How PayPal uses Segmentation and Personalization in Email Marketing to Drive Customer Retention

September 4, 2020
Financial Services

More does not always mean better, get a glimpse into how the payment giant differentiates itself with email marketing.

In April 2020, PayPal saw a +17% increase in email web traffic despite sending -46% fewer emails that month.

They would then continue to see stable email web traffic over the next 6 months even as they steadily increased email send volume (average +22% monthly).

By August 2020, the email sends volume was only +8% more than in April but email web traffic was +19% higher, showing that higher email sends volume does not always translate into higher email web traffic.

Rather than relying on sending more emails to get more email web traffic, PayPal heavily segments and customizes their campaigns, with send volumes of less than 1% of their total list each month.

In August, PayPal sent out 7 different email campaigns on the same day, each with varying subject lines and content and send volumes under 250K.

Examples of best practices that PayPal deployed for this particular send include…

For Mother’s Day, PayPal sent our 4 identical Mother’s Day emails to different audiences, with the only difference being the subject lines.

Although unrelated to segmenting, a unique feature in PayPal’s more general emails the inclusive of a prominent “reset password” call to action. The “forgot password” feature is likely a popular site function for non-frequent users of PayPal; as such, to lessen the barrier of re-engaging users to use their service, PayPal conveniently places a “reset password” CTA in their emails to encourage users to login.

What Brands Should Be Thinking About

Send emails frequently, but in small batches: While PayPal may send email campaign volumes under 1% of their total email list size, they are sending out multiple email batches in a day, sometimes up to 10+ emails.

Monitor reader email reading behaviour: Aside from segmenting customers by usage behaviour, PayPal also identifies segments of customers who respond well to varying lengths of email. This can be done by seeing how frequently a CTA/link is clicked on near the bottom of the email (to identify who has read the full email).

A/B testing subject lines: Even with identical email content, PayPal A/B tests their subject lines, which helps inform their future email subject line crafting. As seen in the examples, slight language changes can make a large difference in read rates.

Turn popular site links into email CTAs: PayPal identified their “reset password” page as one of their most frequently visited and used that information to help lessen the barrier for non-frequent PayPal users to re-engage with their platform by creating a CTA that goes at the bottom of general emails. Consider turning popular pages of your website into CTAs or icons at the bottom of your emails for quick access.

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