4904 RR Email Marketing

Email Marketing:
Get Personal with Your Customers

June 2008
Email Marketing: Get Personal with Your Customers
Page 2
Executive Summary
This report identifies best practices in email marketing personalization by Research Benchmark
isolating the strategies, technologies, and processes that lead to superior Aberdeen’s Research
email campaign performance in top performing organizations. The findings Benchmarks provide an in-
represent the views and intentions of over 550 organizations. depth and comprehensive look
into process, procedure,
methodologies, and
Best-in-Class Performance technologies with best practice
Aberdeen used three key performance criteria to distinguish Best-in-Class identification and actionable
companies, which achieved: recommendations
• 51% average annual increase in email open rate on email campaigns
• 42% average annual increase in email click-through rate on email
campaigns
• 26% average annual increase in email conversion rate
Competitive Maturity Assessment

Survey results show that the firms enjoying Best-in-Class performance "When subscribers decide on
shared several common characteristics: what to opt-in for, they end up
getting the most relevant
• 67% have published rules and regulation governing who is allowed information, and at the same
to communicate to customers and prospects via email time, it helps us build on
customer communication and
• 46% have processes in place to identify high value customers and increase the different types of
market to them uniquely over email relevant newsletters and alerts
we can offer."
• 37% use advanced personalization techniques in email campaigns
~ Brent Laderoute, Director of
Required Actions Advertising, West49
In addition to the specific recommendations in Chapter Three of this
report, to achieve Best-in-Class performance, companies must:
• Identify high value customers who willingly create a
relationship with a company by opting-in, registering, or
providing feedback on forms or surveys. Stop trying to market
to the customer based on what the company wants the customer to
hear and start listening to the customers' explicit and implicit
signals. Email personalization should create an intimate relationship
between a customer and the organization.
• Collect, measure, refine. The foundation of email
personalization is a robust customer database. Best-in-Class
companies constantly optimize and refine email campaigns by
measuring performance. Email effectiveness and long term
improvement in email performance requires messaging that will
impact and have relevance to customers and prospects.
© 2008 Aberdeen Group. Telephone: 617 854 5200

www.aberdeen.com Fax: 617 723 7897
Page 3
Table of Contents
Executive Summary....................................................................................................... 2
Best-in-Class Performance..................................................................................... 2
Competitive Maturity Assessment....................................................................... 2
Required Actions...................................................................................................... 2
Chapter One: Benchmarking the Best-in-Class ..................................................... 5
What is Email Personalization? ............................................................................. 5
The Maturity Class Framework............................................................................ 6
The Best-in-Class PACE Model ............................................................................ 7
Best-in-Class Strategies........................................................................................... 8
Chapter Two: Benchmarking Requirements for Success ..................................10
Best-in-Class Segmentation Tactics ...................................................................10
Best-in-Class Advanced Personalization Tactics.............................................11
Competitive Assessment......................................................................................14
Capabilities and Enablers......................................................................................15
Chapter Three: Required Actions .........................................................................20
Laggard Steps to Success......................................................................................20
Industry Average Steps to Success ....................................................................20
Best-in-Class Steps to Success ............................................................................22
Appendix A: Research Methodology.....................................................................24
Appendix B: Related Aberdeen Research............................................................26
Figures
Figure 1: Top Challenges to Email Personalization- All Respondents .............. 6
Figure 2: Strategies to Support Email Personalization.......................................... 8
Figure 3: Companies Currently Using Personalization.......................................10
Figure 4: Currently Track Email Performance with a Landing Page................17
Figure 5: Use of Dynamic Message Delivery ........................................................19
Tables
Table 1: Personalization Trends- All Respondents ............................................... 5
Table 2: Top Performers Earn Best-in-Class Status.............................................. 7
Table 3: The Best-in-Class PACE Framework ....................................................... 7
Table 4: Definition of Personalization ....................................................................10
Table 5: Top Segmentation Attributes...................................................................11
Table 6: Best-in-Class Performance as a Result of Leveraging Email
Segmentation................................................................................................................11
Table 7: Top 10 Attributes Used by the Best-in-Class in Personalized Emails
.........................................................................................................................................12
Table 8: Performance Variance after Personalizing Individual Email
Campaigns .....................................................................................................................12
Table 9: The Competitive Framework...................................................................14

Page 4
Table 10: The PACE Framework Key ....................................................................25

Table 11: The Competitive Framework Key........................................................25
Table 12: The Relationship Between PACE and the Competitive Framework
.........................................................................................................................................25

Page 5
Chapter One:
Benchmarking the Best-in-Class
Ninety-six percent (96%) of organizations believe that email personalization Fast Facts
can improve email marketing performance. This study explores the role of √ 6% the 551 participating
email personalization and identifies the processes, technologies, and best organizations indicated they
practices that enable Best-in-Class organizations to deliver superior email were not "very satisfied"
campaign performance. with the sophistication of
their email marketing
What is Email Personalization? practices
There are various degrees of email personalization. The most common form √ 57% of organizations allocate
of email personalization includes the use of a customer's name in the 1% to 10% of their outbound
salutation of an email. Sixty-three percent (63%) of all respondents leverage marketing dollars to email
(20% of organizations
this form of “light personalization” to send the same email message to all
allocate 11% to 25%)
prospects. Table 1, outlines the levels of personalization explored in this
research. Note: Respondents were asked to select all that apply from the
choices provided in Table 1.
Table 1: Personalization Trends- All Respondents

Percentage
Level of
Definition Currently
Personalization
Using*
Mass emailing The same email goes to all prospects 43%
Light Same email goes to all prospects,
63%
personalization prospect name is personalized
Medium Email content is personalized by segment,
33%
personalization prospect name is personalized
Individual emails are personalized with
Heavy name and/or other profile information,
16%
personalization information on purchase history, product
or service recommendations, etc.
*Respondents were asked to select all that apply.
Source: Aberdeen Group, June 2008
Heavy personalization techniques allow organizations to develop highly

personalized relevant marketing campaigns by incorporating customer
profile information, segmentation or demographic behavior, channel
behavior, purchase history, personalized product or service
recommendations, online activity, and other attributes from customer
databases. One in three companies segment customers by demographics or
behavior and market to these segments uniquely over email campaigns. One
in five companies send personalized customer-specific emails based on
individual profiles, purchase history, product recommendations, and other
attributes which will be explored in Chapter Two.

