Date post: | 13-Jan-2015 |
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Metrics from 400 Retailers: What Drives the Most Revenue? Best practices to maximize revenue and customer lifetime value through email marketing
KEY TAKEWAYS
Email continues to be a top driver of revenue for retailers
Adding customer-centric marketing to your email strategy can drive substantially higher conversions and revenue
Always ask yourself….“what would Julie do?”
A TALE OF ONE CITY (AND TWO GREAT COMPANIES)
What’s common?
Maniacal focus on the customer
THE JEFF BEZOS IMPERATIVE – THE “EMPTY CHAIR”
Ensure the customer is always represented
WHY THE IMPERATIVE TO BE CUSTOMER-CENTRIC?
► Accounts for 25-35% of all ecommerce
► Grew revenues by $13.9B last year
► Spent $2B on technology last year
$13.9B
Amazon
2012 Growth
$14B
497 of IR Top 500
2012 Growth
THE NORDSTROM IMPERATIVE – “BLACK BOOK” CLIENTELING
Treat each customer as an individual
“WHAT WOULD JULIE DO?”
+ Hi, I’m Julie
CURRENT STATE OF CUSTOMER-CENTRIC MARKETING
HOW DO CONSUMERS FEEL ABOUT IT?
WHAT CAN RETAILERS DO?
WHAT APPROACHES WORK BEST?
2013 - 5TH ANNUAL CONSUMER STUDY
HOW DO CONSUMERS FEEL ABOUT 1:1 INTERACTIONS?
Source: the e-tailing group
TOP REASONS CONSUMERS SAY THEY ABANDON
Source: the e-tailing group
You must stay engaged until the consumer is ready
to purchase
1
2
3
Warning: Amazon will stay engaged – if you don’t, you are giving up
AND CONSUMERS WANT YOU TO STAY ENGAGED
3 out of 4 consumers want personal email alerts as part of an integrated cross-channel shopping experience
Source: the e-tailing group
CONSUMERS INCREASINGLY VALUE 1:1 CONVERSATIONS
53% 66%
51% 64%
37% 44%
41% 34%
35% 39%
25%
25%
19%
21%
11%
RETAILERS WHERE I SHOP PERSONALIZE MY EXPERIENCE
RECEIVE PERSONALIZED EMAILS FROM RETAILERS
VALUE RETAILERS WHO PERSONALIZE ACROSS CHANNELS
PURCHASE MORE BECAUSE OF PERSONALIZED EMAILS
PURCHASE MORE BECAUSE PRODUCTS RECOMMENDED
2013 2012 Source: the e-tailing group
Current State Of Customer-Centric Marketing
HOW DO CONSUMERS FEEL ABOUT IT?
WHAT CAN RETAILERS DO?
WHAT APPROACHES WORK BEST?
Best Practice: Three emails – within 24 hours, day 2 and day 7
SITE ABANDONMENT CART ABANDONMENT
• You leave an item in your cart
• What would Julie do?
• She’d reach out to you and remind you
• She’d offer the product abandoned, but also an up-sell, and maybe even a down-sell
• She’d repeat this process a couple of times, maybe even with a special offer on the last attempt
• You leave the site empty-handed
• What would Julie do?
SITE ABANDONMENT
• Does she recognize you?
• She’d look at how engaged you were
• She’d recognize categories and products of interest, and depth of interest
• She’d send you a personalized email with a mix of products
Benefit: Site abandonment alerts deliver 16 times greater reach than cart abandonment alone
PURCHASE AND SHIPPING CONFIRMATION
• You just checked out and are receiving your order confirmation
• What would Julie do?
Bottom Line: These types of emails have the highest open rates of anything you send – don’t waste them!
• She’d look at what you bought
• She’d assess your interests and past shopping behavior
• She’d offer complementary products for cross-sell that match your interests + purchase
NEW PRODUCTS OF INTEREST NEW PRODUCTS OF INTEREST
• A new product arrives in the catalog
• What would Julie do?
Benefit: 2-3X Average Email Conversion Rate
• She’d look in her little black book and find all clients with an interest in this type of product
• She’d call each one individually and invite them to come back
• She’d be waiting with that product and others that each customer most wants to buy
ADVERTISING AUGMENT EMAIL WITH DISPLAY ADVERTISING
• You are no longer opening their emails?
• What would Julie do?
• She’d try to engage you in other ways, perhaps a display ad?
• She’d show you products of interest, products recently abandoned, etc.
• She might throw an offer out to entice you back
• She’d spend only what is necessary…
Current State of Customer-Centric Marketing
HOW DO CONSUMERS FEEL ABOUT IT?
WHAT CAN RETAILERS DO?
WHAT APPROACHES WORK BEST?
CUSTOMER-CENTRIC EMAIL OUTPERFORMS INDUSTRY AVERAGES
19% Higher
2X Better
3X Lower
Customer Centric Industry Average Customer Centric Industry Average Customer Centric Industry Average
EFFECTIVENESS INCREASES OVER TIME
Wine Enthusiast
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00% Ja
n-0
8
Ma
r-08
Ma
y-08
Jul-0
8
Sep
-08
No
v-08
Jan
-09
Ma
r-09
Ma
y-09
Jul-0
9
Sep
-09
No
v-09
Jan
-10
Ma
r-10
Ma
y-10
Jul-1
0
Sep
-10
No
v-10
Jan
-11
Ma
r-11
Ma
y-11
Jul-1
1
Sep
-11
No
v-11
Jan
-12
Ma
r-12
Ma
y-12
Jul-1
2
Sep
-12
No
v-12
Jan
-13
Customer Centric Email Revenue Performance Index
Time Period: January 2010 to December 2012.
$159
$375
$760
$-
$100
$200
$300
$400
$500
$600
$700
$800
1 2 3
Ave
rag
e C
ons
ume
r Sp
end
Number of Engaged Channels
Avg Consumer Spend 5X improvement
MORE CHANNELS, THE HIGHER LIFETIME VALUE
PRIORITIES, PRIORITIES…
ATTRACT
CONVERT
NURTURE
Top seller emails
Abandoned site & cart email Order confirmation
Shipping confirmation Post-order follow-up
New products of interest Pricing / offer changes Seasonal newsletters
Sales / promotions
1
2
3
4
5
Email Best Practice in Action Sports Unlimited
Mike Neff, Director of eCommerce
Sports Unlimited - Background
History
• Started 1983 with one brick-&-mortar store • 1998 went online • 2008 shut down brick-&-mortar
Challenges:
• Site traffic is declining; acquisition costs are high
Main Areas of Focus 2013:
• SEO (lost traffic) • Site conversion rate (conversion testing) • Refocusing on customer loyalty
Ongoing Strategies:
• Bronto segmented emails • MyBuys web recommendations and email alerts
POST CART ABANDONMENT PRODUCT ALERTS
• Sent 2x weekly • Automatically segment to individual
subscriber
PERFORMANCE METRICS
Sales Growth:
Cost Per Acquisition: pay for sales you receive
Customer Loyalty:
100% Increase
(2+ purchases)
50%
33%
0%
10%
20%
30%
40%
50%
60%
Revenues
2011 2012
ORDER CONFIRMATION EMAIL
SITE ABANDONMENT ALERTS
• Sent after consumer leaves the site
• Targets consumers while they’re still in shopping mode with products and offers they were browsing
• Identifies infrequent shoppers in the house list, bring them back to buy.
Q & A Sports Unlimited
Mike Neff, Director of eCommerce
MyBuys
Chip Overstreet, SVP Business & Corporate Development
20% off any order coupon CODE = BRONTO20