Kick Your E-mail Campaigns Into High Gear

If one of your New Year’s resolutions is to boost response from your opt-in e-mail marketing campaigns, you’re not alone. Many multichannel marketers are chanting the same mantra — and with good reason.

E-mail click-to-purchase conversion rates and number of orders per e-mail delivered by retailers and catalogers continues to increase, according to DoubleClick’s Q3 2004 E-mail Trend Report. But other e-mail marketing statistics are less encouraging.

For instance, revenue per e-mail delivered is declining, as is median order size. Moreover, open rates for offers made by retail and catalog companies were the lowest among those categories tracked by DoubleClick — 30.8 percent in the third quarter.

And clickthrough rates among retailers/catalogers declined from 8.8 percent in the third quarter of 2003, to 5.6 percent in the same quarter in 2004, for a 36.4 percent decline.

DoubleClick officials say the behavior of e-mail recipients appears to be changing, perhaps maturing along with the medium itself. “Recipients seem less likely to always click on a promotional e-mail, but when they do click, they’re demonstrating that they’re more likely to be ‘in market’ for products and services, and have a higher propensity to convert,” said DoubleClick officials in a Dec. 6, 2004, release.

So how can you boost your opt-in e-mail campaigns? Following are some tactics to try.

Segment Your E-mail Housefile

Like any effective direct marketing campaign, the goal is to make offers that are relevant to recipients. One proven tactic: Segment your customer list and deliver offers appropriate to each segment.

That’s what Andrea Vitale, vice president of direct marketing at 1-800-Flowers.com, is doing. Her team devises customer communications based on recency. That is, customers who’ve purchased in the past 12 months get a different message from those who haven’t bought in more than a year. Gift-givers get an altogether different message, one that reminds them of their last purchase and suggests similar merchandise. Vitale says those customers “probably are our highest-responding” group because of the relevancy of the offers being made.

Loren McDonald, vice president of marketing at e-mail service provider EmailLabs in Redwood City, Calif., notes three common ways to segment an e-mail housefile:

Demographics. But look beyond mere gender and geography, he says. Track the ISP the recipient uses. “AOL users will act differently with your e-mails than others,” McDonald explains. You also want to know how each customer came onto your file, whether through your retail channel, catalog, search engine, referral, etc. “Where did your relationship with that customer begin? That information will tell you a lot about the customer,” he notes.

Preferences and Psychographics. When registering customers for your e-mail list, ask for more than just a name, city and state, McDonald advises. Ask for their interests.

For example, if you sell winter sports equipment, you know that snowboarders, downhill skiers and cross-country skiers have different interests and buy different items. You wouldn’t expect many snowboarders to open an e-mail with a subject-line offer for a 20-percent discount on Rossignol downhill skis, right? Even though you may have a similar offer on snowboards within that e-mail, how many snowboarders do you reasonably think will even open the e-mail with a subject line touting downhill skis? That’s why it’s best to segment and send different e-mail offers and campaigns to different people based on their interests, says McDonald.

Behavior, such as open rates, clickthrough rates and past purchases. “For those segments that haven’t opened your e-mails in six months, is it the offers, the subject lines, what is the problem?” asks McDonald rhetorically. “Perhaps you need more promotional offers to those folks, or you need more aggressive offers in subject lines. You must figure all of that out.”

Petco.com, a client of e-mail service provider (ESP) Responsys, instituted a series of segmented offers based on purchase history and buying patters. Termed “Fetch My Sales,” the campaign included: a series of triggered e-mails promoting accessories and replenishment products; viral marketing opportunities; and e-mail messages sent to remind customers of their pets’ birthdays and to promote special offers and products.

According to Responsys, “Fetch My Sales” recorded a more than 300 percent increase in clickthroughs and a 335 percent boost in incremental revenue. And the pet birthday component of the campaign generated 159 percent higher clickthroughs and 123 percent higher conversions. Responsys also reported that 17 percent of Petco.com’s new purchasers continued to shop online, and about half of the converters had not previously purchased online.

“Pet owners can log on to our Web site, fill out profile data, and are instantly e-mailed special targeted offers for their pets,” says Heather Blank, director of e-commerce marketing at Petco.com “It’s completely automated, so we’re able to deliver the most relevant information based on what customers tell us they want.”

Personalize It

David Daniels, research director at JupiterResearch, a Darien, Conn.-based business research firm, found in an early 2004 study that only 4 percent of e-mail messages sent from merchants were personalized. And that included those e-mailers who used recipients’ names in the messages.

E-mail personalization, says Daniels, is a lost opportunity — especially troublesome in an era when the technology to do personalization is readily available.

One way to personalize messages is to use category purchase history and then carefully craft the message to the recipient. McDonald offers an example: Say you sell men’s apparel, and you know that people who buy leather jackets also tend to buy baseball caps. “You can use all the data you have on that customer segment to personalize messages. For example: ‘Jack in Evanston, Ill.: How about a Chicago Cubs baseball cap to go with that Wilson’s brown leather jacket you bought from us last week?”

Scott Olrich, chief marketing officer at Palo Alto, Calif.-based Responsys, offers another example, this one based on demographics, recency and purchase history. “If Customer Group A generally buys again in 180 to 220 days, anyone in that group not buying within that time frame would be sent an automatic e-mail with personalized content and offers tailored to their past purchase history.

“Say the merchant knows that I’m male, between the ages of 35 and 50 and that I’ve bought shirts from them before. Fifteen days after the 220 days have lapsed, the e-mail system would automatically send me an offer for 15 percent off men’s apparel. Meanwhile, my wife would get an offer for 15 percent off shoes from that same merchant.”

Although the timing of the offer (15 days after the 220th day) and the offer’s percentage discount (15 percent) are the same, the offers are personalized based on behavioral attributes (the merchant knows he buys again in 180 to 220 days), past purchase attributes (men’s apparel) and demographics (male).

“Merchants should no longer be sending out broadcast e-mails,” says Olrich. The technology now is available to help you develop the best message so you can achieve the impact you want from e-mail campaigns, he notes.

Tools that can help you segment and personalize your e-mails include some of the larger e-commerce solutions that are tied to Web analytics and integrated with an e-mail delivery system, McDonald says.

Compare Providers

Not all ESPs are created equally, says Daniels. “While ESPs’ application features have not changed significantly during the past year, larger differences can be found among the providers’ usability, breadth of services and metric clarity,” he notes.

For example, 61 percent of ESPs remove hard bounces from their delivery-rate calculations, he says. This lowers the gross denominator and inflates their published delivery rates. “Such a widespread practice makes it impossible to accurately compare ESPs on important metrics such as deliverability,” Daniels cautions.

He thinks ESPs should include delivery failures in their calculations, so that an e-mail marketer can understand fully the impact of hard bounces on list hygiene, churn and ultimately its ESP’s reputation with the various Internet service providers.

Also, look for ESPs that provide robust platforms and good reporting tools, says McDonald. For example, if you want to begin doing the segmentation and personalization tactics suggested above, look for a solution that offers enough data fields so you can more easily collect all of the information from your customers that you’ll need. EmailLabs’ application gives unlimited data fields so marketers can, for instance, import purchase history, says McDonald.

Good reporting tools will help you see, for example, open rates and clickthroughs, thus helping you rate your e-mail campaigns. Finally, if you want to set up programs to send offers to specific customers at preset times (e.g., birthdays), look for ESPs that offer so-called triggering technology.

Says McDonald, a best practice in e-mail marketing is to smartly develop a road map outlining the role the channel is to play in your overall marketing strategy, and then following that plan to success.