Page 6
Top Challenges to Email Personalization

The top challenges to developing more advanced personalized campaigns
stem from a lack of technology, lack of training, and organizational
resources (developing personalized marketing content). As a result, over
60% of respondents personalize using nothing more than the customers'
name (Figure 1).
Figure 1: Top Challenges to Email Personalization- All

Respondents
All Respondents
“Purchasing third party
Creating personalized marketing
46% information for use in
content segmenting and targeting can be
hit or miss. We have used a
few very reputable sources that
Access to data for use in consistently delivered quality
44%
personalized emails data. I recommend sticking to a
provider that has worked well
in the past. Also, we try to
Lack of expertise in email
30% maintain the most robust
personalization
database possible, so we don’t
have to rely on third party
information as often.”
Lack of technology 27%
~ Mark Rechner,
Director, Marketing
Communications, Experient
0% 10% 20% 30% 40% 50%
The Maturity Class Framework

Aberdeen used three key performance criteria to distinguish the Best-in-
Class from Industry Average and Laggard organizations:
• Open-rate: The ratio between opened and sent emails
• Click-through rate: The ratio between the number of clicked links
within the email and sent emails
• Sales conversion rate (attributed to email): The number of
individuals to purchase a product or service (conversion can also
include consumption of information, form completion, etc.) over the
total number to receive the message
In this study, organizations that achieved the highest performance in these
three metrics represent the Best-in-Class, as shown in Table 2.

Page 7
Table 2: Top Performers Earn Best-in-Class Status

Definition of
Mean Class Performance
Maturity Class
51% average annual increase in email open rate on
email campaigns
Best-in-Class:
42% average annual increase in email click-through
Top 20% of aggregate
rate on email campaigns
performance scorers
26% average annual increase in email conversion
rate
Industry Average: email campaigns
Middle 50% 16% average email click-through rate on email
of aggregate campaigns
performance scorers 10% average annual increase in email conversion
rate
Laggard: email campaigns
Bottom 30%
9% average annual increase in email click-through
of aggregate
rate on email campaigns
performance scorers
3% average annual increase in email conversion rate
The Best-in-Class PACE Model

The research proves that email personalization is a critical component to
Best-in-Class email campaign performance. However, Best-in-Class
companies also demonstrate that superior performance requires a
combination of strategic actions, organizational capabilities, and enabling
technologies summarized in Table 3.
Table 3: The Best-in-Class PACE Framework

Pressures Actions Capabilities Enablers
Need to improve Integrate email, web Published rules and regulations Email marketing
Return on analytics, CRM, and governing who is allowed to Segmentation and targeting tools
Marketing other marketing communicate to customers and Web analytics
Investment technologies prospects via email
A/B tests or multivariate testing
(ROMI) Improve the quality Processes in place to segment
Event triggers / rules
of data in the email lists for improved message
marketing / relevancy Dynamic content messaging
customer database Individuals accountable for list
quality and database accuracy
Email marketing manager is
involved in conversations about
integrating web analytics and
CRM

Page 8
The top pressure driving all organizations to focus on email personalization

is a desire to maximize Return on Marketing Investments (ROMI); cited by
54% of the Best-in-Class and 39% of all others. The need to increase online
revenue comes as a secondary pressure for 41% of Best-in-Class
organizations and 37% of all others.
Best-in-Class Strategies
Technology integration is a key challenge for all organizations when it comes
to personalization. More advanced levels of email personalization require
robust data from a plethora of different sources: web analytics, ERP, CRM,
email marketing, customer feedback tools, etc. Seventy eight percent (78%)
of Best-in-Class companies leverage a customer database (versus 63% of all
other companies). The Best-in-Class have already integrated disparate data
sources and, as we will see in the capabilities section, have a relentless focus
on data quality (Figure 2).
Figure 2: Strategies to Support Email Personalization

80%
62%
54% 51% 52%
60% 49% 53% 48%
41%
40% 29%
20%
0%
Integrate Email, Web Improve the quality of Up-sell and Cross-Sell
Analytics, CRM, and data in the Initiatives
Other Marketing marketing/customer
Technologies database
Best-in-Class Average Laggard

Best-in-Class companies achieve superior performance because they focus

on developing a personal relationship between the company and their
customers. Forty-eight percent (48%) of Industry Average companies are
currently focused on up-sell and cross-sell initiatives to improve email
performance. If these initiatives do not include data quality efforts, up-selling
and cross-selling will be premature and will likely continue to accelerate
mediocre email campaign performance.
Aberdeen Insights — Strategy
In order to increase revenue, organizations need to truly understand

customers. How do they purchase? When do they purchase? What do
they purchase and why? Best-in-Class companies can answer these
questions about their customers.
continued

