November 03, 2006
Case Study
SUMMARY:
It's not hard to realize that shoppers interested in bed sheets may also want pillowcases. But it's another story to decipher what kind of bigger purchase customers will be inclined to make next in terms of what's in your inventory.
Discover how one retailer made four budget-conscious automated email programs thrive by mixing in a healthy dose of Web analytics.
Yes, includes how-to tips, creative samples and results data:
|
|
CHALLENGE
“The more refined you get in direct marketing, the more work there is,” says Dan Schutzman, Marketing VP at SmartBargains.com LP. “If we had to do all of our email marketing manually, we’d produce about 30 different emails a day, and that’d be cost-prohibitive.”
Indeed, Schutzman and his team were charged with developing budget-conscious programs that could act as auxiliaries to the company’s successful Bargain Alert loyalty newsletter. But they got “trigger happy” and ended up achieving much more.
CAMPAIGN
For 15 months, Schutzman tested four customer-retention email systems entirely manageable on the back end:
Email #1. “Next-sells”
Shutzman’s team designed the next-sell email to spark significant repeat purchases. These emails are more sophisticated than cross-sell and up-sell programs, which usually push lower-ticket impulse add-ons.
The email refers to customers by name and uses recent purchase data with subject lines, such as, “A Great Deal Exclusively for Bedding Shoppers.”
“There is also a bit of customer service positioning in the idea because we are expressing that we hope they’ve enjoyed the recent purchase,” Schutzman says.
Here’s how the next-sell program works:
1. SmartBargains.com waited seven days before sending the email to give customers time to receive their purchases and avoid appearing overanxious.
2. It didn’t matter whether an order was placed after the first next-sell – a new follow-up offer was sent every two weeks for a total of three messages.
3. Since other email efforts existed, they set rules so customers didn’t receive two offers on the same day.
4. In the case of irregular-but-major promotions, such as holiday campaigns, they implemented a system to determine which email had overriding relevancy on that particular day.
5. Based on in-house research, next-sells were emailed at 8 a.m. Fridays EST.
SmartBargains.com’s in-house Web analytics department triggered cross-departmental product offers. Those offerings were based on the changing number of customer segments that the patron fell into.
“We do statistical analysis that allows us to determine the major drivers for next purchase in terms of different departments and categories,” Schutzman says. “It was a new type of customer rationale that we wanted to look into.”
Email #2. Buyer’s Picks
Schutzman’s team used a top navigation bar in all of their emails, but they particularly took advantage of the feature in the Web analytics sense with the Buyer’s Picks program.
If a recipient clicked on an individual department but didn’t end up purchasing, an email went out two days later offering items from that category. Example: non-buyers clicking on Home Furnishings received an email with eight photo-laden offers (desk lamps, mantle clocks, designer rugs, etc.).
Email #3. 28th-day follow-up
If a first-time customer didn’t make a second purchase within the next 28 days, Schutzman’s team emailed a discount offer (usually around 10%) to encourage repeats and loyalty.
The messages wisely took a preemptive measure with this call to action: “William, don’t miss a deal! Add SmartBargains@Deals.SmartBargains.com to your address book.”
“Once we are in the customers’ address books, we are less likely to end up being mistakenly filtered into their junk folder,” Schutzman says.
Email #4. Up-sell in the order receipt
While sending order confirmation, SmartBargains.com tested a last-chance-on-limited-items up-sell email with the product appearing in the right-hand column. Although there’s no discount, the tactic echoed the Buyer’s Picks program in that the up-sell items hailed from the same department as the already ordered product.
“It’s not as refined as some of the other [triggers], but it’s not intended to be,” Schutzman says. “In case the person wants to make another purchase, the email simply gives them an easy way to do it while reviewing their most recent transaction.”
RESULTS
All four programs have turned out to be winners. Activity-based, trigger-driven campaigns are worth badgering the boss about in terms of budgeting in a system that meshes analytics with email, Schutzman advises.
“We were beyond pleasantly surprised when we got the sales results that we did in the first test,” he says. “In any kind of test, you are normally hoping for success within a certain range, and this certainly far exceeded our expectations. And that was one of the first areas that we were doing tests in terms of higher degrees of relevancy.”
When compared to the Bargain Alert emails, the next-sell program achieved a 51% jump in average-order dollars. “In some cases, they bought more items than normal,” Schutzman says. “In other instances, they purchased fewer items that were more expensive.”
Also, the opt-out rate for the next-sells was noticeably lower than their regular email.
The Buyer’s Picks and 28th-day emails produced a double-digit sales increase when compared to Bargain Alert messages. Testing showed that two days was the right amount of time before reminding customers of their interest in a product department.
“One day later they still might be in a buying-decision mode,” Schutzman notes about the Buyer’s Picks emails. “We don’t want to appear to be aggressive because that’s not what we do. By the same token, we have to be timely.”
Useful links related to this article
Creative samples of SmartBargain’s email program: http://www.marketingsherpa.com/cs/smartbargain/study.html
e-Dialog - SmartBargains.com’s email marketing provider
http://www.e-dialog.com
SmartBargains.com
http://www.SmartBargains.com
