Email Marketing: 142% higher open rate, 15% bigger list from retailer's strategy

SUMMARY: Successful email marketing does not come from a single tactic or campaign. It has many parts, each working in concert to win more customers.

This retailer uses a holistic approach. Its email list grew 15% last year, and emails delivered on the right days see 142% higher open rates. In this article, you’ll see how the team at KooKoo Bear Kids uses iPads to build the list, how it segments the audience and why data and testing are so important.

by Adam Sutton, Senior Reporter

Ask Joe Mediate the key to his team’s success, and he will say there isn’t one. He is CMO of KooKoo Bear Kids, a children’s furniture and décor retailer. His team does not rely on one-off tactics.

"You can’t just do one thing and expect that’s going to be your savior," he said.

KooKoo Bear has several locations in Greater Atlanta. It also sells online, but its emails typically drive people to a brick-and-mortar store, he said. The team sends custom messages to segmented lists, and the audience consists mostly of females ages 21 to 35.

"It is critical to try to understand the customer better and better," he said.

The team’s program has grown every year since its inception. The four parts of its email strategy have made that possible.

Part #1. Build the list creatively

KooKoo Bear earns subscribers through word of mouth and by asking customers to sign up in places such as:

In stores during checkout

Online during checkout

On most pages of its website, near the footer

These conventional tactics and others helped KooKoo Bear grow its list 3% in 2009. By 2010, the team’s emails were more targeted and growth increased to 7% for the year. It continued to increase, hitting 15% for all of last year, as the team tried newer tactics like the one described below.

Digital signup in stores

One of the team’s newer tactics allows customers to opt in for emails in stores by using an iPad near the register.

"In every one of our stores, we have an iPad and you can sign up right there," Mediate said. "You don’t have to fill out a little piece of paper. Since we’ve done that, every single year our email database has grown."

The iPads are kept in plain view of the customers as they check out. Cashiers ask customers if they would like to sign up to receive coupons and specials. Using the device for this task has several benefits:

Customers use a popular device, which adds to the appeal of signing up.

Customers do not have to say or spell embarrassing email addresses they may have created years ago.

KooKoo Bear does not have to manually enter email addresses at the register or from a slip of paper.

"I know $500 is a lot of money just to grab some emails. But if you think about it, if you make a couple of sales, who cares?" Mediate said.

Part #2. Leverage segmentation and automation

Prior to joining KooKoo Bear, Mediate founded and sold a software company. Having a firm grasp of technology and its power, he has applied that understanding to KooKoo Bear’s email marketing.

The team developed a simple algorithm in-house to automatically segment email subscribers into groups based on products of interest, such as:

Furniture

Bedding

Accessories

Wall art

Lighting

The algorithm also predicts the gender and age group of the child for whom the person is shopping. It weighs multiple data points to make these decisions:

Browsing behavior — the time spent in a portion of the website, as well as number of pages viewed help determine the products of interest.

Purchase behavior — the type of products a customer buys is another strong signal.

Source — even how the person first encounters KooKoo Bear is factored into the decision. For example, customers who discover the site through a search engine and enter on a product page can be added to the segment the product falls under.

The team applies and makes use of its segmentation immediately, beginning with customized welcome emails. People will continue to receive tailored messages for the duration of their time as a subscriber.

"It sounds so simple. It’s really hard to implement because you have to have all different types of creative based on landing pages that they leave and come in on," Mediate said.

Series of automated emails

Mediate’s team knows many customers buy products in a sequence. For example, a customer who buys a crib will likely soon need crib bedding. A customer who bought bedding might shop for accessories or wall art.

Knowing this pattern, the team has automated a series of 15 emails including relevant offers as well as educational content about crib bedding and other products.

"If they’re buying a crib, they’re probably going to have a baby shower. We need to tell them about our baby shower registry, so we’ll send that as well," Mediate said.

Part #3. Think strategy, not tactics

Here are four components of the team’s marketing strategy and how email fits into the puzzle:

Find fresh prospects

Every email marketer knows the importance of building a database. Lists are constantly shrinking from opt-outs and disinterest, so marketers have to keep fresh bodies in the program. This is especially true of KooKoo Bear since its customers eventually outgrow its products.

"Kids become 9 and 10 and then they’re not interested in our stuff anymore," Mediate said. "We always have to fill the funnel because we’re losing people as they go through the cycle."