Page 9
Aberdeen Insights — Strategy
More importantly, the Best-in-Class demonstrate their understanding of

the customers by creating intimate interactions through personalized
offers and messaging. The Best-in-Class are three times more likely than
their peers to personalize emails using advanced techniques; delivering
personalized product recommendations, profile information, purchase
behavior (for up-selling and cross-selling) or online behavior.
Forty-four percent (44%) of all organizations are still leveraging mass
email techniques and 37% personalize emails with nothing more than a
name. The top two challenges to email personalization include:
1. Gaining access to customer profile and behavioral information for use
in personalized emails (41% all respondents)
2. Creating personalized marketing content (45% of all respondents)
Fifty-percent (50%) of Best-in-Class companies use the information
collected within their customer profile database to personalize email
campaigns (the Best-in-Class are two times more likely to leverage a
customer database than Laggard organizations).
The Heart of Best-in-Class Email Personalization

Best-in-Class companies constantly learn from customer behavior and
more importantly from the information customers willingly provide
(through forms, surveys, and across customer channels like the call
center, customer service, etc.). Top performing organizations are 2.3-
times more likely than their peers to identify high value customers and
market to them uniquely over email. High value customers are not the
customers who have the highest sales. For the Best-in-Class, the high
value customers are the ones who willingly interact with the company
providing valuable feedback on how the company can meet their needs
most effectively; this in turn leads to repeated opportunities to sell to
these individuals at the right time and place.
Best-in-Class companies recognize that their customers have a choice;
and when they opt-in to being contacted by the company or take the
time to provide feedback, they become the most valuable customers the
company could ever have.
For Best-in-Class organizations, it's about more than an opt-in list, it's
about how their opt-in list wants to interact. Not everyone wants an
email every week or a promotion for a great deal every other week. The
Best-in-Class are constantly listening to find out how they can meet the
expectations of the organizations that willingly interact with the company
(through purchases, explicit information, etc). The heart of
personalization is the voice of the customer. Best-in-Class companies
listen to their customers and anticipate customer expectations. In return,
these customers remain loyal to the brand delivering the highest lifetime
value for Best-in-Class organizations.

Page 10
Chapter Two:
Benchmarking Requirements for Success
Best-in-Class companies are three-and-a-half times more likely than all other Fast Facts
organizations to personalize email campaigns using the information they √ 72% of Best-in-Class
collect on customer behavior, interactions, purchase history, and profiles. currently use or plan to use
This represents a significant finding as the Best-in-Class demonstrate event based triggers and
consistently higher performance in email click-throughs and conversion rules to automate email
rates (Figure 3 and Table 4). campaigns
√ 7% all respondents sent
Figure 3: Companies Currently Using Personalization mobile specific email
campaigns
66%
Light
71%
Personalization
66%
48%
Medium
39%
Personalization
34%
38%
Heavy
12%
Personalization
10%
0% 20% 40% 60% 80%
Laggard Average Best-in-Class

Table 4: Definition of Personalization

Key Scope
Light Same email goes to all prospects, prospect name is
Personalization personalized
Medium Email content is personalized by segment, prospect name is
Personalization personalized
Individual emails are personalized with name and/or other
Heavy
profile information, information on purchase history, product
Personalization
or service recommendations, etc.
Best-in-Class Segmentation Tactics

Best-in-Class companies heavily leverage their customer databases to
achieve superior performance. The Best-in-Class have processes to segment
and target customers based on behavior, demographics, and other
components. Best-in-Class companies also assign individual resources
accountable for maintaining the quality of customer data.

Page 11
The research suggests top performing organizations use a number of key

attributes to maximize performance in segmented email campaigns. Table 5
represents the top three attributes Best-in-Class companies use to create
more targeted, relevant, emails specifically for customer segments.
Table 5: Top Segmentation Attributes

Percent of Best-in-Class Using Attribute
Attribute
in Segmentation Email Campaigns
Promotional offers 41%
Product or service offers 36%
Demographic specific offer
35%
/ information
Measurable Benefits of Segmenting Customers in Email

By correlating the change in performance metrics after implementing
segmentation techniques and companies that currently leverage customer
segmentation in email campaigns (but, not personalized individual offers),
Aberdeen revealed the measurable benefits of segmentation techniques
realized by Best-in-Class companies. Table 6 demonstrates the measurable
impact of using segmentation techniques in email marketing campaigns.
Table 6: Best-in-Class Performance as a Result of Leveraging

Email Segmentation
Performance as Result of
Metrics Segmenting Customers
with Email Campaigns
Click-through rates Improved by 9%
Open rates Improved by 6%
Conversion rate Improved by 9%
Customer retention rates Improved by 5%
Opt-in rate Improved by 5%
Best-in-Class Advanced Personalization Tactics

The research revealed that Best-in-Class companies were three times more
likely to personalize emails on an individual basis than Industry Average and
Laggard organizations. The attributes in Table 7 represent the 10 most
common attributes used to personalize email campaigns on an individual
basis. As the list suggests, the Best-in-Class are well aligned to leverage a
host of attributes within their customer databases and business applications.

