October 07, 2014

Case Study

Email Marketing: First-time cart abandonment campaign drives a conversion rate 1,858% higher than weekly send

SUMMARY: With a change in focus from B2B to retail, Custom Service Hardware decided to implement its first automated email campaigns — a cart abandonment campaign, a welcome campaign and a post-purchase series.

Through these steps toward automation, the team wanted to focus on customer-centric sends and recoup revenue that previously was being left on the table.

by Courtney Eckerle, Manager of Editorial Content

CHALLENGE

Founded in 1977, Custom Service Hardware has primarily been a wholesaler to the building, remodeling and woodworking industries. Over the past three years, the company has changed from its traditional B2B focus to a retail focus, according to Tim Stepanski, Marketing Manager, Custom Service Hardware.

"As far as from a marketing point, we have always been, for lack of a better phrase, more of a mom-and-pop company," he said, adding that when he came in four years ago, he tried to mix up tactics to create a structured marketing program.

Where they have seen the greatest change is in updating their website and matching it with current ecommerce efforts.

"We built a much better website to showcase our products, and through that, we've added a much better form of ecommerce as far as email marketing," Stepanski said, adding that they have utilized email marketing to reach out to the retail sector.

"Print is an expensive way to market. Although we still use our catalog, because of our contractors that utilize our company still like to have a catalog in hand, we recognize that as with all businesses, ecommerce is the way to go these days," he said.

As Custom Service Hardware has grown its list, "email has been a huge portion of our business. Then through that, we're able to notice that many people that have come to our website will put things in a cart and then eventually abandon [it]," Stepanski said.

CAMPAIGN

When the new website for Custom Service Hardware was set up, ecommerce was at just under a 2% conversion rate. The goal, Stepanski said, was to get that up to a 3.5% conversion for all visits.

"The biggest area we saw for improvement was recouping abandoned carts," he said, adding that the company had never run a cart abandonment campaign before.

"The revenue was left on the table. We didn't have an email platform [that had automation] up until the beginning of this year when we switched over," he said.

After the success of the cart abandonment campaign, Stepanski decided to implement a welcome series and a post-purchase series as well.

Step #1. Create the cart abandonment campaign

The cart abandonment campaign was a three step process, according to Stepanski.

When a customer abandons their cart, they immediately receive an email. The first email includes an incentive of 5% off the order and reads:

Thank you for shopping with Custom Service Hardware. We are confident we can help you find the product you are looking for and are offering you 5% off your purchase. You shopping cart is waiting for you. Simply click on Review My Cart below and enter code RETURN2 to receive your 5% off discount. If there is anything we can do to help you complete your order, please give us a call at (800) 882-0009. Hurry, this code expires seven days from receipt of this email.

The second email is sent seven business days later and is a reminder that the coupon is about to expire. It gives the opportunity for customers to give feedback. It asks questions such as:

Is there any other reason for your abandoned cart we could help you with? Couldn't find the product you were looking for? Pricing? Shipping? Website issues? If there is anything we can do to help you complete your order please give us a call at (800) 882-0009.

On the day the coupon is going to expire, which is two weeks from the initial email, the customers get a third email saying, "This is your final chance."

Out of all the campaigns implemented, the cart abandonment campaign has "given us the biggest bang for our buck," Stepanski said.

Insert customer-centric elements

Stepanski said the second email of the cart abandonment series is purposefully focused on customer-centric elements and that the reminder about the coupon is secondary.

"We do it more to gather information as well," he said, adding that "this has actually helped us … to find out what customers are actually looking for and to make sure that we're carrying what customers are looking for. So it really helps us to make sure that we have the right product on the shelves."

The goal was to make customer service an easy-to-reach destination for the consumer. This was achieved by placing the customer service number in the emails as well as having replies for the emails go directly "to our customer service department, which is me. So I see the response and then we work on it," Stepanski said.

It doesn't take up too much of his time, he said, adding that it's mostly a matter of thanking the customer for their feedback and figuring out the most direct way to help them, either through email or by taking an order over the phone.

