Many Web marketers and digital merchants are content sending bulk emails to their entire list simultaneously, hoping they hit the mark with a portion of their audience. But implementing even a little bit of segmenting provides — in no uncertain terms — a higher return on investment (ROI.)
Forrester Research and the National Retail Foundation’s Shop.org found the average cost per order from an email marketing campaign was $6.85, compared with $12.27 for affiliate marketing and $19.32 for paid search. This lower cost, resulting in a higher ROI, is what drives merchants to email marketing. But while 92 percent of retailers use email marketing, only 58 percent of Internet retailers segment based on customer purchase history and stated customer preferences — in spite of 67 percent considering the practice “very effective.”
Even in light of higher open rates, order values, click-through rates and conversions, email marketers are still not tapping the full potential of segmentation and list filtering. The reason might be because of the complexity of the task, and rightfully so. Behavior-based segmentation, trigger based segmentation and lifecycle segmentation are all time-consuming and financial and resource intensive projects. Even the mere concepts of these practices can scare away many merchants. But the reward of using even the most basic segmentation is very high.
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