Page 12
Table 7: Top 10 Attributes Used by the Best-in-Class in

Personalized Emails
Attribute Percent of Best-in-Class Using
Attribute in Individual Emails
Prospect name 92%
Company name (B2B) 62%
Promotional offers 52%
Product or service offering 50%
Other profile information (state, email) 48%
Demographic 45%
Date of purchase activity 45%
Customer purchase history 43%
Customer behavior 37%
Email layout 37%
Measurable Benefits of Personalizing Email Campaigns

Best-in-Class organizations leverage a full scope of email tactics to
communicate with prospects; mass email (newsletters), segmentation, and
personalized individual emails. What is important to note is that the Best-in-
Class have the technology, processes, and data requirements necessary for
more advanced personalization tactics. However, analysis shows that all
parties that leverage more advanced email personalization benefit from
these capabilities.
Table 8 isolates the performance gains from companies that are leveraging
more advanced email personalization to individual prospects. These
companies are using one or more of the attributes in Table 7 top
personalize individual emails to customers and prospects. The research
shows that companies that send individual personalized emails to prospects
achieve the highest performance increases in key performance metrics after
incorporating these tactics into their email campaigns. Note: Table 8 depicts
performance improvements for all respondents, not just the Best-in-Class.
Table 8: Performance Variance after Personalizing Individual

Email Campaigns
Metrics Performance as Result of
Personalizing Individual Emails
Click-through rates Improved by 14%
Open rates Improved by 6%
Conversion rate Improved by 11%
Customer retention rates Improved by 8%
Opt-in rate Improved by 5%

Page 13
This research demonstrates the measurable impact of more advanced

personalization techniques. Organizations that are currently mass emailing
without any form of personalization are not maximizing their email
marketing dollars.
Case Study — West49
West49 Inc. is specialty retailer of apparel, footwear and accessories

related to skateboarding, snowboarding, and surfing. They operate over
115 stores under banners such as West49, Billabong, Off The Wall,
Amnesia/Arsenic, D-Tox, and an online presence under the domain name
www.boardzone.com.
West49 needed a way to increase in-store revenue with the tough to
reach Generation Y audience (individuals born between the years of 1982
and 1997). West49 was constrained by a cumbersome limited marketing
system that could only send one message to all customers with limited
personalization capabilities; it got the job done, but West49 needed a
better way to develop personalized relationships with their customers.
“E-mails were primarily distributed based on the province in which the
subscriber lived, rather than by the tastes and buying habits of the
person,” said, Brent Laderoute, advertising and creative director for
West49. "We really needed to start getting the right message to the right
customers. The company turned to an enterprise email marketing
provider to help segment, target, and personalize their outbound
campaigns in an effort to drive customers to their website and brick-and-
mortar stores.
West49 started by gathering information about customers. "As a unisex
retailer our goal was to get the right product information out to the right
subscribers, so the first step for us was to gather gender information
from our customers and then market the gender-specific products to the
right subscribers," said Laderoute.
Within the first three targeted email marketing campaigns the company
saw a 200% increase in click-through rates and growth in key metrics like
open rates and conversion. Personalization delivered immediate results
and helped West 49 deliver the right content to the right segment within
their email marketing list. But, West49 didn’t stop at simple demographic
segmentation, "We can go further than just gender segmentation and
send follow-up e-mails to our customers based on their interests, like
board hardware, clothes, or events."
The research reveals that Best-in-Class organizations have processes in
place to identify high value customers. For Best-in-Class organizations,
high value customers are not just the customers that purchase often,
they are the customers that articulate how they want the organization to
market to them through newsletters, products, website behavior, forms,
surveys, etc.
continued

Page 14
Case Study — West49
West49 highlights the importance of building a relationship with

customers through a customer loyalty program.
"When subscribers decide on what to opt-in for, they end up getting the
most relevant information, and at the same time, it helps us build on
customer communication and increase the different types of relevant
newsletters and alerts we can offer," said Laderoute.
Automation is paramount for marketing organizations. Technology helps
West49 save time and money by managing list maintenance issues
(double opt-in, deliverability, unsubscribes, etc.) Overall, West49
achieved an average of 15% higher open rates and dramatic increases in
conversion rates from campaign call-to-action. Most significantly, West49
achieved a 100% increase in revenues for loyalty program members.
Competitive Assessment
Aberdeen Group analyzed the aggregated metrics of surveyed companies to
determine whether their performance ranked as Best-in-Class, Industry
Average, or Laggard. In addition to having common performance levels, each
class also shared characteristics in five key categories: (1) process (the
approaches they take to improve email performance); (2) organization
(corporate focus and collaboration among stakeholders); (3) knowledge
management (contextualizing data and exposing it to key stakeholders);
(4) technology (the selection of appropriate tools and effective
deployment of those tools); and (5) performance management (the
ability of the organization to measure their results to improve their
business). These characteristics (identified in Table 9) serve as a guideline
for best practices, and correlate directly with Best-in-Class performance
across the key metrics.
Table 9: The Competitive Framework

Best-in-Class Average Laggards
Published rules and regulation governing who is allowed to
communicate to customers and prospects via email
67% 37% 31%
Processes in place to segment email lists for improved
Process message relevancy
53% 39% 23%
Processes in place to identify high value customers and
market to them uniquely over email
46% 25% 18%

Page 15
Best-in-Class Average Laggards

Individuals accountable for list quality and database
accuracy
56% 50% 41%
Organization
Email marketing manager is involved in conversations
about integrating web analytics and CRM
46% 33% 28%
Centralized database populated with multi-channel data
and used for email personalization
46% 31% 25%
Knowledge
Web analytics data used to segment lists and gain insight
on customer buying behavior
36% 34% 25%
Technology that supports email personalization:
85% email 83% email 75% email
marketing marketing marketing “We are constantly measuring
78% landing 75% landing 40% landing open rates, click throughs, form
page page page completion rates, landing page
Technology 57% form and 40% form and 34% form and effectiveness, and qualified leads
survey tools survey tools survey tools captured. These help us
determine the effectiveness of
49% segment- 36% segment- 20% segment-
marketing messages to our list
ation tools ation tools ation tools
segments.”
36% event 19% event 10% event
triggers / rules triggers / rules triggers / rules ~ Mark Rechner,
Track email campaign performance with landing pages Director, Marketing
Communications, Experient
79% 69% 38%
Performance
Measure and benchmark email campaign performance
74% 68% 44%
Capabilities and Enablers

