June 2, 2011, 10:52 AM

TomTom turns to e-mail to drive shoppers to buy a new GPS device

Targeting e-mails to specific niches led recipients to click or open messages.

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Navigation products maker TomTom wanted to entice its existing customers to trade in their old GPS devices for newer models.

But that approach required TomTom to get back in touch with previous buyers—many of whom had not interacted with the brand since registering their devices. That meant TomTom had to come up with an incentive that would entice shoppers to trade up, without cutting deeply into its own profit margins.

TomTom worked with e-mail marketing firm BlueHornet Networks Inc. to divide into three parts its e-mail list of more than 650,000 consumers who owned devices three or more years old. The company then sent a different offer to each group.The offers varied based on subscribers’ past engagement with previous e-mails. For instance, consumers who had never clicked on a previous e-mail were sent an informational message that also contained a limited-time discount, such as $30 off a new device for one week. As subscribers engaged with the e-mail—either opening it or opening it and clicking on one of its links—but didn’t upgrade, the promotions increased and the time frame to make a purchase got shorter, increasing the urgency to act immediately. For instance, one such offer was for $30 off, as well as a free carrying case. That offer was valid for three days.

The program produced a 6% conversion rate with revenue reaching “several hundred thousand dollars,” according to TomTom.

“Leveraging BlueHornet’s strategic services and platform capabilities we were able to easily target and reengage with customers we may have lost otherwise,” says Nora Palmer, TomTom.com’s e-commerce manager. “This program allows us to extend our relationships with a large number of valuable customers—relationships which will show positive ROI now and in the future.”

The program has also led TomTom to rethink how it interacts with its customers, she says. For instance, the retailer’s e-commerce team is developing an automated trade-up program to reengage previous customers and retain them going forward.

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