May 7, 2013, 10:12 AM

How Palm Beach Jewelry fishes for new customers in an ocean of e-mail addresses

The retailer uses eWayDirect’s technology to filter out consumers most likely to buy.

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Family-owned jeweler Palm Beach Jewelry, No. 627 in the Internet Retailer Second 500, acquires at least 100 new customers for every 10,000 e-mail addresses that it buys from other web sites, says director of marketing Daniel DeYoung. It uses technology from vendor eWayDirect Inc. to filter those addresses to determine the consumers most likely to buy before adding them to its e-mail lists, he says.

In addition to generating more revenue, that allows Palm Beach to keep its e-mail deliverability rate, a measure of how many e-mails make it to the inbox, above 99%, he says—an imperative for a retailer that counts e-mail marketing as a top source of revenue. E-mail is not delivered when the address is entered incorrectly or the account is no longer available, among other reasons. Businesses with low deliverability rates risk being blocked by e-mail services like Google Inc.’s Gmail, Yahoo Inc.’s Mail or Microsoft Corp.’s Outlook.

Last year when Palm Beach tried sending e-mails to an entire batch of 10,000 addresses it had purchased from an e-mail list provider, its deliverability rates immediately dropped from 99% to around 90%, DeYoung says. The retailer took a significant hit in revenue when that happened, he says, declining to disclose exact figures.

“From an e-mail deliverability and revenue protection perspective, it’s absolutely imperative that I work with eWay,” DeYoung says. “Not having to send that e-mail or deal with that customer is a huge value proposition for us.”

Palm Beach uses eWayDirect’s CertainSource product to manage its e-mail leads and draw out the prospects most likely to become customers, DeYoung says. CertainSource works by sending a specific offer, such as a coupon, to all the e-mail addresses Palm Beach purchases.

For example, the retailer runs a co-registration campaign with women’s health web site LifeScript.com, where consumers who sign up for LifeScript’s newsletter can check a box to receive a $10 gift card from Palm Beach, DeYoung says. Then CertainSource, on behalf of Palm Beach, sends each address a series of e-mails based on that offer. The messages are tailored to the recipients’ responses—for example, reminding them of the gift card if they’ve opened it but not yet clicked to use it.

As soon as a consumer redeems the card, CertainSource stops sending her messages and gives her e-mail address to Palm Beach. After about a month, it also gives the retailer the addresses of recipients who didn’t purchase but opened an e-mail or clicked through to the site. It removes e-mails that generated no response. “It makes sure we only send e-mails when we know they will be a good customer later,” DeYoung says. Palm Beach gains at least a few customers every day, he adds.

After a setup fee, which DeYoung declines to disclose, he says Palm Beach pays about 4 cents for every e-mail that is opened or clicked; it does not pay for messages that are blocked by e-mail service providers, blacklisted or otherwise undelivered

Palm Beach also manages purchasing new e-mail addresses from other sources through CertainSource, which continuously filters them as they come in until the retailer acquires its desired number of new customers, DeYoung says. CertainSource also provides reporting about which sources are providing addresses with the best open rates and the most new customers. That helps retailers adjust their marketing spend on those leads accordingly. The tool is accessible through a web portal.

CertainSource is perhaps most suited to mature e-retailers looking for new sources of customer acquisition, says Jim Okamura, managing partner of retail consultancy Okamura Consulting. Typically, large lists of acquired e-mail addresses do not yield good returns for e-retailers—at least not without lots of manual filtering, he says. However, eWayDirect’s automated approach could help retailers’ customer acquisition efforts, which today includes social media and omnichannel strategies, he says. “If they are effective at finding those more qualified customers and ultimately that is resulting in higher conversion rates, this pushes and elbows its way to the front of the queue,” he says.  

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