Based on the findings of the Competitive Framework and interviews with
end users, Aberdeen uncovered some of the best practices that allow the
Best-in-Class to achieve the highest click-through rates, conversion rates,
and open rates.
Process
For many organizations, multiple parties are involved in sending outbound
email communications: internal marketing groups, agencies, sales,
operations, and sometimes channel partners. Without proper standards and
guidelines, these parties can inadvertently deliver inconsistent branding and
messaging. Best-in-Class companies are twice as likely as Laggards to
leverage formal, published rules and regulations governing the ownership
and delivery of email communications. More importantly, Best-in-Class
Page 16
companies demonstrate an aptitude for identifying and nurturing high-value

customers. High-value customers at Best-in-Class organizations are the
customers who are communicating with the organization. They may opt-in
to being contacted, fill out surveys, repeat purchases, etc. These customers
are the gems in the coal, because they are willing to help companies
understand how to interact with them. Best-in-Class companies listen to
their high-value customers by delivering unique marketing messages to
touch them personally, encouraging them to invest in the company brand
and an ongoing relationship with the company.
Organization
The number one Best-in-Class strategy for improving email personalization
involves integration between email, web analytics, CRM, and other
marketing technologies. The Best-in-Class are 60% more likely than Laggard
organizations to encourage email marketing managers to get involved with
integration discussions. For many organizations these individuals are focused
on marketing, messaging, and relevancy; not necessarily technology
integration discussions. Best-in-Class organizations reveal that the
individuals in charge of email marketing play an integral role in optimizing
and consistently improving the ability to deliver higher email click-through
and conversion rates. These individuals help understand which information
is worth integrating and why, saving time and resources around integration
efforts.
Additionally, the Best-in-Class assign accountability and ownership to data
quality efforts. The customer database is the core of all personalization
strategies. The Best-in-Class are 30% more likely than Laggards to ensure
someone within the organization is responsible for list quality and database
accuracy.
Knowledge Management
Personalization starts with a robust customer database. The Best-in-Class
are twice as likely as Laggard performers to maintain a centralized database
populated with multi-channel data; which is used for email personalization.
Multi-channel data is a critical component of Best-in-Class customer
databases. Organizations can only begin to truly understand customers
when they can anticipate behavior across multiple channels. This is how
Best-in-Class companies demonstrate superior performance with advanced
personalization techniques. The Best-in-Class use the data they collect on
customers to target and segment customers and to help understand
customer buying behavior. Best-in-Class organizations can articulate their
customers buying cycles in great detail and the email personalization
campaigns they deploy help nurture their customers and prospects along
this cycle. Best-in-Class capabilities and tactics revolve around the customer;
understanding the customer, helping the customer, and meeting the
customer's expectations. This is only possible with the support form a
centralized robust customer database.

Page 17
Technology
Email marketing technology adoption trends are almost identical among
Best-in-Class (85%), Industry Average (83%), and Laggard (75%)
organizations; yet these maturity classes achieve dramatically different
performance. The Best-in-Class are three-times more likely to personalize
emails by segmenting and delivering targeted content based on purchase
history, product recommendations, or user behavior. This level of
personalization requires segmentation tools, customer feedback tools and
the ability to measure and optimize performance (through landing pages).
Despite the fact that all organizations demonstrate similar adoption of email
marketing tools, Best-in-Class realize higher performance; an indication that
all of the capabilities outlined in Table 3 enable Best-in-Class performance.
Seventy-four percent (74%) of Best-in-Class organizations are using or
planning to use dynamic email message capabilities to leverage email
templates that are capable of delivering personalized content to individuals
based on user behavior or segmentation rules. Aberdeen research
consistently reveals that organizations are constantly looking for ways to
automate marketing processes. The Best-in-Class are four-times more likely
than Laggards to leverage an event trigger or rules engine on email
campaigns.
Performance Management
Email marketing requires constant optimization and measurement. Unlike
Laggards, Best-in-Class measure and refine marketing campaigns on an
ongoing basis. The number one tool Best-in-Class use to measure marketing
campaigns is a landing page (typically it's specific to the campaign and often
even specific to the segment or target group).
Figure 4: Currently Track Email Performance with a Landing Page

100%
80%
60%
40% 79% 69%
20% 38%
0%
Best-in-Class Average Laggard
Landing pages allow organizations to measure click-through rates on email

campaigns. The Best-in-Class are two-times more likely to track email
campaign performance with landing pages. Likewise, top performing
organizations measure and benchmark campaign performance to identify
commonalities in customer behavior, seasonal influences, customer
segments, cross-sell and up-sell initiatives, etc.

