Behavioural Targeting

Targeting

Sean Hargrave, NMA magazine, 14.02.08

The days of sending the same email to all customers are gone. Now eCRM is about segmenting prospects and tailoring messages dynamically.

Email marketing is set to have a bumper year in 2008 as eight out of ten marketers look to increase spend on the channel, according to latest figures from the Direct Marketing Association. This means marketers will be looking to become increasingly sophisticated in the way they manage the whole cycle of communication with their customers.

Among those increasing spend on email year, there's a near-even split between those who say the money will be diverted from other channels and those who say it will be new money. Funds are being shifted towards eCRM as marketers improve their lists (the average company only has email addresses for half its customer database). Those already heavily involved are showing that simply moving from direct mail to email is not enough.

Consumers are now very web savvy and are turned off by impersonal mass mailouts. To be successful, the attention being focused on eCRM this year will need to be directed at purchases, not just measuring open or click-through rates.

Email marketers that are leading the way are segmenting their databases so emails are made more relevant for their recipients, according to eCRM analyst Clive Longbottom, service director at Quocirca. The accepted wisdom that it costs 15 times as much to gain a new customer as it does to sell to an existing one is concentrating marketers' minds on asking their customers pertinent questions, so that those databases can be brought up to date and customers put into more closely defined groups.

Splitting your audience

Once a database has been brought up to date and customers placed into appropriate segments, the task of using the improved data-bases comes into focus.

Improvements in lists and eCRM services from agencies and software vendors are proving a boon for Philip Maskell, MD of Essex Auto Group, which runs showrooms for car manufacturers including Fiat, Ford and Mazda. He says that being able to target particular audiences with focused messages is what any retailer wants.

Spreading downwards

SMEs moving into eCRM is one of the industry's quiet revolutions, according to Clint Oram, VP of open-source community relations at eCRM software supplier Sugar. It used to be the preserve of those with enterprise-level budgets, he says, but the internet has enabled companies of all sizes to participate

Among the enterprise-level clients that have used eCRM systems for years, the way forward is to move beyond segmented lists and ending what many in the industry refer to as the 'silo mentality', where lists reside in separate departments and are never shared. Prime offenders are FMCGs whose many brands rarely cross-sell.

This mixing and matching of brands as well as delivery channels, allowing lists to be shared and applied to mobile as well as email, is where eCRM is heading, agrees Jon Pollard, head of operations at Mighty Mouse Digital, which is behind Virgin Atlantic's Flying Club groups.

In the near-term future for eCRM will be to update and segment lists and provide users with individually tailored offers, while the medium or longer-term future would appear to be found in letting different departments' lists be combined and applied not just for email but also mobile.

To summarise:

• Eight out of ten marketers will be increasing eCRM spend this year, according to the DMA
• Half of these will be shifting funds from other channels, mostly direct mail and press advertising.
• Marketers are personalising messages as well as segmenting lists so that messages are made relevant to core customer groups.
• ECRM is no longer the preserve of enterprises. Affordable software is allowing SMEs to launch campaigns as well.
• The challenge ahead for enterprises is to manage huge lists and share them among their different brands