The Email ‘Dilemma’: Volume or Value?

I received an email the other day telling me that I would be a great fit for a role as a real estate agent in Dubai, despite my professional background screaming CRM!

Whilst I appreciate that this is driven by an algorithm (that clearly needs some adjustment), it got me thinking about relevance and the number of times in the past, I’ve had to argue the benefits of sending more targeted emails at the expense of volume. Side note, clicking on the ‘not interested’ button then takes you to a log in page, not the best digital journey (but more on that in a later post!)

Today businesses are armed with a treasure trove of customer information, so it's surprising that some organisations continue to send emails to their entire customer base. To be clear, there are instances when the entire customer base needs to be informed about something, but I’m talking about emails that are supposed to engage customers in some way, primarily to make them spend money. I’ve worked with lots of businesses who have segmentation and targeting down to an art, some on a 1:1 basis. These businesses recognise that mass marketing can be counterintuitive, even detrimental, yet it persists. Mass emailing without segmentation is akin to throwing darts in the dark – you might hit the target occasionally, but most of the time, you'll miss the mark.

Let's delve into why it's a problem and how embracing segmentation and targeted communications can bring longer-term rewards, not only for customer engagement but for the bottom line as well.

Impact on KPIs

The repercussions of such a scattergun approach are profound, especially when it comes to KPIs. Customer Lifetime Value (CLV) represents the total worth of a customer to a business over the entirety of their relationship. Sending irrelevant emails to customers who have no interest in the content not only annoys them but erodes CLV.

Declining Opt-In Base and Future Consequences

While it may seem that sending more emails to a larger audience is a solution, it's a shortsighted one, that can lead to a declining opted-in customer base due to email fatigue and dissatisfaction. Over time, the pot of engaged customers will diminish, leaving a pool of disinterested, disengaged subscribers who are more likely to opt out, resulting in a need to increase the acquisition effort to keep base numbers consistent, which can be expensive! The email I mentioned above is the latest in a string of irrelevant emails I’ve received from this sender, I’ve given them a lot of time to get the content right, but I fear it is time to unsubscribe!

Why Segmentation Wins

1. Personalisation: Segmentation allows messages to be tailored to each group's interests and needs. Customers are more likely to engage with content that resonates with them.

2. Relevance: Relevant content leads to higher engagement rates, which, in turn, boosts conversion rates. It's a win-win situation.

3. Reduced Opt-Outs: Customers are less likely to unsubscribe when they receive content that aligns with their interests.

4. Data-Driven Insights: Segmentation can help to glean valuable insights from customer behaviour, and help to optimise communications.

5. CLV Growth: Targeted communications result in increased CLV as customers are more likely to make repeat purchases and remain loyal.

6. Sender reputation: ISPs (Internet service providers) will only want to show their users emails that are wanted and relevant to them. They’ll use an email sender reputation to determine what makes it into the inbox. If your emails generally receive low opens, fewer clicks, high bounce rates, or contacts tend to mark your emails as junk, then your sender reputation will suffer, and your emails might be classified as spam.

Consider the following as a starting point:

• Purchase status: are they a new subscriber or customer?

• Customer Lifetime Value (CLTV): are they a single-sale or a repeat customer?

• Product affinity: when they buy, which categories do they tend to shop in?

With defined segments, subscribers can then be targeted with personalised content that’s relevant to their interests. The result? More engagement, more trust, and more sales!

Conclusion

The allure of reaching a massive audience is understandable, but bigger isn't always better. Mass emailing may offer short-term gains, but it comes at the cost of long-term customer engagement and profitability. Segmentation, personalisation, and targeted communications are the keys to not only maintaining a healthy opted-in customer base but also nurturing lasting customer relationships that will drive CRM KPIs and CLV to new levels.

#CRM #CLV #customerrelationshipmarketing #customerlifetimevalue #targeting #segmentation