Boosting Email Marketing Revenue with Recommendations

Boosting Email Marketing Revenue with Personalised Recommendations

Our Presenters• Chloe Rigby

Web Editor – Internet Retailing

• Rolf DoerrDirector, Business Development – Baynote

• Alistair McLeishCTO, Musicroom.com

• Richard EvansDirector, Marketing – Silverpop

Today’s Agenda

• Personalising the Web• The Concept of Collective Intelligence• Creating the Customer Experience • The Power of Triggered Email Marketing• Personalising Email Marketing• Live Q&A

MEETING REVENUE TARGETS IS STILL CHALLENGING

Widening Gap

Expected Revenue

Incremental Gains: Not Good Enough

FAILING TO MEET REVENUE EXPECTATIONS

Acquisition Costs Through Roof

Conversion Rates Are Stuck

Average Order Size is Flat

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CONVERGENCE OF RECENT MARKET DYNAMICS

Higher eCommerce Revenue Targets

eCommerce growing at 12.6%/yr. Senior execs and board perceive online channel as a “miracle cure”

The Battle for Consumer Attentione-Commerce dominated by large players, brands selling direct, increasing global competition

The Result: Increasingly Difficult to Make Your Revenue

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Social, mobile, local, flash sales, group buying, video, what’s next???

Consumers are Ahead of Merchants

Rising CommerceComplexity

More sku’s, prices, bundles, terabytes of data to analyze, multi-channel touch points,internationalization

BREAKING THROUGH THE 3% CONVERSION BARRIER

Traditional online personalization strategies are based on past shopping history and profile data.

20% of online shoppers have an intent to buy, but only ~3% actually purchase.

Personal in-store experience starts with understanding and acting on intent – “how can I help you today?”

In comparison, 30% of shoppers who enter a physical store complete a purchase.*

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TODAY’S REQUIREMENT: NEW APPROACH TO PERSONALISATION

Traditional ProfilesAnd Targeting Rules

WHOare you?

Revenue Multiplier Effect … Across All Channels

UNDERSTANDWhat is your intent,

this time?

ACTDeliver relevant

product & contentat every moment

RESPONDContinually adapt to ever-changing

interests

Buyer Intent Streaming Modeling

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POLL: Do you currently use recommendations on your website, in email or both?

Adaptive Web: Automated, real-time, and personalised

…page refers, links, entry trails,queries, page sizes, mouse movement,negative experience, virtual bookmarks,

time spent, exit trails…

UseRank

ENGAGEMENT

Baynote Secret Sauce: UseRank®

Musicroom.com

Music Sales Ltd.

• Musicroom.com Europe’s largest online store for printed music and related materials for

musicians, including tutor methods, instruments and accessories. Started in 1996. 18 high street stores in the UK and Ireland. Part of the Music Sales Group, an international family of music companies with

interests in music copyright, printed music, book publishing, music retail & digital publishing.

Recommendation Challenges• Catalogue size

With 150,000+ products, some very niche, how to manage recommendations effectively.

• Playing an instrument is personal Listening to music is passive, playing it is active. So targeting must include not only genre & instrument, but also skill level.

• The Problem with Customers Also Bought... Ignores new and long tail items with insufficient purchase history. Ignores 95%-98% of user activity. Doesn’t provide an alternative / up-sell technique.

• Optimising Search How to order search results?

Musicroom.com Recommendations• Product Page

As an alternatives/up-sell or cross-sell technique.

• Search Results & Category Pages Placing results that users currently find relevant at the top search.

• Basket Page Cross-sell complimentary items, missed deals etc.

• Artist A-Z Artist Tag cloud

• Email Recommendations Follow-up emails include related items.

• Future: Using 10 different metrics to customise experience.

Musicroom.com Recommendations

• Product Page– As an alternatives/up-sell or cross-sell technique.

Musicroom.com Recommendations

• Search Results & Category Pages– Placing results that users currently find relevant at the top search.

Musicroom.com Recommendations

• Basket Page– Cross-sell complimentary items, missed deals etc.

Musicroom.com Recommendations

• Artist A-Z– Popular Artist Tag cloud

Musicroom.com Recommendations• Email Recommendations

– Follow-up emails include related items.

Recommendations - 2 examples• Crowd-sourced recommendations

Basic recommendations algorithms can suggest related products based on meta-data. i.e. With a flute, recommend flute strings, flute books, flute cleaning products.

Crowd-sourced recommendations can make associations that are not present in product data. o E.g. Recommend a music stand with a flute.

• Real-time recommendations Trends in how music is consumed often moves fast Real-time recommendations can give products exposure without marketing

intervention.o E.g. Ubi Caritas at the 2011 Royal Wedding

Recommendations Results• Conversion Rate increase

Users clicking on recommendations convert at a rate of ten times the site average.

• Average Order Value increase Significant AOV increase for those using recommendations.

• Margin increase Ability to add business rules allows recommendations to target high margin areas

of the catalogue.

• Business Knowledge Which content do users find interesting and engaging. Which internal search terms are not producing the required results?

