Competition in the inbox is fiercer than ever, but there are still plenty of ways retailers can use e-mail to deepen their ties with customers and boost sales.
Retailers may be relying on e-mail marketing more than ever during the recession, because it's so cost-effective. But that doesn't mean it's any easier to convince consumers to open those e-mails or to click through to the merchant's web site.
With open rates on retailer e-mails averaging about 20% and click-through rates about 5%, according to reports from e-mail marketing vendors, retailers recognize that sending more e-mail without increasing the relevancy of messages will only turn consumers off. That's why retailers are striving to create more compelling e-mail without necessarily increasing frequency.
"Effective e-mail marketing is about engaging the consumer so that they interact with the retailer," says Scott Voigt, vice president of marketing for e-mail service provider Silverpop. "One of the keys to engaging customers is to get the right message in front of them at a time when they are likely to open and read their e-mail."
Sending the right message at the right time starts with understanding how your customers use e-mail. Are they most likely to open e-mail during mornings, afternoons, evenings, weekdays or weekends? And are they more likely to open an announcement about a sale or about new arrivals in a category they like?
"Retailers need to look at consumers' response patterns to determine the right mix of frequency, message relevancy, and timing," says Yun-Hui Chong, vice president of strategic services for e-mail service provider Experian CheetahMail. "As retailers decrease direct marketing activity in other channels, having this kind of information becomes more crucial to creating successful e-mail campaigns."
Relevant subject lines
Part of tracking consumer response patterns includes identifying which links consumers click on once they open an e-mail. Doing so helps retailers determine which elements of the e-mail recipients find relevant, enabling marketers to tweak the subject line to highlight the most popular element of the message. They can then resend it to consumers on the mailing list that did not click through to the merchant's web site the first time.
While subject line relevancy is e-mail marketing 101, it remains a critical component of a successful e-mail marketing strategy. A subject line that speaks directly to a consumer's interests can make all the difference.
"We had an apparel retailer that did an e-mail blast promoting free shipping and returns in the subject line, but most of the clicks were on a box promoting a new designer brand," recalls Julie Waite, e-mail marketing specialist for e-mail service provider Bronto Software. "When we highlighted the new designer brand in the subject line and remarketed the message to consumers that did not open or click through the previous version, open and click-through rates jumped significantly."
Marketers can also boost open rates by personalizing subject lines so they appeal directly to the preferences a recipient has shown or indicate that the content is related to products the consumer already owns. For example, cost-conscious shoppers might receive a subject line saying "Laptop computers on a budget." Retailers looking to engage consumers that own a specific product might say "Climbing skins for Kastle MX88 skis."
The aim is to create a subject line that is personalized, pertains to the recipients' interests, tells them exactly what's in the e-mail, and does not use marketing hype. "Many e-mail marketers tend to use one subject line for the campaign rather than creating and testing multiple subject lines that will have a stronger appeal to specific segments of the mailing list," says Mike Hilts, president and general manager for e-mail marketer Yesmail. "Subject lines can be determined by A/B tests. But even though testing will determine a clear winner, there may be other subject lines that played well with large portions of the test audience. It is worth using those subject lines to reach those respective segments."
Hilts recommends retailers avoid using a recipient's name in the subject line as that technique is becoming less effective since spammers have latched on to it. "The inbox is getting more crowded and personalization strategies have to change," Hilts says. "The intent of the subject line is to get consumers to open the message, not necessarily to sell. Creative, dynamic subject lines are going to appeal to consumers on a more personal level."
The right stuff
Just as the right subject line can encourage consumers to open e-mail, the right content is decisive in determining what the recipient does next. Retailers are sending more follow-up e-mail to consumers who have abandoned a shopping cart in an attempt to save the sale. Since retailers do not know the reason why the shopping cart was abandoned, experts recommend a helping-hand tone to the follow-up message.
"Sometimes shoppers may accidentally close the shopping cart window, lose their connection to the site or have some other issues that prompt them to abandon the cart before completing the sale," says Silverpop's Voigt. "Asking the shopper if there was a service or technical problem that prevented them from completing the sale and offering to help them resolve it is a good messaging approach."
Voigt recommends that retailers include a sentence apologizing for the intrusion in case the shopper simply changed her mind and decided not to make the purchase. "Retailers want to close the loop as fast as they can in these instances, but they need to come across as being helpful and understanding rather than intrusive," adds Voigt.
