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by Loren McDonald
One of the most exciting aspects of email marketing is the ability to generate substantial revenue from an ecommerce or promotional email campaign. However, the perception of email marketing is often that you simply prepare your email, send it out and then sit back and watch the revenue roll in. Well, not so fast.
A successful ecommerce program requires more effort than just sending out an email newsletter. As a result, many companies are leaving a lot of money on the table by not segmenting their customers and utilizing more advanced email technology features, such as the EmailLabs solution provides - including segmentation by demographics and actions, personalization, trigger-based emails, and detailed tracking of customer responses. But achieving dramatic gains in revenue does not require an Amazon.com-like investment in technology or infrastructure.
With a little extra effort, ongoing analysis and testing and refinement, most companies can double or triple revenue from their ecommerce program in just a few months. In this article, we'll provide tips and suggestions on list building, email creative, list management, segmentation, offers, delivery and testing. And even if you aren't selling products or services via your email program, there are a number of ideas and tips in this article that you can apply to your newsletter, announcement, or other emails.
Read further for the following Tips:
List Building
One of the most effective (and obvious) means to increase revenue from your ecommerce email is to grow your list. Here are some quick suggestions to move your list towards a consistently upward growth trend:
- Web Site Form: Perhaps the single most important method of growing your list is by optimizing your email subscription form on your Web site. Don't rely just on your home page to capture new subscribers. Many of your visitors may enter your site from a search engine on a specific page. If possible, a simplified form - or at least an impossible-to-miss image that links to the form - should be included on every page of your site. Additionally, many consumers will need an incentive before they will sign up for anything. Consider offering them a discount ($10 off), Free Shipping on orders over $100, or other incentives taken off their first order.
- Shopping Cart Form: Most Web sites capture a customer's email address during the check out process for order and shipping confirmations. But, it is critical that you also strongly promote an opt-in check box for customers to receive your ongoing promotional emails. Additionally, use this opportunity to solicit additional information that may help you better target your customers down the road and provide emails that are more relevant to customers. This might include demographics such as their gender and preferences, such as product interests. This information can be gathered to send more targeted emails down the road.
- Search Engine Pay-Per-Click Programs: Various research studies indicate that search is one of the most frequently used means for consumers to find products online. Many etailers find that pay-per-click (PPC) programs such as Google, AdWords, and Overture can drive significant traffic to their site. If you utilize these programs, as mentioned above, it is important that you make it easy for visitors to sign up for your promotional emails - whether or not they make a purchase.
- Search Engine Optimization (SEO): Optimizing your site for search engines can be one of the most cost-effective means to driving traffic and growing your list. Whether you use an external SEO consultant or handle it internally, make sure you optimize every page of your site to achieve top rankings for the products listed on each page.
- Refer-A-Friend: Utilizing your email technology's "Refer-A-Friend" feature can generate a consistent number of new subscribers. If you promote the refer-a-friend program (i.e., $5 off to the person who forwards the email) - a typical forward rate might be in the 1.5% range, with 10% of the new recipients actually subscribing. On a list of 100,000 that means you would gain 150 new subscribers - not a large amount, but it may be enough to offset your unsubscribes each month.
- In-Store Promotions: If you have retail locations, make sure you promote your email offers in your stores. Have sign-up forms at the cash registers, promote subscriptions with point-of-purchase displays and train your employees to encourage email sign up.
- Media Buys and Newsletter Sponsorships: Obviously, advertising - both online and offline - will drive more traffic to your site, which can then be converted to email subscribers and customers. Banner ads average about 0.25% CTR. Newsletter sponsorships (text or banner ads within the email newsletters) typically have similar CTRs, but can be very effective. Whatever your offline/online advertising program entails, it should include driving potential customers to a landing page, as well as messaging that encourages people to subscribe to the promotional emails.
- Direct Mail: Just because you may have become an email convert, don't overlook direct mail. If you have mailing addresses for existing customers, consider sending a direct mail piece enticing and rewarding customers for signing up for your promotional emails. Secondly, consider renting some quality lists and conducting similar subscriber acquisition campaigns. You may also want to consider card stacks, inserts and shrink-wrap programs with magazines that target your market - particularly in combination with a strong offer (discount off first purchase, free shipping, etc).
- Email Campaigns (rented opt-in lists): If quality opt-in email lists are available for your product area, consider testing the ROI of email subscriber/customer acquisition campaigns. These campaigns can be fairly expensive, but if you break even, you've in essence grown your customer list at no net cost to the company.
Creative
Your email's creative - copy, design and offer - is what gets your customers to open, read and take action on the email. How important is the creative? A compelling subject line that resonates with your customers could increase your open rate by 50% - a jump from 28% to 42%, for example. Solid offers in combination with great design and copy could double your click-through rate - such as an increase from 6% to 12%. Add that up and combine it with a well executed web site and your conversion rate could also double.
