greenman is the VP Marketing at Quris, (pronounced CURE-iss), an email agency specializing in helping companies create customer relationships and profitability in the email channel. With its unique View from the Inbox™ customer centric approach to email, Quris applies proprietary analytic tools, research and blueprints to drive incremental revenues and customer retention. With offices in Denver, San Francisco and Dallas, Quris has an award-winning team of strategy, analytics, creative and technology experts. Clients include Charles Schwab and Blockbuster. For more information visit www.quris.com
Quris Inc.
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