In addition to enabling retail e-mail marketers to analyze, segment and build on their marketing data and customer attributes to drive relevant marketing efforts, Silverpop also provides meaningful reports that help to quickly analyze the performance of individual mailings, triggered messages or campaigns.
Market research
Analyzing customer feedback is an excellent way for retailers to collect information that can help them run their businesses more effectively. But retailers do not necessarily have to conduct an e-mail survey to obtain this information.
An e-mail campaign that offers a retailer's best customers the opportunity to reserve a seasonal item not yet in stock can help the retailer gauge interest in the item before placing an order with the supplier.
"This type of campaign can help retailers figure out how strong sales might be for an item before inventory is ordered," says Experian CheetahMail's Chong. "In this economy, retailers want to better allocate every inventory dollar. Without this type of feedback, retailers are basing their inventory decisions on a gut feeling. E-mail is more than a marketing and merchandising tool, it is a tool that can help retailers make broader organizational decisions."
One organizational decision that many retailers are struggling with in the current economy is how to effectively liquidate unsold inventory. It can be difficult for a retailer to liquidate limited quantities of an item, especially when not all sizes and colors remain. The dilemma facing multichannel retailers is whether to allocate shelf space in stores for items with such limited quantities.
Using e-mail to target shoppers that typically buy items on sale or from clearance bins is a way to effectively move the merchandise without taking up valuable shelf space in stores. "Apparel retailers can even create e-mail campaigns that target customers that fall within a certain size range or category preference," adds Chong, who prior to joining Experian CheetahMail worked for women's apparel retailer Spiegel.
Experian CheetahMail's services include campaign management; creative, strategic and analytical consulting; and data analysis.
E-mail and social media
One of the new challenges e-mail marketers face today is learning how to leverage the social networking phenomenon. More and more consumers are joining such online communities as Facebook, MySpace and Twitter, and using them to talk about their shopping experiences.
Because word of mouth is such a powerful influence on consumer behavior, retailers are searching for ways to create e-mail campaigns that can land their messages on a customer's personal Facebook or MySpace page.
"There is a huge marketing opportunity through social networking sites, but the key for retailers is to get consumers talking about them in a positive way, rather than be the one to start the discussion," says Bronto Software's Waite.
One technique retailers can use is to include buttons that allow e-mail recipients to post the content within the message to their Facebook or MySpace pages.
The content may be news about a product, a promotion or even a thank you for a purchase that includes a prompt to share thoughts about the shopping experience with friends in their social network. "Any prompt to post something to a social networking site should be presented as an option," says Waite. "The goal is to let the customer decide what they want to post."
Bronto Software provides such features as advanced reporting, web analytics integration, and dynamic content that enable retailers to deliver relevant, timely e-mail messages.
Virtual tailgating
Before retailers plunge into the world of social networking, they first need to understand who their customers are, where to find them, and how to reach them through social networking. Creating social networking events, such as a virtual tailgate party for a football game, and e-mailing notification to loyal customers likely to spread the invitation throughout their respective communities can be an effective tool for attracting existing and prospective customers.
"It is an accepted practice for sports apparel companies to sponsor events as a way to involve themselves in a physical community, and consumers in social networking communities don't see much difference when it's done in the virtual world," says Yesmail's Hilts.
The event can feature contests that engage consumers, such as whoever sends the most tweets on Twitter from the game wins a coupon from the retailer. "Retailers can also encourage consumers to post live photos from the game using their cell phones to enhance the experience for people who are on the event page but not at the game," Hilts says. "The aim is to create a live event that is fun, non-intrusive, engages consumers and motivates them to share the retailer's message with their respective communities."
In addition to providing full-service, self-service and hybrid e-mail marketing applications to create e-mail campaigns, Yesmail has developed social networking assessment tools for retailers who are ready to start or build out their multichannel marketing communications. After assessing their current program and where it makes sense to build out applications, Yesmail can help clients extend the power of their e-mail marketing programs by creating a plan to bridge e-mail with fan pages on Facebook, a branded Twitter page, or iPhone applets and widgets.
Finding friends
To help retailers follow postings on social networking sites Bronto Software offers tools for retailers to track sharing of their branded e-mails. Experian CheetahMail and Yesmail offer tools to track mentions about their brand on social networking sites. Silverpop makes it easy for e-mail recipients to post e-mail on social sites and track the viral results of those postings.
These capabilities allow retailers to not only measure their exposure on social networking sites, but also track which customers generate the most postings. "Brand advocates are an extremely valuable audience because they influence consumer attitudes toward a retailer's brand," says Voigt. "Retailers need to know who their brand advocates are and what they are saying about their brand and then find ways to stoke the affinity they have for their brand through e-mail marketing."