Page 18
The Best-in-Class are 68% more likely to measure and benchmark email
campaign performance. The most common metrics used by Best-in-Class
include:
• Open rate. The ratio between opened and sent emails. When
benchmarked over time, open rates represent a leading indicator of
message relevance and subject line effectiveness.
• Click through rate. The ratio between the number of clicked
links within the email and sent emails. This metric helps the Best-in-
Class determine the effectiveness of segmentation and targeting.
The Best-in-Class are 2.3 times more likely than Laggards to have
formalized processes in place to segment lists for improved message
relevancy and higher click through rates.
• Conversion rate. The number of individuals to react in a certain
way (consume information, fill out a form, purchase, etc.) over the
total number to receive the message. The maturity classes in this
research were defined by the sales conversion rates on email
campaigns. However, conversion can take on many forms. The Best-
in-Class pre-define measurement metrics prior to campaigns and
adjust campaigns in real-time based on performance.
• Click through / open rate. This is a measurement of campaign
success given the number of individuals who actually open the email.
This metric can provide insight on how the marketing message
actually resonates with individuals.
It's important to note, on average, approximately half of Laggards do not
measure any of the aforementioned metrics.
Aberdeen Insights — Technology
In the March 2008 study, The CMO Strategic Agenda: Automating Closed-
Loop Marketing , Aberdeen explored best practices in marketing
effectiveness and message relevancy. The study revealed that all
organizations are looking for ways to automate the process of delivering
more relevant messages to customers.
Dynamic content delivery, or dynamic message assembly, is an email
marketing technique / feature that allows marketers to create email
templates to deliver different, personalized emails to customers based on
specific customer preferences, behavior, demographics, segments, or
purchase history. With dynamic message assembly, organizations can
deliver extremely relevant emails that are personalized to individual
customer interests. Today, most if not all of the largest email marketing
technology providers have dynamic message assembly capabilities.
continued

Page 19
Aberdeen Insights — Technology
Given the market's strategic focus on automation and marketing

effectiveness, one might anticipate technologies like dynamic content
delivery would be popular. While the Best-in-Class are three times more
likely than Laggards to leverage dynamic message assembly (Figure 5),
adoption of these capabilities remains relatively low for two reasons:
1. Dynamic content is dependent on the level of granularity and detail
that exists in the customer database. The success and level of
personalization are contingent on a robust database which Industry
Average and Laggard organizations struggle to maintain.
2. Dynamic content capabilities are relatively new; requiring new skills
for marketers, and new technology adoption for many Industry
Average and Laggard organizations.
Figure 5: Use of Dynamic Message Delivery

100%
80%
59%
60%
81% 82%
40%
20% 36%
14% 12%
0%
Best-in-Class Industry Laggard
Average
Currently Use Planning on Using
Figure 5 demonstrates that all organizations are predisposed to

leveraging dynamic content in the future. Given the fact that the number
one challenge around email personalization stems from a difficulty
creating personalized content, dynamic message assembly will likely
represent a powerful tool in the marketing arsenal because marketers
can create single templates for email marketing campaigns and automate
personalization through technology.

Page 20
Chapter Three:
Required Actions
Whether a company is trying to move its performance in email marketing Fast Facts
from Laggard to Industry Average, or Industry Average to Best-in-Class, the √ 28% of Best-in-Class
following actions will help spur the necessary performance improvements: leverage marketing service
agencies to outsource one
or more email campaigns
Laggard Steps to Success (versus 5% of Laggards)
• Identify high value customers and communicate to them
√ The average order value
uniquely. High value customers are the customers who willingly
increased by 57% as a result
communicated with your company, through email, surveys, forms, of personalization - for all
and various other channels. High value customers will provide a organizations leveraging
wealth of implicit information about how to communicate with email personalization
them on their terms. This is the pinnacle of personalization; to techniques
create a personal relationship with these individuals.
• "Personalized" communication is not the same as
"personal" communication. Six in 10 organizations "personalize"
mass email campaigns using the customers name in the salutation of
the email; it's a "personalized" touch on a generic message. The
research proves that personalization (even with nothing more than
a name) leads to higher performance in click-through rates and
conversion. However, the highest performance, achieved by the
Best-in-Class, is attained by moving beyond personalized
communication and into the realm of "personal" communication.
More advanced email personalization techniques allow organizations
to market to individuals or segments based on the customers
individual needs, desires, and expectations. These techniques help
establish personal relationships between the customer and the
organization.
• Start segmenting and targeting customers. Laggard
organizations are equally as likely as the Best-in-Class to use light
personalization techniques in outgoing email campaigns. The
research proves that even simple segmentation of lists leads to
higher performance in click-through rates, open rates (with effective
subject lines), and conversion rates. Segmentation does not have to
involve advanced criteria or even a highly robust customer database.
Laggards can improve email campaign performance today by simply
segmenting their lists based on demographic region, products
purchased, or other attributes that already exist within the CRM or
marketing database.
Industry Average Steps to Success

• Formalize rules and regulations governing who is allowed
to communicate to customer and prospects via email.
These rules and regulations should be passed to all members of the
marketing and sales value chain (agencies, partners, sales, etc.). Best-
Page 21
in-Class companies are two times as likely as Industry Average and

Laggards to control email communications through standards and
regulations. It's important for organizations to maintain consistency
in how they interact with customers and to ensure partners,
agencies, and outside consultants also maintain this same
consistency when email campaigns are outsourced.
• Watch out for pitfalls. Over 50% of Industry Average companies “The challenge with email
personalization lies in the data.
recognize the need to maximize data effectiveness by focusing
It’s essential to make sure you
initiatives on collecting and cleansing customer data. The customer use quality data in
database is the foundation for any personalization initiative. While personalization. You certainly
personalization can rapidly enhance email campaign performance don’t want to send emails to
rates, it can just as rapidly erode customer loyalty. The following people using the wrong name
pitfalls are common among all organizations that currently or messaging that won’t
personalize email campaigns: resonate with them.”
o Using the wrong name or a misspelled name. ~ Mark Rechner,
Inaccurate personalized data can negatively impact email Director, Marketing
performance. This highlights the lack of knowledge the Communications, Experient
company has about the customer and can erode the
customer's perception of the company, the brand, or the
products - even if the copy is extremely personalized.
o Consistency in the formatting of mail-merge text. It
is best practice to capitalize the first letter of customer
names in the salutation. Best-in-Class companies have tools
or individuals assigned to scrub and cleanse data to maintain
data quality from all data collection sources (online, forms,
list purchases, etc.)
o Sending the wrong offer due to inaccurate database
information. Be careful about making assumptions based
on implicit data such as user behavior. Computers can be
used by family or friends so it's important to use
personalized attributes that have been collected from
reputable sources and that can be tied directly to an
individual. Best-in-Class practices include collecting online
behavior from individuals after they have logged-in or
registered on a website.
• Use dynamic message assembly to automate email
personalization efforts. Dynamic message assembly is a more
advanced form of the same mail-merge technique used to insert a
person's name in the salutation of an email. Best-in-Class are three
times as likely to leverage dynamic content than both Laggards and
Industry Average companies. Industry Average organizations have
the technological capabilities to leverage dynamic content.
However, Industry Average companies indicate that a lack of
technical or email expertise prevents them from using more
advanced email personalization tools. Industry Average
organizations without email expertise should consult an email
service provider or seek professional services to help get the ball
Page 22
rolling on implementing dynamic content in email. The performance

