July 27, 2006, 12:00 AM

Energizing E-mail

Online retailers are adopting many innovative ways of keeping their customers engaged in e-mail messages - and shopping.

Until 10 months ago, Road Runner Sports’ e-mail marketing philosophy could be best summed up as “the more mailings the better.” The retailer blasted out e-mails promoting discounts and other promotions twice a week.

But rather than generating increases in open, click-through and conversion rates, Road Runner’s e-mail campaigns had just the opposite effect. Among the new customers the retailer acquired each month, response rates dropped significantly within 2½ months. “Someone would order from us for the first time, and they would get this barrage of discounts and promotions without really knowing anything about us, without knowing anything about what we provide runners,” says Dan Bock, e-commerce manager.

Flooded inboxes

The e-mail campaign experience of Road Runner, which operates four stores in addition to RoadRunnerSports.com, is not unique. In retailers’ enthusiasm to reach out to customers, they too often flood inboxes with promotions of little value to the consumer, experts say. The end result is a burned-out customer who clicks the unsubscribe button and takes his or her business elsewhere or leaves the e-mail unopened in an inbox or bulk folder.

E-mail campaigns are built on quality of content, not frequency of mailing, experts say. But that’s a point often overlooked by retailers. “They are so driven by the merchandising calendar that they play the frequency game,” says Arthur Sweetser, vice president at e-mail services provider e-Dialog Inc.

It might seem logical to retailers that if one e-mail blast produces increased sales, follow-up mailings will do the same. “What actually happens is they get higher unsubscribe rates, and lower click-through rates,” says Joe Colopy, CEO of Bronto Software Inc. “They end up burning their lists.”

Road Runner Sports reached that conclusion after reviewing its e-mail strategy for new buyers, Bock says. On the advice of its e-mail services provider e-Dialog, the retailer scaled back contacts with new buyers in the first 90 days following their first purchase, Bock says.

“Three days after their purchase, it’s ‘Thank you. How was your order? Tell us what you think,’” he says. A second message several days later introduces the customer to Road Runner’s shoe experts, and a third message several days after that features content on topics such as how to select the correct shoe.

The result: a 45% to 50% increase in open rates among first-time buyers, a 5% to 10% increase in average order value, and a 10% to 15% increase in revenue per first-time customer, Bock says.

Frequency and relevance

Road Runner’s new e-mail strategies address what experts say are the two most important-and closely related-factors in whether a customer becomes burned out: frequency and relevance. And they’re two factors that retailers struggle with. “If there’s a question we consistently hear, it’s ‘What is the right frequency,?’” Sweetser says. “We’d love to give a pat answer but the truth is that it’s driven all by the relevancy of that messaging.”

Many experts typically recommend cutting back the number of e-mails to protect against customer burnout. But Spiegel Brands Inc. boosted sales by 30% to 40% by increasing the frequency of e-mail, says Yun-Hui Chong, divisional vice president of e-commerce.

Spiegel Brands sends e-mail on average three to four times a week, a frequency set after testing intervals ranging from once a week to four times a week with panels of customers. “The panel that was receiving less e-mails from us wasn’t buying as much from us,” she says. “Within the fashion business, a woman does want to receive news about the latest trends.”

Spiegel’s decision to increase frequency was based in part on the changing behavior of its customers, Chong says. Today’s Spiegel customers may not be interested in shopping online on one day but may be in a buying mood the next. By sending e-mails several times a week, Spiegel keeps its brand in front of customers, she says.

Just ask

In contrast, Chiasso.com, a home furnishings and accessories retailer, finds that e-mails sent every two weeks produce the best results. Like other retailers, Chiasso.com tried several frequencies, starting with a once-a-month schedule. “That’s not enough to really be out in front of customers all the time,” says Jerry Berquist, IT manager.

Then Chiasso tried a weekly schedule but found that customers got burned out. “We started to get more people unsubscribing and complaining about the frequency of the e-mails,” Berquist says.

One simple way to avoid flooding customers with too many e-mails is by asking them how often they want to receive messages, says Stefan Pollard, director of consulting services at EmailLabs, a unit of J.L. Halsey Corp. “When the customer is opting in, you can give her frequency choices,” he says. “Then, you can include in your subscription center the ability for customers to change their preferences.”

Spiegel also practices a variation on this strategy. If a customer decides to unsubscribe, the retailer offers her the option of staying on the e-mail list but decreasing the frequency of the messages. “We’ve seen clients where up to 14% of customers who have hit the unsubscribe link have actually been saved by including that option on the opt-out page,” says Rachel Bergman, vice president of client services, CheetahMail, a unit of Experian.

Retailers also can survey a selected list of consumers-for example, those with the highest open, click and conversion rates-about how they feel about the frequency of mailings, Pollard says. “You might be able to determine a lifecycle where consumers are very engaged early on, and then three months in, you need to slow up,” he says.

But frequency becomes a secondary issue if the content of the message is right. “One of the big topics people talk about is over-e-mailing,” says Colopy of Bronto Software. “If you have good content that people want, you can push that frequency higher.”

Too often, retailers turn off customers by sending messages that have no value to them, Pollard says. “You don’t want to send wakeboard offers in October or November when customers are snowboarding,” he says. “The e-mail has to be relevant.”

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