Welcome to the third in our series “The Sum of the Parts,” in which consultant Rob Galkoff discusses the elements critical to successful e-mail marketing.
Last time we talked about the reasons to capture data (“The Sum of the Parts, Part 2: Why Capture Data” ); this week I’m going to talk about sources of data.
My first question is, do you measure the response rates of your different data pools, or do you just lump them together and look at the bottom line? I think I know the answer most of you will give here—lumping them all together—and I’m often guilty of making the same mistake.
We all know that each source of data will give a different response rate. Some will provide phenomenal response; others will leave you wringing your hands.
I work with a men’s tailoring specialist. It has a partner company, not a direct competitor but a very similar business, with which it swapped some e-mail and catalog data. The catalog data worked okay, but suddenly the e-mail response rates dropped like the proverbial stone. The problem was that the partner’s data was nowhere near as strong as the tailoring specialist’s own data. We accept this in the offline direct marketing world, but we don’t always think about it in the online environment—probably because sending e-mail is cheap.
So let’s take a step back. We need to ensure that the data we use work hard. Otherwise, why use these names? The cost associated with recruiting e-mail data is much higher than the cost of actually using the data. And this is the important part of this discussion: Don’t spend loads of money on data that don’t work. There isn’t a prize for having the biggest database.
A colleague and I came up with the diagram below to help us work out how we turn data into sales (the original line drawing has steak sauce all over it from a great dinner in New York!).
The most important thing to look at today is the “sales funnel.” This is where data—prospective names for your e-mail database—start hitting your Website. Where are the names coming from? Here are some likely sources:
1) pay-per-click advertising, including banners. We all use PPC to help get our brand in front of customers who are directly or indirectly searching for the goods, services, or brands we sell. The traffic this sort of advertising normally brings in is pretty good, as respondents are specifically searching for something associated with your business.
2) search engine optimization. The aim is to get as high up the natural search as possible. Again, the consumers who come across these searches are pretty hot and should convert well.
3) competitions. Offering prizes to collect data can yield good results. But when using this method, you’ll also get a huge amount of useless data from competition junkies who are not and never will be interested in buying from you. The key is to make the prize highly relevant to your brand in order to attract people with a genuine interest.
4) affiliates. People who come to your Website via affiliates are generally looking for a deal or a discount. Nonetheless, they can become real customers who make real purchases, so they do have a value. But you might need to e-mail them offers in order to get them to buy again.
5) third parties. It’s very difficult to make third-party data work. Remember my example above: We swapped some names and e-mailed them offers. As those consumers had never signed up to receive our specific e-mails, their response rates were really low. The chances are you’ll get the most out of these names the first few times you use them.
6) purchased data. I normally try to avoid buying data, but for certain niches it might work. I have one client that sells car parts. In the UK, we can buy car-insurance data where we could find out the customer’s location (proximity to store), vehicle, and age of vehicle (to specifically target appropriate products at them). We’ve not tried it yet, but we believe it could work.
7) surveys. As with competitions, you often just get people filling in the survey because they get a kick from it and want the reward. I’ve found survey data to work well provided the survey is branded with the company’s name so that prospects know what they’re signing up for.
Don’t forget about the customers who are not brand loyal and want to buy something there and then. They might sign up for your newsletter as part of the buying or investigative process, but they might not be interested in purchasing from you in the future.
How hard has your marketing activity been working delivering customers and prospects to your Website? Once they arrive at the site, the next big job is to capture their e-mail address so that you can carry on communicating with them. Once you have their e-mail address, provided they’ve opted in, you can start e-mailing them directly. But you need to segment the data to get the best return from it—and that’s what we’ll talk about this next time.
Don’t forget to drop me an e-mail (rob@thebusinessconsultants.co.uk) if you have any questions or comments.
Rob Galkoff is CEO of the Business Consultants. He was previously marketing director at multititle UK mailer Findel.
