Using a Marketing Database for Effective E-Mail Targeting

A client asked for a "rule of thumb" about the extra lift to expect when a follow-up email is sent after a direct mail promotion or actual purchase. Unfortunately, there is no rule of thumb because the variance of outcomes is so large. However the following is an important consideration for any follow-up email; and, in fact, for just about any type of promotional contact: Significant, cost-effective incremental gains typically are contingent upon data-driven, analytically-derived business rules. Generic pitches are unlikely to generate impressive results.

For example, we once worked with a client with a great deal of experience in sending follow-up emails to customers after they had placed an order. Remarkably, the results were averaging $5 of incremental revenue per email. The success of the program was so astounding that the client jokingly referred to it as a license to print money. However, it is important to note that:

  • These sorts of emails should be sent almost immediately after the purchase.
  • They should highlight the products that historically have been most closely associated with the just-ordered merchandise, based on an in-depth product affinity analysis.
  • For each merchandise category, data-driven hierarchies of product relationships should be created. Ideally, the selection logic should contain an adjustment factor to handle instances where a targeted customer has recently purchased one or more products within the hierarchy.
  • The marketing database that drives the promotions should reflect Best-Practices ContentSM; that is, it should be populated with the complete, accurate, atomic-level data required to support highly-targeted contact strategies. (Please see the following two articles for a description of Best-Practices ContentSM: "First Five Commandments of Database Content Management" Multichannel Merchant, February 1, 2007, and "Second Five Commandments of Database Content Management" Multichannel Merchant, May 1, 2007. [Link to the following two articles on the Wheaton Group Website: 1) "The First Five Commandments of Database Content Management," Multichannel Merchant, February 1, 2007, and "The Second Five Commandments of Database Content Management," Multichannel Merchant, May 1, 2007.]

It is important to note that the client had not installed the operational infrastructure required to support real-time, "suggestive selling" initiatives at the call center and Website points-of-sale. If such capabilities had been in place, it is likely that the follow-up emails would have been less effective, and perhaps significantly so. Of course, such a decline in performance would not be problematic because it would merely reflect a shift in the vehicle for capturing incremental customer demand, from email to point-of-sale CRM.