"When you do something like that, then you're also gaining a customer for life because they're seeing that you're going to go out of the way. You're not just looking at them as a statistic," he said.

Step #3. Create an email welcome series

The welcome series is made up of two emails and has been the second largest performer, Stepanski said.

Once onto the Custom Service Hardware website, a pop up invites customers to join the email list in exchange for a 5% off coupon code.

The first email says, "Welcome to CSH" and reminds customers of the 5% off coupon code by displaying different product categories. It also supplies the customer service number in case someone wants to order over the phone or has questions.

Seven business days later, customers receive a second email that says, "Did you know that … " and speaks more about the different products offered as well as more about the company. It also offers a 10% off coupon on their first order.

Often, Stepanski said, people come to the website through Google AdWords pay-per-click, so "they're looking for a specific product, but they don't realize everything we have out there that we offer. So we're able to use the emails as an opportunity to showcase all the different product categories."

From the welcome series, people are put into the regular email blast, which goes out once a week, twice a week in the case of a special offer or announcement.

Step #4. Send a post-purchase series

Immediately after a customer makes a purchase, a first email goes out, thanking them and inviting them to come back for a second visit with an offer for 10% off that expires seven days after the email send.

Five business days after that, a second message is sent out saying, "Did you know?" and describes Custom Service Hardware's position as the leading U.S. manufacturer of several products.

"But what we do is we have a dollar amount. So this time it's not just a discount, but it's we want [them] to order over $50, just so we cannot just keep throwing out bones but making certain we're getting something in return, and it's not hard to make a $50 order with us," Stepanski said.

The $50 minimum threshold has proven to be important, he added, since the conversion rate for the second email is 408% higher than the average email, jumping up from the 162% conversion rate on the first email.

Recently, Stepanski decided to add a third email to the series, which reminds customers that it is the final day to take advantage of the discount.

According to him, "what we're looking for is to have a repeat customer, a customer with more than one invoice … although we've hit the retail sector, we want that retail sector to keep purchasing from us."

RESULTS

Four years ago, ecommerce accounted for about 4% of total business, but currently, it accounts for closer to 20%, Stepanski said, adding that a lot of the growth can be attributed to the focus on serving the customer through email marketing.

"What I've learned is the importance of engaging the customer … there's so many websites out there that don't even look at the other person. They look at the person on the other end as a credit card, and they don't look at them as a person that's making decisions," he said.

His takeaway from implementing these campaigns is that helping the customer through their decision process is the most important aspect of email marketing.

After only five months of the cart abandonment campaign, $97,000 in revenue has been recouped.

"Our goal was to recoup 25% of lost revenue to abandoned products in our first six months. We're at 33% now, so we're well above the goal that we wanted," he said.

Cart abandonment campaign

Email #1

Open rate: 58.7%

Clickthrough: 37.6%

Conversion rate: 36.6%

Email #2

Open rate: 40.9%

Clickthrough rate: 22.2%

Conversion rate: 100%

Post-purchase campaign

Post Purchase #1

Open rate: 48%

Clickthrough rate: 6.8%

Conversion rate: 14.6%

Post Purchase #2

Open rate: 33.8%

Clickthrough rate: 10.1%

Conversion rate: 20%

Post Purchase #3

Open rate: 42%

Clickthrough rate: 29%

Conversion rate: 43%

Welcome campaign

Welcome #1

Open rate: 50.5%

Clickthrough: 33.6%

Conversion rate: 5.5%

Welcome #2

Open rate: 39.8%

Clickthrough rate: 22.3%

Conversion rate: 8.7%

Welcome #3

Open rate: 48%

Clickthrough rate: 39%

Conversion rate: 10.4%

In the two-part post purchase series, compared to a normal email, the conversion rate for the first email was 162% higher. The second email had a 408% higher conversion rate.

The conversion rate for the cart abandonment campaign is 1,858% higher than that of their regular emails. The first email of the welcome campaign is yielding a conversion rate that is 35% higher, and the second email is 358% higher.

"We want to make their process easy for [our customers], but we also want it to be something where they're going to want to come back. So we're also trying to build a loyal customer, as we are a company that is loyal to that customer," he said.