gains realized by Best-in-Class are a clear indication that it is worth
the effort.
Best-in-Class Steps to Success

• Use dynamic content capabilities. Seventy percent (70%) of “You need to focus on being
Best-in-Class companies still don't leverage dynamic content relevant; getting the right
capabilities. Automation reduces the complexity of personalizing message to the right person is
emails. In addition, dynamic content uses easy to use and maintain essential."
templates which can be repurposed saving production costs and
~ Brent Laderoute, Director of
time to market on email campaigns. Dynamic content helps the
Advertising, West49
Best-in-Class continue to maximize the return on email marketing
campaigns.
• Continue to leverage event based triggers and rules to
automate email campaigns. Thirty-six percent (36%) of Best-in-
Class companies leverage event triggers to automate email
communications with customers. Event triggers can be used to
deliver targeted follow-up messages automatically based on
customer behavior. The challenge for the Best-in-Class is developing
customized marketing content to use in various event based
triggers. However, considering that only 10% of the lowest
performing organizations actually leverage this technology, there is a
good indication that event based triggers play an integral role in
helping Best-in-Class companies create personalized relationships
with customers and prospects.
• Use web analytics to help identify commonalities in
customer behavior for segmenting and targeting. Web
activity can be a leading indicator for how customers might react to
marketing messages across other channels. Prior Aberdeen research
revealed that many large retail organizations use web activity to
optimize cross-sell and up-sell opportunities in brick-and-mortar
locations. Web analytics help Best-in-Class organizations further
segment lists to continue increasing click-through rates by delivering
increasingly relevant messages to customers.
Email is the most cost effective, profitable, channel for both B2C and B2B
organizations. Best-practices in email personalization demand that
organizations stop trying to dictate the messages they deliver to customers
and start trying to understand exactly which messages their customers
actually want to hear. The goal is to improve the lifetime value of the
customer through a personal relationship between the customer and the
company.

Page 23
Aberdeen Insights — Summary
Email personalization techniques are relatively new to the market, and

leveraging these techniques will require investments in training and
technology. The research unequivocally demonstrates that email
personalization (even at the most basic levels) plays a critical role in
delivering superior email marketing campaign performance.
All organizations surveyed recognize the value of personalization. They
also realize the essential role customer data plays in attaining Best-in-
Class performance. As a result, all respondents have initiatives in place to
both consolidate and cleanse customer data before implementing more
advanced personalization techniques. The Best-in-Class are still early
adopters of highly personalized techniques and technologies; however,
their performance is a clear indication that we will continue to see rapid
adoption of more advanced capabilities like dynamic message assembly
within top performing organizations.

Page 24
Appendix A:
Research Methodology
Between May and June 2008, Aberdeen examined the use, the experiences, Study Focus
and the intentions of 551 enterprises using email marketing in a diverse set
of enterprises and industries. Responding executives
completed an online survey
Aberdeen supplemented this online survey effort with interviews with select that included questions
survey respondents, gathering additional information on email designed to determine the
personalization strategies, experiences, and results. following:
Responding enterprises included the following: √ The degree to which email

personalization impacts email
• Job title / function: The research sample included respondents with campaign performance
the following job titles: marketing (49%); business development
√ Best practices in email
(27%); sales (10%); IT manager or staff (4%); other (10%); senior personalization
management (34%); director (17%); and manager (21%).
√ The benefits, if any, that have
• Industry: The research sample included respondents from: retail been derived from using
(17%); software / hardware (9%); IT consulting (8%); publishing and email personalization
media (3%); finance (3%); other (17%); and small percentages across
all other industries The study aimed to identify
emerging best practices for
• Geography: The majority of respondents (75%) were from North personalizing email campaigns
America. Remaining respondents were from the Asia-Pacific region and to provide a framework by
(7%) and Europe (18%). which readers could assess
their own management
• Company size: Seventeen percent (17%) of respondents were from capabilities.
large enterprises (annual revenues above US $1 billion); 15% were
from midsize enterprises (annual revenues between $50 million and
$1 billion); and 68% of respondents were from small businesses
(annual revenues of $50 million or less).
• Headcount: Eleven percent (11%) of respondents were from large
enterprises (headcount greater than 1,000 employees); 24% were
from midsize enterprises (headcount between 100 and 999
employees); and 65% of respondents were from small businesses
(headcount between 1 and 99 employees).
Solution providers recognized as sponsors were solicited after the fact and
had no substantive influence on the direction of this report. Their
sponsorship has made it possible for Aberdeen Group to make these
findings available to readers at no charge.