Sounds like a lot of work, right? Well, it certainly takes more effort than slapping together a basic email; but, once you develop your email template, it doesn't take a tremendous amount of effort. So, here are some quick suggestions to improving your creative:
- More Products & Categories: Customers like options. If you are sending the same email to everyone, you need to provide them with a variety of choices to whet their appetite. If you sell products in various categories - Running, Cycling, Camping, Fishing, for example - you need to offer a few product options in each category, or you aren't likely to get their attention. Your avid cycling customer is just not likely to click through on the fly fishing rod, no matter how great a deal it is. You may also want to include regular features, such as "Email Specials," "Product of the Month" and "Brand Specials."
- Navigation: Leverage your website's navigation. Remember, your email is basically an extension of your Web site. Make the navigation consistent with your Web site - but also highlight key areas of your Web site that are likely to get customers to take action. If you have Bargain Basement, Closeouts, Featured Products and other areas on your site - use them in your email.
- Search: If you have search capability on your Web site, add it to your email. Your customers can type in their search phrase(s), hit submit, and it will take them to your web site's search results page. You now have those people on your Web site, where you have the potential to convert them to customers.
- Personalization: Some studies suggest that the more elements of personalization in an email, the higher the response rate. At minimum, address your customers/subscribers by first name if you have it for all your customers. If you have more information - such as their interests and/or past purchase history - consider personalizing the copy or product selection. For example, using the earlier sporting goods example, you may want to personalize emails based upon each of the four sports. Each recipient would receive the same basic email, but with a few sentences of copy tailored to each sport and a special product offer. The most effective methods of adding this to your emails would be to either create separate versions for each customer segment or use dynamic message assembly and build these different versions on the fly.
- Copy/Tone/Personality: Every retailer has a personality - whether you are Wal-Mart, Amazon.com or Bob's Sporting Goods. Your email copy and creative design should reflect and leverage that personality. Don't underestimate the power of your copy. Many people will say that they don't read the copy - and they may be right - but you are writing the copy for the 10% that will read it and click through to your site, not the 90% that don't. Your copy should not only reflect your company's personality, but should also create a sense of urgency with your customers and motivate them to take action immediately.
- Links, Links and More Links: The main job of your email is to motivate recipients to click through to your Web site. Hyperlinks in an ecommerce email should not be like in-store retail salespeople - there when you want to be left alone, but nowhere to be found when you need help and are ready to buy. Put text, image and navigation links throughout your email so that a customer literally can't go anywhere without tripping over a link.
- Graphics: Consider using graphic images and buttons to draw recipients' attention. These images can visually convey things such as Free Shipping, Email Only Special, Buy Now and Limited Supply in combination with your copy.
- Subject Lines: Perhaps the easiest way to increase your ecommerce email revenue is by writing great subject lines. Not only do subject lines drive open rates, they also direct people like signs in a store window to specific merchandise once inside the store (or email). Learn from the most successful type of subject lines, such as: 10% off and Free Shipping on Brand X Gear. Utilize your key offers on your top selling products and brands when crafting subject lines. If your emails are more information-based rather than product-based, capitalize on the topic your readers would be most interested in for your subject line.
- Offers: A key goal of your ecommerce program is to generate maximum revenue at the highest margins. Continuously offering large discounts and free shipping clearly drive transactions and revenue, but finding the optimum combination is the key to profitability. One approach is to entice your customers to take action using special email-only offers. Secondly, test different approaches in your subject line, whether free shipping, discounts, or something similar, to determine which approach drives the most revenue and has the best impact on your bottom line. Thirdly, personalize your offers to your customer segments. Loyal customers might receive free shipping on their next purchase above $100, whereas new or low-value customers might receive 10% off their first or next purchase.
- Email Format/Versions: While we recommend that the core of your email program use the HTML format, it is important to also produce separate versions of your email in plain text and potentially Rich Text Format (RTF) formats for AOL subscribers and others who cannot read HTML. Even if only 5% of your subscribers either cannot read HTML or prefer text, producing well-crafted text versions of your email can pay big dividends.
"Push to Talk: Consider adding a "Push to Talk" feature to your email if you sell hard-to-fit clothing items or other products and services that benefit from personal contact. A "Push to Talk" feature enables a recipient to schedule a call back from your call center.
