You'd think that to get half of your subscribers to click through, you might have to give away a million dollars every month.

Publishers Clearing House (PCH) actually does give away millions of dollars, but that wasn't enough on its own to earn a significantly higher-than-average response rate on its email promotions.

However, by managing data and segmentation, and finding the customer sweet spot, PCH has been able to consistently earn approximately 40% click-through rates. (Yes, click-through rates, and that is a percent of sent volume, not of opens.)

The good news is that even if you don't give away money in large piles, you can still do what PCH did to earn incredible lift on your email-marketing response rates.

It's simple: If you want superior response rates, you have to provide a superior subscriber experience. And that means…

1. Keeping your file clean. Source data well, and clear out dead wood early and often.
2. Watching frequency.
3. Improving the content and relevancy through segmentation and content management.
4. Responding to subscriber behavior, as well as self-selected preferences.

"We thought we were doing OK segmentation before, but we knew that we were not synergizing channels as much as we could nor really listening to customer data," says PCH Senior Director Sal Tripi. "So, we made a big investment, and we targeted not just the offers, but at the customer level. We saw a pretty immediate 15%–20% lift in click-through rates."

Two things were essential to success, Tripi says. The first was integrating the offline and online databases. It was a miserable and time-consuming six-month process, he reports. That won't surprise anyone who has ever tried to get data in a mainframe database to talk to Web analytics and email-marketing systems.

The second key to success was focusing on the customer. PCH created more than 100 segments and matched frequency, content, and contest information to each persona. The segments are created via a weighted matrix of subscription source, vintage (date of signup), geography, activity level, type of contest (e.g., instant win vs. lotto), and last activity.

"We built an API [application programming interface] from the internal system to our email broadcast vendor, e-Dialog, where the data is segmented and matched to the personas provided by PCH," Tripi says. "They process about 7.2 billion pieces of data each night, generating a daily list from which we execute our batch campaigns."

Tripi acknowledges the intense work needed to get such high results—click-through rates are routinely 35%–50% per mailing and holding steady since the launch of the segmentation project. Yet PCH still dreams even bigger. "Wouldn't it be great to do stuff in real time on our website, too? Today we have achieved a lot using targeted mailings, but we want micro-targeting to get to the micro-affinity level and offer a custom path for each visitor.

"Ah," he sighs, with a combination of resignation and optimism. "It's nearly in reach!"

Back on the ground in today's operation, all those happier subscribers means happier advertisers, too, he adds. "We can now offer advertisers a much more targeted experience. Since our file is large and active, we have [a] significant quantity of active users in each segment."

There were concerns internally about reducing the size of the mailing list. But with the support of an open-minded executive team, PCH removes nonresponsive subscribers at the 90-day mark, which is quite aggressive and results in a one-tenth of a percent drop every day (about a 3% drop every month).

However, that is a great way to ensure solid list hygiene and help maintain a strong sender reputation so that messages continue to reach the inbox. PCH learned, as many other marketers have, that the size of a file is not nearly as important as the number of its active subscribers.

"The increase in response rates more than makes up for it," Tripi says. "By nurturing subscribers so they stay active longer, and by promoting our highest-margin products early in the relationship to the right group of people, we've more than made up for the slightly smaller file size—by a multiple of about 10."

In a case story that is music to the ears of legitimate marketers everywhere, Tripi has found that doing well by customers does well for the bottom line.

"This approach let us find the sweet spot for the customer—connecting them with the content and offers that make the most sense for them," he says.

"It sounds so basic, but it was a major undertaking—and one that our customers have validated."

Here's how all marketers can benefit from PCH's success:

• Segment even in wide cuts (e.g., new subscribers vs. longtime customers or customers vs. prospects) to improve relevancy, reduce complaints, and improve inbox placement and response rates
• Remove nonactive subscribers from the file. Such a painful discipline will be rewarded in higher response rates, higher inbox placement, and higher lifetime value for those who do find your products and services valuable.
• Customize content and subject lines as much as possible, even if it's only to move more relevant content to the headline.