Transcript Concast Communications

Surviving the Recession
with E-mail Marketing
Arthur Middleton Hughes
Senior Strategist
Chicago Association of Direct Marketing
Sheraton Chicago Hotel and Towers
8:30 – 9:30 AM Tuesday May 5, 2009
© 2007 e-Dialog, Inc. All Rights Reserved.
The recession is here
 It will last for more than a year.
 What should marketers do?
• Slash prices?
• Cut back on the marketing budget?
• Look for another job?
 Answer: None of the above.
 Better solution: make more effective use of e-mail to
build relationships with customers.
 E-mail – developed correctly, is the answer to
keeping customers in a recession.
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© 2008 e-Dialog, Inc. All Rights Reserved.
E-mail’s Role Not Understood
 In many companies, e-mail is not recognized as the
marketing powerhouse that it is
 It is somewhere off on the side, producing Web
sales which are about 3% or less of total sales.
Budgets are often based on online sales alone.
 That may be the perception, but companies that
think that way are missing the boat
 Here is the reality…
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© 2008 e-Dialog, Inc. All Rights Reserved.
E-mail Influences all channels
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© 2008 e-Dialog, Inc. All Rights Reserved.
E-mail Offline Sales 3 Times Online
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© 2008 e-Dialog, Inc. All Rights Reserved.
Multi-Channel Buyers More Valuable
JC Penney US Data
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© 2008 e-Dialog, Inc. All Rights Reserved.
Lowest Cost Per Order
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© 2008 e-Dialog, Inc. All Rights Reserved.
The value of an e-mail subscriber
Online & Off Line Sales
Typical Retailer
E-mail Subscribers
Annual Unsubs & Undelivers
Tracking the value of E-mails Delivered
Open Rate
1,000,000 specific
Opens
people over three
Conversion Percent of Opens
years.
Online Conversions
Off Line Sales due to e-mails
Once a week eTotal Purchases
mails; open rate 25%
E-mail induced sales from Online and Offline
For every online sale
Operating Costs
there are 3 offline
Subscriber Acquisition Cost
due to e-mails
Value of each e-mail
subscriber is $48.99
Transaction E-mails Per Order
Total E-mails Delivered
E-mail Costs CPM Incl Creative
Database & Analytics
Total Costs
Gross Profits
Discount Rate
Net Present Value Profits
Cumulative NPV Profits
Value of an E-mail Subscriber
8
52
3.00
$144
50%
$12.00
3
$6.00
$0.75
Registration
Year
Year
2
Year
3
1,000,000
17%
47,580,000
25%
11,895,000
0.8%
95,160
285,480
380,640
$54,812,160
830,000
16%
39,707,200
22%
8,735,584
0.9%
78,620
235,861
314,481
$45,285,267
697,200
15%
33,535,320
19%
6,371,711
1.0%
63,717
191,151
254,868
$36,701,054
$27,406,080
$12,000,000
1,141,920
48,721,920
$292,332
$750,000
$40,448,412
$22,642,634
$18,350,527
943,443
40,650,643
$243,904
$750,000
$23,636,538
764,605
34,299,925
$205,800
$750,000
$19,306,327
$14,363,748
1
$14,363,748
$14,363,748
$14.36
$21,648,730
1.11
$19,503,360
$33,867,109
$33.87
$17,394,728
1.15
$15,125,850
$48,992,959
$48.99
© 2008 e-Dialog, Inc. All Rights Reserved.
Gain subscribers by your website
 If you want them to register, you
must promote the idea on the
website, in transactions, in print
and direct mail and catalogs. Go
all out.
 Give them a reason for
registering.
 Compare these two approaches
 One is tiny and hard to find.
 The other gets results.
 Which do you use?
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© 2008 e-Dialog, Inc. All Rights Reserved.
Upgrade your POS system
 Borders UK set up their POS system in May 2006 to
collect e-mail addresses at the cash registers.
 The POS system sent data every night to the Borders
ESP. This triggered welcome messages to everyone who
signed up the day before.
 The messages included a discount voucher to prompt a
second visit.
 Results: 38% higher transaction values for e-mail
subscribers compared to other members.
 13% voucher redemption rate
 E-mail subscriber base increased 630,000
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in 17 months.
© 2008 e-Dialog, Inc. All Rights Reserved.
Reward Staff and Subscribers
 Once you know the value of an e-mail you can afford to
incentivize subscribers and employees .
 If each e-mail address is worth $49, you can give a
subscriber $5.00 for her e-mail address.
 You can give employees $5.00 for getting each new email
 When the new e-mail is entered, a welcome e-mail is
sent out right away, asking the subscriber to click that
she really wants to receive your e-mails.
 If the e-mail is new, and valid, and she clicks “yes” you
give the reward to the employee and to the subscriber.
