August 07, 2012

Case Study

E-commerce Email Relevance: 10% more revenue from 3 personalization tactics

SUMMARY: Every email marketer wants to increase relevance, whether through timing, content or segmentation. The e-commerce marketers in this article push for one-to-one relevance. They send personalized content to individual subscribers and get great results.

We describe three tactics that increased revenue by more than 10% across the company’s campaigns. You’ll see how the marketers weaved each tactic -- such as customized display ads and abandoned cart follow-ups -- into the strategy and their results.

by Adam T. Sutton, Senior Reporter

"Relevance" is a central principle of email marketing, and its definition has changed through the years.

Early on, marketers focused on frequency and timing, working to send the right number of emails at the right times. Later, segmentation emerged, and marketers tailored content to suit different groups. Then, list hygiene came and cut inactive subscribers.

The next step is one-to-one personalization, says Erick Barney, VP of Marketing at Motorcycle Superstore, an e-commerce site for motorcycle gear and accessories.

"Any increased amount of relevancy is a plus," Barney says. "We’ve had really good success with personalization."

Motorcycle Superstore’s personalization goes well beyond adding first names to a greeting. Subscribers receive offers that are targeted to their individual shopping and browsing behaviors. The results have been great, Barney says, especially since this refinement is in addition to the team’s segmentation strategy.

"We continue to strengthen and improve our segments, and at the same time, we work to improve personalization. We feel strongly that the two just compound on top of each other and multiply the benefits."

Below, we describe the top three one-to-one personalization tactics Motorcycle Store uses to increase relevance and results.

Tactic #1. Target content to search behavior

Motorcycle Superstore keeps a close eye on the search phrases visitors use in its on-site search tool. It also tracks the phrases visitors use to find the site through search engines. These phrases reveal a person’s products of interest.

The search tool automatically sends this data to the store’s email marketing software. Any subscribers who recently searched the site are tagged with a product or product category related to the phrase.

Customize display ads

The team leverages this data in marketing emails by including what Barney calls a "widget." The widget can be used to create email ads that display products related to the subscribers’ recent searches. The ads can take several forms:

Vertical banner ad with several products

Horizontal banner ad with several products

Button ad with a single product

The team can also tweak the ads, such as show only products that are on sale. The ads are automatically removed from emails sent to subscribers who have not searched the site in more than seven days.

Don’t make it weird

Some subscribers might be "creeped out" by seeing email ads for products they browsed more than five days ago. Instead of hoping people won’t notice or remember (which is doomed to fail), Barney’s team is upfront in the ads’ messaging.

"We will just say, ‘we’ve got what you’re looking for.’"

More relevant than guesses

A common question Barney gets about the ads: "Why would you want to promote products that people already found?" The answer, Barney says, is that most visitors do not convert.

"There is a certain percentage of people who convert the first time, whether it’s 5%, 8% or 10%," he says. "You still have more than 90% of those people who didn’t convert. This is another opportunity for showing them the products they expressed an interest in."

And, the ads are very effective. When they’re included in an email, average results include

43% CTR on the email, a 30% increase over the team’s standard emails and

13% more revenue than standard emails.

"Response rates are definitely above and beyond what normal response rates would be for hand-picked products that we think people would be interested in," Barney says.

Tactic #2. Target content based on past purchases

Motorcycles are expensive. People hold onto them for years, sometimes decades. If Barney’s team knows which bike a subscriber owns, then it has another powerful way to improve email relevance.

This tactic is often used to promote motorcycle parts, a category in which Barney’s team has "a big push to increase sales," he says. The store’s bike parts category page requests three pieces of information:

Make

Model

Year

When subscribers visit the page and find a motorcycle, the bike is automatically assigned to them in the database. If they access a second or third bike, then the most recent one is used.

Another data point

This gives Barney’s team another piece of information to personalize content and offers. The team creates personalized email ads that feature subscribers’ motorcycles and related parts. The team has also sent dedicated emails to encourage people to visit the parts page and find their bikes.

"What we have learned is to quickly get them to their individual bikes. That is where we see the strongest conversion," Barney says.

Fits customer culture

Not only do motorcyclists tend to hold onto their bikes, but they tend to customize them. This tactic fits the culture’s sense of individuality by offering specific upgrades that fit each person’s bike.

"You can imagine if you get a new bike and you land on a page that has hundreds of options to upgrade it, it’s is like a virtual candy store," Barney says.

Results are good

This tactic is "absolutely earning more parts sales," Barney says. Here are the average results for emails that include a "your bike" ad:

39% CTR, a 18% increase over the team’s standard emails

14% more revenue than standard emails

Tactic #3. Target abandoned shopping carts

Like many e-commerce sites, Motorcycle Superstore has seen tremendous results from automated emails that reach customers who abandoned items in a shopping cart.

"We found a really high success rate in remarketing to that behavior, and we’ve tried several different strategies around that," Barney says.

Several years ago, the team batched the names of subscribers who left items in the cart, and manually emailed them a few weeks later. Today, the emails are automatically and immediately sent to subscribers who visit the site, add products to the cart, and leave without buying.

Here are a few design points of the cart-abandonment email:

Include all items – subscribers see the images and titles of the products they left behind.

Clear calls-to-action – orange buttons at the top of the message (under the header navigation) and end of the message (just above the footer) ask subscribers to "view cart." Clicking one of the buttons brings people back to the cart where the items are waiting for them.

Emphasize free shipping – shipping and handling charges can weigh on conversion rates. The end of this email reminds subscribers that orders over $89 ship free.

Subject line – "Hey [first name], did you forget something?"

Headline – "The gear you left behind needs a good home."

RESULTS

Cart abandonment emails have been a boon to many e-commerce sites, including Motorcycle Superstore. Barney’s team has achieved great results (all results are averaged):

52% open rate, more than three times higher than the team’s standard emails

49% clickthrough rate, 48% higher than standard emails

7% conversion rate, more than three times higher than standard emails

20% higher average order value than standard emails

73% lower unsubscribe rate than standard emails