The team uses mostly advertising to fill its marketing funnel. The ads are gauged to reach new audiences, raise awareness, drive site traffic and get new shoppers into KooKoo Bear’s stores.

Channels the team use include:

Billboards

Television

Radio

Online display

Make an impression

Once a new shopper reaches KooKoo Bear’s website, or one of its stores, it’s up to the team to make a good impression. One of the company’s differentiators is its sense of style and the fact it hires professional interior designers.

Two ways to make a good impression are:

1. Strong in-store experience

KooKoo Bear’s customers do not look for the lowest price, Mediate explained. Instead, they’re more concerned with style and quality. The team designs the interior of its stores and provides exceptional customer care to set itself apart.

"When they come in the store, you better have a good store," Mediate said. "We really do a good job of helping people decorate, giving them ideas on decorating the room, the wall color, the fabric choices. That’s what they really appreciate. I know that’s not really unique in the marketplace, but it’s unique in the baby and kids space."

2. Product staging online

Outside of stores, the team strives to make a good impression on its website by demonstrating KooKoo Bear’s selection, quality, and sense of style.

For example, visitors can browse "designer nursery rooms" and bedrooms from the homepage. Each room is furnished with products, and the price, name and image of each is listed below this image on the page.

Build a relationship

The next task for the marketing team is to earn the respect of shoppers and build relationships.

"I’ve got this interested group of people. They’re not ready to buy yet, but they’re interested," Mediate said.

KooKoo Bear uses display ad retargeting to help stay in touch, but email marketing plays a larger role in the relationship. The team sends weekly emails with offers, promotions and information about new products and trends.

The team segments its email list and customizes messages across a variety of factors. This helps KooKoo Bear speak to the needs of each subscriber and deliver a relevant message to build a stronger relationship.

"Obviously, we try not to send a new mom a bunk bed email. We’d send her the baby-related email … so now she feels we understand her needs," Mediate said.

Keep the customer

The goal of building this relationship is to win a customer, but the strategy does not end there. The team’s marketing adjusts to retain customers after they buy. This is done in part by offering a loyalty program and VIP offers via email, Mediate explained.

The team also helps hold onto email customers by:

1. Limiting frequency

The team tests its email frequency to get the best results without smothering subscribers. It typically sends one email each week, which is enough to continue the relationship, Mediate said.

2. Staying relevant

The team’s in-house technology predicts what some customers will buy and when. This, as well as the segmentation strategy mentioned earlier, helps KooKoo Bear deliver relevant information that keeps customers opening and reading its emails.

"It really is the behavioral segmentation that makes it unique. You see your clickthrough rates and open rates go way up, because it’s relevant," he said.

Part #4. Collect data and always test

KooKoo Bear began investing in email around 2008, when the price of selling products via catalogue became a burden. The team began tracking data at the program’s foundation.

"Every campaign, we keep it in a piece of software we wrote. It tells us the open rate, the clickthrough rates and what we’re offering," Mediate said. "If you don’t set it up today, you won’t have data tomorrow, and you won’t have data the next year or the next year."

KooKoo Bear’s data powers its segmentation, automation and testing. Here are two insights the team discovered through its testing:

Measure by quarter

Most marketers test email variations over the course of a week or month, Mediate said. His team monitors tests for at least a quarter.

"We test between 90 days and six months," he said.

Each part of the team’s permanent strategy was originally tested over at least three months of data, Mediate said. This helps the team avoid making poor decisions based on data skewed by seasonality.

For example, the team could test a new promotional strategy for the second week in December and see results much higher than average. However, since that is a peak time of year, results are expected to be above average anyway. How would the team know if the test caused the increase or if it was seasonality?

By running tests and monitoring their results for at least three months, the team can understand if a test consistently increases results, regardless of seasonality.

"Make sure you’re testing through your season," Mediate said.

Frequency

Testing on a seasonal calendar helped the team discover insights for email timing and frequency. For example, the team’s test showed:

Sending once every five to seven days "is the magic number for us," Mediate said. However, that is only for most of the year. During the holidays, the team can send emails every two days without affecting the open rate, which yields higher results overall.

Emails sent on Thursday or Friday consistently perform higher than emails sent on Monday or the weekend. Thursday emails have an average 11.5% open rate, Fridays have 12.1% and Mondays have roughly 5%.

One exception to this trend is when the team sends a national campaign (one targeted to driving online sales across the country rather than in-store sales in Greater Atlanta). Open rates are higher for these campaigns when sent on Sundays and Mondays, Mediate said.