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© 2008 e-Dialog, Inc. All Rights Reserved.
Incentivize Your Staff
When I took my car to one of those quick-lube
places, I watched the attendant as he clicked
through the screens for my transaction and just
skipped the one asking for my e-mail address.
Why didn’t he ask me? Probably because some
people, when asked in the past, grumbled about
spam and peppered him with questions he didn’t
know the answer to. Also, he must have had no
incentive to capture my address.
These issues are very easily overcome with little
cost; it just takes commitment and a clear plan
supported at all levels. – John Rizzi, CEO, e-Dialog
© 2008 e-Dialog, Inc. All Rights Reserved.
Switch from Hunting to Farming
 As the world population grows, hunting for wild
animals has been replaced by domestic farming.
 Hunters study their weapons.
Farmers study their
animals and care for them.
Hunters
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Farmers
© 2008 e-Dialog, Inc. All Rights Reserved.
Most e-mail marketing is hunting
 E-mails are so cheap to send -- $6.00 per thousand –
that most marketers do not bother with a database
 “Mail ‘em all. Someone will buy.”
 Instead of studying the subscribers, marketers work
to sharpen their e-mails
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© 2008 e-Dialog, Inc. All Rights Reserved.
Hunting is failing today
 Subscribers are getting more e-mail than they want
or can possibly read – batch and blast is in tatters.
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© 2008 e-Dialog, Inc. All Rights Reserved.
Direct mail is like farming
 Direct mail costs $0.60 per letter or more
 If you sent promotional mail to everyone
in the US you would go broke
 Instead you build databases and study
consumers. You select the right lists, and
demographics. The right list is your key
(80%) to success.
 It is very scientific and profitable.
 E-mail marketing can be done in this
same way
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© 2008 e-Dialog, Inc. All Rights Reserved.
How to switch to farming
 Build a subscriber database
 Include demographics (age, income, children, home,
length of residence, etc.)
 Plus web behavior (opens, clicks, purchases)
 And preferences
 Use this to create segments
 Develop a marketing program for each segment
 Make sure that each e-mail is relevant to the interests
and lifestyle of each recipient
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© 2008 e-Dialog, Inc. All Rights Reserved.
Recognize status levels
Actual e-Dialog retail client data
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© 2008 e-Dialog, Inc. All Rights Reserved.
Create meaningful segments
Actual large retailer segment system with 16,000,000 customers
© 2008 e-Dialog, Inc. All Rights Reserved.
Understand your subscribers
 Most e-mail marketers think that everyone is looking
for bargains. Some people definitely are.
 But others look for quality, helpfulness and service.
 To send daily e-mails saying SALE! SALE! SALE! may
turn some subscribers off.
 Look at what Sears asks their web appliance buyers:
How I feel about brands:
1. I typically buy top-of-the-line brand products.
2. I buy name-brand products at a moderate price.
3. I am always looking for a bargain. I will try any brand if the price is right.
How I feel about technology:
1. I buy products with the latest features and technology.
2. I buy products with mainstream features and technology.
3. I am not interested in technology. Keep it simple for me.
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© 2008 e-Dialog, Inc. All Rights Reserved.
Result: more opens and sales
 Jupiter research: segmentation can improve
conversion rates by up to 355% and increase
revenues by as much as 781%
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© 2008 e-Dialog, Inc. All Rights Reserved.
Making the most of your e-mails
 Now that you have lots of subscribers, make the
most of them:
 Send out a welcome e-mail within minutes of
receiving a “yes”
 Put subscribers into segments and design e-mails
for each segment.
 Personalize your e-mails: goal is to have each
subscriber feel that this e-mail is designed just for
her. Include forward-to-a-friend.
 Let’s begin by getting her to buy off line from you.
 Let’s see what others have done…
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© 2008 e-Dialog, Inc. All Rights Reserved.
E-mail: Look in your mailbox!
 Miles Kimball tested 20,000 catalogs in three
mailings with a simultaneous e-mail: “Look in your
mailbox”
 Also sent identical catalogs to 20,000 others without
the e-mail.
 Those with the e-mail produced 18% higher sales.
 E-Mails get people to do what you want them to do at
very little cost.
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© 2008 e-Dialog, Inc. All Rights Reserved.
Borders store sales with e-mail
 Borders UK set up their POS system in May 2006 to
collect e-mail addresses at the cash registers.
 The POS system sent data every night to the Borders
ESP. This triggered welcome messages to everyone
who signed up the day before.
 The messages included a discount voucher to
prompt a second visit.
 Results: 38% higher transaction values for e-mail
subscribers compared to other members.
 13% voucher redemption rate
 E-mail subscriber base increased 630,000
in 17
months.
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© 2008 e-Dialog, Inc. All Rights Reserved.
