The value of segmentation in e-mail marketing

Fifty-five percent of 300 senior marketing executives fail to segment customers for their e-mail communications and use the same e-mail communication for their entire databases.

It's difficult to believe, but according to a recent study by Return Path (e-mail intelligence provider) and The Relevancy Group (data-driven marketing research group), only 23% of e-mail marketers analyse competitors' e-mail marketing campaign performance, despite research indicating a 25% uplift in revenue by doing so.

In today's data-fuelled marketing environment, it's even more surprising to learn that marketers were unaware of their inbox placement rate. By now, marketers understand the importance of e-mail in their overall marketing strategies. According to the MarketingSherpa 2012 Email Marketing Benchmark Report, 32% of marketers say segmenting their e-mail databases is one of their organisations' top objectives in the next 12 months. Furthermore, 52% of marketers say they have a great need to improve e-mail database segmentation.

So why the disconnect? According to the study, the barrier lies with data quality. "Sixty-five percent of e-mail marketers say access to the right data is a challenge and almost a third do not know where to access that data for campaign evaluation purposes," the study revealed.

Effective segmentation depends on the quality of the data leveraged in the campaign. Incorrect or duplicated data causes lower responses, fewer leads and lower sales. High-quality, well-integrated customer data is the cornerstone of a successful e-mail campaign and the key achieving several critical benefits - such as conversion optimisation, increased open rates and greater e-mail relevance.

Julian Ardagh, CEO of Effective Intelligence, explains: "If marketers do not have access to analytics tools that improve data, quality biases can creep into the decision-making processes." He said: "Poor data quality results in inefficient processes that affect the ability of marketers to respond and market effectively, thereby affecting revenue and market share."

The advantage of a solutions provider that offers data services and data analytics can enhance and improve all aspects of customer and operational business data. Ardagh said: "We often wonder how clients manage without our data tools, missing out on huge opportunities and staying stuck in conventional thinking."

In the wake of other emerging marketing tactics like social media, marketers have realised that e-mail marketing is here to stay and the importance of segmentation in their e-mail communications will make all the difference in achieving better results. Segmentation enables marketers to engage in more personalised and relevant cross-channel interactions, and the more relevant the campaign, the greater the conversions. Segmentation goes a long way in improving your e-mail deliverability and online reputation and provides a much higher ROI than other online or mobile channels.

If you are still unsure about e-mail segmentation, consider these findings by Marketing software provider Hubspot: "Thirty-nine percent of e-mail marketers that practice list segmentation see better open rates; 28% see lower opt-out and unsubscribe rates; and 24% see better e-mail deliverability, increased sales leads, and greater revenue."