Presentation delivered by Brian Peck of AP42 at the Bishop Ranch B2B Seminar on July 17, 2012. For a copy of the slides, please contact info@ap42.com or visit http://www.ap42.com/

1. Masters of New Marketing

2. email
marketing Getting It Just Right

3. email
trend #1
Email Fatigue

4. email
trend #2
Highly Measurable

5. email
trend #2
Social Media
Integration

6. email
marketing An Analytic Overview

7. advantages
of email
‣Cost effective to produce
‣Ease of use
‣Ease of storage (both message and contacts)
‣Fast
‣Great information tracking for better understanding
of entire dynamic (forwarding, open rate, responses)

8. drawbacks
of email
‣Inbox Clutter/TMI
‣Somewhat impersonal
‣Viewed as spam if not relevant
!
‣Compact/Short: email is built for brevity

9. email
math Tools of the Trade

10. email math
& definitions
Bounce Rate
The percentage of total emails sent that could not be delivered
to the recipient’s inbox.
Delivery Rate
The percentage of emails that were actually delivered to
recipients’ inboxes, calculated by subtracting bounces from the
gross number of emails sent, then dividing that number by gross
emails sent. 95% is an acceptable standard.
Conversion Rate
The percentage of recipients who clicked on a link within an
email and completed a desired action, such as filling out a lead
generation form or purchasing a product.
Email Forwarding/Share Rate
Percent of recipients who clicked on the Share or Forward button

11. email math
& definitions
Click-Through Rate (CTR)
The percentage of email recipients who click on a link within the email.
Can be measured using either number of unique clicks or total number
of clicks.
Revenue/Piece
‣ Total Order Dollars/Total # of Pieces emailed
‣ Combines both RR and AOS {(RR/100) x AOS} = $/Piece.
‣ $/M (Dollars per Thousand Sent)
Open Rate
Percent of recipients who open email.
Unsubscribe Rate
Percent of recipients who unsubscribe.

12. types of
marketing email
Acquisition or Revenue
Designed to elicit a lead gen or a purchase.
Customer Loyalty
Designed to build relationship with recipient (i.e.,
Newsletter).
Win Back/Reactivation
Special offers targeted to lapsed customers.

13. SEGMENTATION AND TARGETED MARKETING

14. What doesn’t work: Treating all customers alike
80% 79.67%
60%
40%
24.82%
20% 15.83%
1.52%
0%
20%
21.83%
40%
5% 11% 28% 28% 28%

15. marketing to
customer segments
Your Best Customers - Spend Service
80% of Revenue GOLD Dollars Here
Your Best Hope for Move up Spend Marketing
New Gold Customers Dollars Here
1% of Total Revenue These may be Losers Reactivate or Archive

16. segmentation
methods
Need to rank customers/prospects
from best to worst:
RFM: Recency, Frequency, Monetary Value
Modeling: Regression Analysis, Log Linear Regression
AID/CHAID Analysis: Tree Analysis, Pattern Recognition
Buyer Groups: Based on product groups

17. customer management
& contact strategy
‣Objective is to generate incremental sales and profit.
‣There is a dual emphasis on the profitability of each event and
the lifetime value of specific customer segments.
‣Short term strategies emphasize the current bottom line.
‣Lifetime value is tied into multi-year, long term strategies.

18. why
model/target
Modeling/Segmentation will allow you to:
‣Maximize ROI capability
‣Increase LTV
‣Help you to define inactive customers
‣Create different messages to different file segments
(Best Buyers vs. Reactivation Messaging)
‣Manage your business with more intelligence

19. SINGLE CONTACT EVENT

20. NO SEGMENTATION
Segments Qty $/M Total
Segment 1 10,000 $15,000 $150,000
Segment 2 10,000 $15,000 $150,000
Segment 3 10,000 $15,000 $150,000
Segment 4 10,000 $15,000 $150,000
Segment 5 10,000 $15,000 $150,000
TOTAL 50,000 $15,000 $750,000
RR = 1.5%, AOS = $100

21. SEGMENTED CUSTOMERS
Segments Qty $/M Total
Top 20% 10,000 $25,000 $250,000
21 - 40% 10,000 $20,000 $200,000
41% - 60% 10,000 $15,000 $150,000
61 - 81% 10,000 $10,000 $100,000
81 - 100% 10,000 $5,000 $50,000
TOTAL 50,000 $15,000 $750,000
RR = 1.5%, AOS = $100

22. CONTACT STRATEGY ACROSS MULTIPLE EVENTS

23. strategic
advantages
‣Segmentation yields its greatest dividends when it is applied
across multiple customer events
‣Allows you to plan a long term, integrated messaging
campaign based on specific customer targets
‣By using this information, you can invest smarter (Time,
Resources, Capital). More investment with your better/best
customers and adjusted, less investment on your less active
customers
‣A contact strategy test design can tell you in a very
systematic way, what are the more profitable strategies

