December 15, 2005, 12:00 AM

Integrated database boosts conversions, cuts marketing costs for H2O Plus

A data warehouse that collects, analyzes and stores information from web site, store and catalog operations has helped H2O Plus, a multi-channel retailer of skin care products, boost conversion rates and cut marketing costs.

 

A data warehouse that collects, analyzes and stores information from web site, store and catalog operations has helped H2O Plus, a multi-channel retailer of skin care products, boost conversion rates and cut marketing costs.

Elevation Inc., an online marketing services firm, developed the data warehouse using H2O Plus’s existing e-commerce software-the Microsoft SQL server. H2O uses the database-which can segment information by such categories as channel of purchase, purchase tiers, and purchase frequency-to set up targeted e-mail campaigns.

Those campaigns have paid off in the form of higher conversion rates, says Jim McLaughlin, director of business development for H2O Plus. E-mail marketing programs to inactive customers resulted in a 5% conversion rate, while mailings triggered by birthdays had an 18% conversion rate.

In addition, an e-mail marketing programs to loyal customers produced a 20% click-through rate.

The integrated database also enables H2O Plus to cut marketing costs because it checks weekly to ensure that customers have valid e-mail addresses. That means H2O can send less expensive e-mail messages to customers who have opted in and have a valid e-mail address. “If the customer has either opted out, or we have an invalid e-mail address, we trigger an electronic mailing list that goes to our fulfillment house, and that person gets a post card or direct-mail piece,” McLaughlin says. “Literally 60% of direct-mail costs are eliminated by sending e-mail instead.”

The data warehouse also has enabled H2O to determine the value of marketing tools and shift resources to the most effective ones. In one instance, the retailer discovered that it was paying thousands of dollars on sponsored search for words that weren’t converting to sales, McLaughlin says. By eliminating those words, the retailer reduced sponsored search costs to $1,000 to $1,200 per month from $12,000 to $15,000 per month. “We were able to save a small fortune in key word buying,” he says.

 

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