Page 25
Table 10: The PACE Framework Key

Overview
Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities,
and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as
follows:
Pressures — external forces that impact an organization’s market position, competitiveness, or business
operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive)
Actions — the strategic approaches that an organization takes in response to industry pressures (e.g., align the
corporate business model to leverage industry opportunities, such as product / service strategy, target markets,
financial strategy, go-to-market, and sales strategy)
Capabilities — the business process competencies required to execute corporate strategy (e.g., skilled people,
brand, market positioning, viable products / services, ecosystem partners, financing)
Enablers — the key functionality of technology solutions required to support the organization’s enabling business
practices (e.g., development platform, applications, network connectivity, user interface, training and support,
partner interfaces, data cleansing, and management)
Table 11: The Competitive Framework Key

Overview
The Aberdeen Competitive Framework defines enterprises In the following categories:

as falling into one of the following three levels of practices Process — What is the scope of process
and performance: standardization? What is the efficiency and
Best-in-Class (20%) — Practices that are the best effectiveness of this process?
currently being employed and are significantly superior to Organization — How is your company currently
the Industry Average, and result in the top industry organized to manage and optimize this particular
performance. process?
Industry Average (50%) — Practices that represent the Knowledge — What visibility do you have into key
average or norm, and result in average industry data and intelligence required to manage this process?
performance. Technology — What level of automation have you
Laggards (30%) — Practices that are significantly behind used to support this process? How is this automation
the average of the industry, and result in below average integrated and aligned?
performance. Performance — What do you measure? How
frequently? What’s your actual performance?
Table 12: The Relationship Between PACE and the Competitive Framework
PACE and the Competitive Framework – How They Interact
Aberdeen research indicates that companies that identify the most influential pressures and take the most
transformational and effective actions are most likely to achieve superior performance. The level of competitive
performance that a company achieves is strongly determined by the PACE choices that they make and how well they
execute those decisions.

Page 26
Appendix B:
Related Aberdeen Research
Information on Aberdeen publications can be found at www.Aberdeen.com.
Author: Aberdeen Group
Since 1988, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having
benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide
organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why
our research is relied on by more than 2.2 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of
the Technology 500.
As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted
marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-
Hanks (Information – Opportunity – Insight – Engagement – Interaction) extends the client value and accentuates the
strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com
or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com
This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies
provide for objective fact-based research and represent the best analysis available at the time of publication. Unless
otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be
reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by
Aberdeen Group, Inc. 043008a


4904 RR Email Marketing

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

4904 RR Email Marketing

Uploaded by

Copyright:

Available Formats

Email Marketing:

Get Personal with Your Customers

Competitive Maturity Assessment

© 2008 Aberdeen Group. Telephone: 617 854 5200

© 2008 Aberdeen Group. Telephone: 617 854 5200

Table 10: The PACE Framework Key ....................................................................25

© 2008 Aberdeen Group. Telephone: 617 854 5200

Table 1: Personalization Trends- All Respondents

Source: Aberdeen Group, June 2008

Heavy personalization techniques allow organizations to develop highly

© 2008 Aberdeen Group. Telephone: 617 854 5200

Top Challenges to Email Personalization

Figure 1: Top Challenges to Email Personalization- All

Source: Aberdeen Group, June 2008

The Maturity Class Framework

© 2008 Aberdeen Group. Telephone: 617 854 5200

Table 2: Top Performers Earn Best-in-Class Status

The Best-in-Class PACE Model

Table 3: The Best-in-Class PACE Framework

© 2008 Aberdeen Group. Telephone: 617 854 5200

The top pressure driving all organizations to focus on email personalization

Figure 2: Strategies to Support Email Personalization

Best-in-Class Average Laggard

Best-in-Class companies achieve superior performance because they focus

Aberdeen Insights — Strategy

In order to increase revenue, organizations need to truly understand

© 2008 Aberdeen Group. Telephone: 617 854 5200

Aberdeen Insights — Strategy

More importantly, the Best-in-Class demonstrate their understanding of

The Heart of Best-in-Class Email Personalization

© 2008 Aberdeen Group. Telephone: 617 854 5200

0% 20% 40% 60% 80%

Laggard Average Best-in-Class

Table 4: Definition of Personalization

Best-in-Class Segmentation Tactics

© 2008 Aberdeen Group. Telephone: 617 854 5200

The research suggests top performing organizations use a number of key

Table 5: Top Segmentation Attributes

Measurable Benefits of Segmenting Customers in Email

Table 6: Best-in-Class Performance as a Result of Leveraging

Best-in-Class Advanced Personalization Tactics

© 2008 Aberdeen Group. Telephone: 617 854 5200

Table 7: Top 10 Attributes Used by the Best-in-Class in

Measurable Benefits of Personalizing Email Campaigns

Table 8: Performance Variance after Personalizing Individual

© 2008 Aberdeen Group. Telephone: 617 854 5200

This research demonstrates the measurable impact of more advanced

Case Study — West49

West49 Inc. is specialty retailer of apparel, footwear and accessories

© 2008 Aberdeen Group. Telephone: 617 854 5200

Case Study — West49

West49 highlights the importance of building a relationship with

Table 9: The Competitive Framework

© 2008 Aberdeen Group. Telephone: 617 854 5200

Best-in-Class Average Laggards

Capabilities and Enablers

companies demonstrate an aptitude for identifying and nurturing high-value

© 2008 Aberdeen Group. Telephone: 617 854 5200

Figure 4: Currently Track Email Performance with a Landing Page

Source: Aberdeen Group, June 2008

Landing pages allow organizations to measure click-through rates on email

© 2008 Aberdeen Group. Telephone: 617 854 5200

Aberdeen Insights — Technology

© 2008 Aberdeen Group. Telephone: 617 854 5200