24. CONTROL GROUP MONTH
Segments 1 2 3 4 5 Total
Top 20% X X X 3
21 - 40% X X X 3
41 - 60% X X X 3
61 - 80% X X X 3
81 - 100% X X X 3
TEST DESIGN
TOTAL 5 0 5 0 5 15
TEST 1 MONTH
Segments 1 2 3 4 5 Total
Top 20% X X X X X 5
21 - 40% X X X X 4
41 - 60% X X X 3
61 - 80% X X 2
81 - 100% X 1
TOTAL 5 2 3 1 4 15
TEST 2 MONTH
Segments 1 2 3 4 5 Total
Top 20% X X X X X 5
21 - 40% X X X X X 5
41 - 60% X X X X 4
61 - 80% X X X 3
81 - 100% X 1
TOTAL 5 3 4 2 4 18
Segment Qty = 10,000

25. CONTROL GROUP MONTH
Segments 1 2 3 4 5 Ave. RR
Top 20% 1.50% 1.30% 1.20% 1.33%
21 - 40% 1.20% 1.10% 1.00% 1.10%
RESPONSE RESULT
41 - 60% 1.00% .95% .90% .95%
61 - 80% .80% .70% .60% .70%
81 - 100% .70% .60% .40% .57%
AVE. 1.04% .93% .82% .93%
TEST 1 MONTH
Segments 1 2 3 4 5 Ave. RR
Top 20% 1.40%% 1.00% 1.10% 1.00% 1.10% 1.12%
21 - 40% 1.10% .90% 1.00% 1.00% 1.00%
41 - 60% 1.00% .95% .90% .95%
61 - 80% .80% .60% .70%
81 - 100% .70% .70%
AVE. 1.00% .95% 1.02% 1.00% .90% .89%
TEST 2 MONTH
Segments 1 2 3 4 5 Ave. RR
Top 20% 1.40% 1.00% 1.10% 1.00% 1.10% 1.12%
21 - 40% 1.10% .90% .85% .80% .95% .92%
41 - 60% .90% .80% .85% .90% .86%
61 - 80% .80% .70% .60% .70%
81 - 100% .70% .70%
AVE. .98% .90% .88% .90% .89% .86%
Segment Qty = 10,000

26. CONTROL GROUP
MONTH
Segments 1 2 3 4 5 Total
Top 20% 150 130 120 400
21 - 40% 120 110 100 330
41 - 60% 100 95 90 285
61 - 80% 80 70 60 210
81 - 100% 70 60 40 170
TOTAL 520 465 410 1,395
Test Results:
Total dollars for 50M test quantity = AOS ($100) x 1,395 = $139,500
Rollout Estimation:
Rollout quantity = 1,000,000 customer records. (20 times test qty.)
Estimated total dollars to rollout strategy = 20 x $139,500 = $2,790,000

27. TEST GROUP 1
MONTH
Segments 1 2 3 4 5 Total
Top 20% 140 100 110 100 110 560
21 - 40% 110 90 100 100 400
41 - 60% 100 95 90 285
61 - 80% 80 60 140
81 - 100% 70 70
TOTAL 500 190 305 100 360 1,455
Test Results:
Total dollars for 50M test quantity = AOS ($100) x 1,455 = $145,500
Rollout Estimation:
Rollout quantity = 1,000,000 customer records. (20 times test qty.)
Estimated total dollars to rollout strategy = 20 x $145,500 = $2,910,000
Increase in estimated sales of $120,000 (4.3%) for same number of
reallocated emails.

28. TEST GROUP 2
MONTH
Segments 1 2 3 4 5 Total
Top 20% 140 100 110 100 110 560
21 - 40% 110 90 95 80 95 470
41 - 60% 90 80 85 90 345
61 - 80% 80 70 60 210
81 - 100% 70 70
TOTAL 490 270 360 180 355 1,655
Test Results:
Total dollars for 50M test quantity = AOS ($100) x 1,655 = $165,500
Rollout Estimation:
Rollout quantity = 1,000,000 customer records. (20 times test qty.)
Estimated total dollars to rollout strategy = 20 x $165,500 = $3,310,000
Increase in estimated sales of $520,000 (18.6%) with additional &
reallocated emails

29. email & social media
strategies
‣Determine where your customers are on social
networks, what they are sharing, what they are
saying.
‣Identify key influencers and tag them on your
customer database.
‣Treat them as ‘special customers’, like you should be
treating your best customers.
‣Offer them special deals/promotions, advanced
previews of products, invitations to store events, etc.
‣Monitor their reaction in the social media.

30. Which marketing tactics have the best ROI in your company?
(Top 10 Only)
Source: DMA National Client Email Report; 144 respondents; May 2012
70% 67%
60%
50%
38% 37%
40%
30%
20% 19%
16% 15%
13%
10% 12%
11% 11%
0%
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31. Which marketing tactics do you believe create enduring and
profitable customer relationships? (Top 10)
Source: DMA National Client Email Report; 144 respondents; May 2012
80%
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32. Masters of New Marketing