Notes from "Building a Retail Email Marketing Powerhouse"

I attended an ExactTarget.com webinar last night on "Building a Retail Email Marketing Powerhouse". It was a very informative webinar showing how an online retail business has built its email marketing program. What was really interesting is how ExactTarget's client uses behavioral data in almost all its email targeting. They really get down to the nitty gritty in predicting the buyers next move in the buyer life cycle. My responses in italics.

The course started out showing some data on the best ways to communicate to your buyers according to ROI. Online marketing was at the top. Email showed a ROI at $45.65/$1 and non-email online marketing was at $20.19/$1. After email and non-email, direct marketing followed. This data is a good follow-up from yesterday's post for my statements on how company blogging serves as a great marketing tool from an ROI perspective.

After a short introduction to some figures in ROI, ExactTarget's client goes through some of the ways they have developed their program.

The clients customers opt-in to emails both in-store and on the website. In-store managers gain incentives on email capture over a monthly basis and the data capture is controlled for quality (making sure they didn't input their sister's 8 email addresses and all her friends different email addresses). A good control method for the store manager's data capture would be a purchase receipt. Not only will we prove that data is quality customer data, we will also have direct data on the customer's purchase and behavior. What did they purchase? At what price? How did they pay? Etc.

Then the client's customers are inserted into a database where they will be segmented by channel of purchase, end use of product, price points, and purchase history. These are the defining segmentation of the client's buyer life cycle and predictive modeling email programs.

In the client's buyer life cycle program, the life cycle has 3 stages. First, the welcome stage where the customer will receive a series of 3 emails. A thank you email, a branding email, and a services offered email. All 3 emails are not delivered in the same moment nor the same week. Each customer has overload controls where ExactTarget's software will alert the client if the customer is receiving too many emails. However, the controls are not made by ExactTarget, ExactTarget has designed its software so that the client can make the control inputs. This first stage is called the nurturing stage. I think 3 emails in the nurturing stage are too many even though all 3 emails have a good purpose. In this stage such emails as branding and services can be consolidated. So instead of receiving three emails, the customer will receive 2 - one welcoming and one showing the brand and its services. Overloading the customer can happen too quick and once you lose a customer, it takes triple the effort to gain her back.

The second stage is the repurchase stage. In this stage the predictive modeling comes into play. The client's predictive modeling is done manually and is very targeting looking at the segmentation noted earlier. They build groups with similar behavior through the segmentation and email to those groups on what, where, and how much they might purchase next. If there is a low conversion rate, they beef up the repurchase email stage by tweaking the group predictive model and offering a discount. I think this was the best part of the webinar and the real quality in this type of program. The predictive modeling is great yet it costs lots of hours and may make a small marketing team inefficient due to its manual segmentation. As an e-marketing manager, I would hope that I could depend on a good assistant to sort out the data and segment the customer profile.

The third stage is reactivation. Here an email is sent if the client is inactive after two years. In this stage the client sends an email offer to its customers with deeper discounts like free shipping or gifts with a purchase. A two year lapse is WAYYYY too long. I would give a client no more than 6 months of inactivity, offer an opt-out and a better way to get involved again. For example, an email stating something like "I have seen that you have been inactive for more than 6 months so I wanted to offer you a $25 gift card to come back to the store and see if you like anything we have". And at the bottom of the email, a clear option to opt-out of the email program. This helps keep my list lean and mean.

After an extensive session of examples and explanations, the clients offers some keys to success:

• Customer's first: Always develop material thinking from the customer's perspective
• Singles: Don't try to do everything at once. Email programs take time and testing
• Improvement: Always keep improving
• Relevance: If you are not relevant, nobody pays attention
• Not all customers are equal: No one formula works for all of us

Further information can be found at exacttarget.com.

I hope you liked today's post. Have a good day and leave comments.