One way to reward shoppers who post a positive review on a social network or who forward an e-mail to a friend is to e-mail them coupons. "Sending a coupon is a way to say thank you to the person that initiated the posting without coming across as a blatant marketing campaign," says Waite. "A lot of retailers are jumping on the social networking bandwagon, but they need to remember that social networking communities tend to be sensitive to perceived intrusions from marketers. It is always best to tread lightly as consumers will tell friends about bad experiences with marketers."
Video tips
Video is another way to appeal to online consumers, who are watching video in ever-growing numbers. Consumers like video because it brings products to life in a way that still images and text descriptions cannot. The growing popularity of the medium on retail sites has many retailers looking to incorporate video into their e-mail messages. However, retailers are discovering that embedding an actual video in an e-mail message can pose unexpected problems that can prevent the e-mail message from being delivered.
A better option is to include a link within the e-mail that transports the recipient to a landing page where the video automatically launches. The e-mail message can include a video icon above the link or an actual image from the video with a start button that the consumer can click to proceed to the landing page.
"Video is a good marketing tool that can enhance e-mail campaigns, but there are some technical and cost issues retailers need to be aware of first," says Chong. "Transporting consumers to a landing page that launches the video is more reliable than embedding it in the e-mail. From a cost standpoint, retailers may only to want use video in e-mail when it can illustrate the content in a much better way, because video production costs can be quite expensive."
List management
One area of e-mail marketing where retailers tend to fall down is list management. Too often retailers either fail to purge their mailing lists of consumers that have not opened an e-mail in several months or they purge the list in haste.
Before removing consumers from a mailing list, retailers should make one last effort to contact customers and provide them the opportunity to opt out or establish new preferences for the type of e-mails they want to receive and how frequently.
"Retailers should always send an e-mail that attempts to re-engage a customer that is not opening e-mail before removing them from the mailing list," Voigt advises.
The best approach with a re-engagement e-mail is to be straightforward about the intent of the message in the subject line. Such phrases as "We haven't heard from you in awhile" clearly state the intent of the message. "The body of the message should include a sentence that tells the recipient this is the last e-mail they will receive unless they indicate they want to continue to receive them," says Voigt. "Retailers can direct the recipient to a preference center that gives them a say in setting frequency and the type of content they want to receive."
Even if consumers on the mailing list open a retailer's e-mail it is a good idea for the retailer to occasionally direct customers to a preference center to stay current with their e-mail preferences. "Consumers like having a say in what they receive and how often. Letting them know they have a way to state their preferences can prevent them from unsubscribing, going dark, or tagging a retailer's e-mail as spam," Voigt adds.
Timing is everything
Measuring the value of the customer across all sales channels and taking into account the types of products they purchase can help determine whether it is too soon to purge a customer.
A customer that last purchased a big-ticket item, such as a computer, is going to have a longer gap between purchases than someone who purchased an inexpensive item like a book. Other customers may respond to, but not open, mailings with a subject line promoting a store-wide sale.
"Merging all the e-mail click activity and offline response rates to direct marketing campaigns can provide a truer picture about the value of the customer," says Chong.
One tactic for staying in touch with consumers that go long periods between purchases is to occasionally send follow-up e-mails after a purchase. The message can simply thank shoppers for their loyalty, offer them a coupon for a related product or a coupon for referring a friend. Other messages can ask about their ongoing satisfaction with the product.
"Keeping up communications after the purchase is important, but the message needs to be varied based on the point in the buying cycle," says Hilts. "The further away the customer is from the next purchase, the more loyalty-oriented retailers ought to make the message. As it gets closer to the next purchase, the message should become more marketing-oriented. It all goes back to putting the right message in front the consumer at the right time. Finding the right time is the most variable part of the equation."
A good rule of thumb for managing a mailing list is to identify and purge inactive addresses at least once a year, according to Bronto Software's Waite. "E-mail may be a lower-cost form of marketing, but retailers still need to get the most from their e-mail budget, especially in this economy," says Waite. "It is best to avoid dead weight in the mailing list."
Retailers that track customer response patterns, take advantage of social networking and video, and that offer consumers a chance to modify their e-mail preferences before scrubbing a mailing list will be well positioned to increase sales from their e-mail campaigns.
"There are a lot opportunities to engage consumers through e-mail," Waite says, "and retailers need to be savvier when it comes to leveraging them."