List Management
To ensure delivery of your emails and minimize email churn, actively managing your existing list is vital. A high bounce rate (from invalid addresses) may cause an ISP to block your emails (by assuming that you are a bulk spammer). Secondly, even if you have an average bounce rate of around 2% each month, this means that each year you may lose about 25% of your subscribers due to address changes. Here are some quick list management tips:
- List Hygiene: Customers often incorrectly type in their email addresses - make sure your email technology will find obvious errors such as a lack of "@." Secondly, review your list of bounced emails looking for other typos and errors such as name@alo.com instead of name@aol.com. Another option to help minimize incorrectly entered email addresses would be to require confirmation of the email address on the opt-in form on your website.
- Email Address Changes: Annually, 30% of consumers change their email addresses. This means that for a list of 100,000, up to 30,000 subscribers may be lost each year. To minimize this address churn, consider some of the following techniques:
- Include an "update email address" link in every email.
- Include a link to your account page or profile page in all communications and remind subscribers to update their email address and other vital information.
- Add a manage account/preferences page on your Web site, if it doesn't already exist.
- For customers whose email has bounced at least once or twice, send a postcard informing them of their invalid address and incenting them with an offer to update their email address. (Assuming you have known mailing addresses)
- Consider utilizing an email change of address (ECOA) service such as Return Path to obtain new/alternate email addresses for subscribers.
- Another approach is to ask customers/subscribers for a second email address. When the primary address bounces, emails can subsequently be sent to the secondary email address.
Segmentation
Segmentation is perhaps the single greatest benefit of email marketing technology, but one of its least used capabilities. You likely have a wide variety of data on your subscribers and customers, including gender, place of residence, interests and preferences, which emails they've opened and what links they've clicked on and their purchase history. You don't need a data-mining expert to take advantage of this information. You do, however, need to develop separate versions of your emails or variable elements of the email. Remember, the goal of email marketing is to deliver information that is as personally relevant as possible for each recipient. Here are some quick examples of segmented campaigns:
- Product Preferences/Interests: Many Web sites ask new subscribers to check off their areas of product interest - but then do nothing with that information. If you do have this data, take the extra time to create separate versions targeted to each product area. The entire email does not need to be different - you might simply tailor a featured product and the intro copy to each product area - with the rest of the email being the same.
- Gender Based: If you sell clothing, for example, consider creating separate versions for each gender or personalizing each email by including only relevant clothing items. At minimum, you may want to personalize the intro copy toward each gender by highlighting specific products.
- Action-Based: When an email recipient clicks on a link in an email, it demonstrates some level of interest in a product or service. If a customer clicks on a link for bike shoes, for example, you may want to send a trigger-based email a few weeks later that promotes bike socks and bike pedals.
- Purchase Based: Consider follow-up emails targeting customers who purchased similar products. For example, customers that purchased any golf-related product might receive a follow up email promoting golf balls, head covers and golf bags.
- RFM Based: Recency, Frequency and Monetary Value - known more commonly as "RFM" - is a means of segmenting your customers based on their value and likeliness to purchase. While RFM-based analysis can get very complex, most any email marketer can step their toes in the RFM waters. The simplest example of utilizing RFM analysis would be to send an email offering 10% off all merchandise in an email to those customers who have not purchased in more than six months. For your high value and recent purchasers, you might send emails more frequently than the rest of your customer base.
- AOL Subscribers: Because of their unique online preferences and AOL email software client issues, we recommend sending messages optimized specifically for AOL recipients. This can include:
- Creating special Rich Text Format emails (no graphics, but with bold text, hyperlinks, color)
- Including {Company Name} in the subject line (the AOL email client shows your email from address, but not from name.)
- Shorter and potentially more conservative subject line to ensure that it shows completely (AOL subject line space is shorter than other email clients).
- Disable the 1 pixel gif used to track open rates (this clear gif will set off the image warning in AOL - causing some people to delete the email without opening it).
Testing
Testing is critical to optimizing your ecommerce program. Every email campaign that you send should test at least one variable. As your program progresses, what you learn allows you to build off of each successive test results and continue to refine and test increasingly narrower variables. Don't forget to leverage the learnings from your online sales data. For example, the day of week and time of day that generates the highest number of transactions may be a good starting point for testing when to send your email campaigns. Aspects of your campaigns to consider testing include:
- From Line
- Subject Line
- Design Approach
- Copy Length and Style
- Offers
- Day of Week
- Time of Day
- Trigger/Follow-Up Emails
- Frequency of Emails
- Formats for AOL
Conclusion
In the end, the amount of revenue and growth you will achieve with your email ecommerce program depends upon how much effort you put into it. But don't feel overwhelmed if you have limited resources. Tackle a few improvements with each email and in a short period of time, you are likely to see significant growth in revenue from each email campaign.
If you have questions or comments, or have your own suggestions on growing email ecommerce revenues, please email them to marketing@emaillabs.com.
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