Cold Stone Creamery E-Mails
 Cold Stone with 1,700 locations created a birthday
club “Receive FREE Ice Cream on Your Birthday!” .
 In two years, 2,000,000 signed up for e-mails.
 Birthday e-mails have open rates 62.5% higher than
other e-mails. Click throughs are 350% higher .
 Franchisee survey:
“Overwhelmingly positive
response… drives people into the stores… people
don’t come in by themselves.”
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© 2008 e-Dialog, Inc. All Rights Reserved.
E-Mail : Go to your retail store
 Blockbuster sent e-mails with news about movies to
170,000 members for six months.
 14,000 members asked for the e-mails but were
withheld as a control.
 At that time Blockbuster did not have any online
sales
 Those who received the e-mails went to the stores
and purchased 28% more over six months than
those who did not get the e-mails.
 E-mails get people to get in their cars and drive to a
retail store.
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© 2008 e-Dialog, Inc. All Rights Reserved.
E-Mails drive clothing store sales
 Goody’s with 322 stores sends coupons every 2 weeks to
their e-mail subscribers.
 Store clerks:
“Please fill out your e-mail on these paper
forms” Clerks type e-mails into Goody’s web site in spare
time.
 Barcode assigned to each coupon identified subscriber and
source of the coupon: e-mail versus website.
 Coupon redeemers have 50% bigger basket: $74 versus
average for non-coupon shoppers of $50
 Some customers print and use coupons twice! That is great!
 Result: ROI of 150%. $0.68 revenue per e-mail sent per
campaign.
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© 2008 e-Dialog, Inc. All Rights Reserved.
Use triggers to boost sales
 Triggered e-mail messages offer a three advantages.
 First, they have very high open rates.
 Second, they enable automated cost-effective
communications.
 Third, by including promotions below the fold, they
deliver high ROI results.
 In fact, it is not unusual for a triggered message to
deliver upwards of five times higher revenue when
compared to a standard broadcast e-mail.
© 2008 e-Dialog, Inc. All Rights Reserved.
Birthday and Anniversary Trigger
 Recognize customer milestones such as birthdays or
anniversary of program signup
 Results: 2x lift in revenue per net delivered e-mail
© 2008 e-Dialog, Inc. All Rights Reserved.
Transactions: your most powerful e-mails
 Transaction e-mails (“Your order was shipped
today”) have open rates of more than 60%
 Here is an ideal opportunity to promote
additional sales – because customers are
reading them.
 Many companies do not take advantage of this.
 Their transactions are in text, not HTML, and
often say “Do not reply to this e-mail!”
 What a mistake!
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© 2008 e-Dialog, Inc. All Rights Reserved.
Netflix promotes via transactions
The transaction
The next product
© 2008 e-Dialog, Inc. All Rights Reserved.
A Terrible Transactional E-mail
Dear Valued Customer,
Thank you for placing your order with BillBracket.com. We are currently
processing order 64854019. In-stock item(s) will arrive within 7-10 days
Please add one business day for orders placed after 3:00 p.m. Pacific time
and for gift-wrapped
or inseamed items
Monogrammed Items: If you ordered an embroidered item, please add one
business day to your delivery timeframe
For engraved items, please allow an additional eight to nine days
For more
information, click here.
The status of your items is listed below:
Item name
Qty. Size Color Status
Carpenter Jeans, Regular
1
34/30 Med. In Stock OES
Casual Chinos Nano-Tex®--Regular 1
34
Khaki Avail. 12/07/07
If you haven't already, sign up today for a personal Bill Bracket Login Account
and you can track this order, plus all future orders!] (Please note: it may take a
day for order status to become available.)
We look forward to your next visit,
Customer Service,
Bill Bracket, Inc. BillBracket.com
Check out our new arrivals and find great savings at BillBracket.com.
© 2008 e-Dialog, Inc. All Rights Reserved.
Microsoft Blows an Opportunity
Why don’t you make a note of
this easy-to- remember number
So you can enter it here!
And read this easy number over the phone to them here!
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© 2008 e-Dialog, Inc. All Rights Reserved.
Summary: Prosper in the recession
 The downturn in the economy tells you: “Now is the
time to do a better job with your e-mails”
 You need to add millions to your subscriber list
 Method: Calculate the value of your e-mail subscribers
 Use that value to reward your subscribers and your
employees
 Switch from Hunting to Farming
 Use transactional and triggered e-mails to
build
relationships and sell more.
 Make your e-mails relevant, funny, interesting
adventures
 Finally: Use e-mails to fill your stores with shoppers.
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© 2008 e-Dialog, Inc. All Rights Reserved.
Keep up on your reading
Order from www.dbmarketing.com or www.amazon.com
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© 2008 e-Dialog, Inc. All Rights Reserved.