Recommendations in Email Marketing

Relevant Emails Rock!

Note: Metrics and salary costs based on JupiterResearch executive survey. Broadcast assumes $3 CPM, and all others assume $4.5 CPM. All assume $89 AOV, 50 percent product margin, and 2.8 million pieces of mail per month.

Triggered Email Program Benefits

Highly relevant to individual

Beyond the buzzword... This IS Relationship Marketing

“Set it and forget it”

Incremental revenue

POLL: What types of triggered email marketing are you using?

Low Volume

95.9 %Batch Campaigns

4.1%TriggeredCampaigns

Volume of Emails sent

Low Volume, High ROI

59.8 %Batch Campaigns

40.2%TriggeredCampaigns

95.9 %Batch Campaigns

4.1%TriggeredCampaigns

Sales GeneratedVolume of Emails sent

Type of Post-Purchase Email Percentage Deploy

Service satisfaction 50%

Product Review Request 43%

Recommendation (since you bought this, you might…) 29%

Do not deploy post purchase emails 26%

Bounceback 21%

Cross sell/Upsell 19%

Happy Birthday Promotion 17%

Reorder/Replenishment 17%

Purchase Anniversary Promotion 12%

Product Review Posted Notification 2%

Survey: Deploy Post Purchase Email?

Reminders…almost out of stock

Open, CT and Conversion Rates that are MORE THAN DOUBLE

broadcast email rates

Average Order Value is 53% HIGHER

Marketers: Pick a Door

Average Open Rate of 47%Avg Click-through rate of 20%•Recipients receive only 87 of these messages per year•Customers find this door twice as interesting as door #2

• Average Open Rate of 31%• Avg Click-through rate of

6%• Recipients receive 3,694 of

these messages received per year

Door #1 Door #2

Source: Jupiter Research “US email Marketing Forecast, 2007 to 2012”Source: Quris, Harris Interactive, Executive Summary Consulting, November 2004Source: Forrester Research, September 2003

Door #1 Door #2

Transactional Commercial

• Average Open Rate of 47%• Avg Click-through rate of

20%• Recipients receive only 87

of these messages per year

• Customers find this door twice as interesting as door #2

• Average Open Rate of 31%• Avg Click-through rate of

6%• Recipients receive 3,694 of

these messages received per year

Marketers: Pick a Door

Customer Examples and Results

Intent Model

Profile & Content Input• Demographics• Preferences• Past history• Catalog

Email• Order confirmation• Shipping confirmation• Re-targeting • Product review

Social• Facebook Fan Page• Facebook News Feed

Mobile• Mobile Site• Mobile Apps.

Chat• Reactive Chat• Proactive Chat• Exit Chat

In-Store• Kiosk

Website• Home page• Landing page• Category page• Product page• Search page• Etc…

Personalization Zones

In-Session Behaviors• Keywords• Scroll• Etc…

• Navigation• Dwell time

Why Add Recommendations?

According to a Forrester survey: 74% unsubscribe from email lists because of irrelevant content

Order Confirmation

Best Practice:Recommend accessory itemsor complementary items for each product in cart

Shipping Confirmation

Best practice:Recommend accessory itemsOr popular items in same category

Cart Abandonment

Best practice: - Send within 24 hours for optimal results- Recommend similar items- Use business rules to determine if up-sell can be done

POLL: How long do you wait to follow up on abandon carts, etc?

Follow Up Timing

Stage Conversion Open Rate Revenue / Email

1: Real time 11% 60% $11

2: 24 hours 6% 55% $4

3: 7 days 3% 50% $3

Total 20% Average 55% Average $6

• Personalize your transactional emails with relevant recommendations to increase conversion (Transactional emails have open rates upwards of 60-80%)

• Retarget and convert lost customers with targeted emails based on cart/browse abandonment

• Effectively market to and convert customers with special offers

Order ConfirmationCart/Browse

Abandonment Special Offers

Baynote Improves Email Relevance to Increase Conversion Rates

Tablespoon.com

• Using Baynote in Marketing Campaigns

• Delivering Related Recipe Recommendations

• Increasing Engagement with Tablespoon.com

Use Cases

Netshoes

• Using Baynote in Cart Abandonment and Out-of-Stock Alerts

• Delivering Related Product Recommendations

• Increasing Revenue through Cross-Sell and Up-Sell

Use Cases

Fingerhut

• Using Baynote in Order and Shipping Confirmations

• Delivering Related Product Recommendations

• Increasing AOV through Cross-Sell

Use Cases

Potential 5% UpliftEmail Type Best Practice Potential Revenue

UpliftCart Abandonment Recommend similar

items and/or up-sell 2%Browse Abandonment Recommend similar

items and/or up-sell 2%Deal of the Day Recommend most

popular items 1%Special Offers Product club

segmentation 1%Order Confirmation Recommend

accessory/complimentary items

.5%Shipping Confirmation Recommend accessory

items .2%

5%+ Revenue Lift Potential by Adding Email Recommendations

Wrapping Up

• Personalised product recommendations create a more relevant experience on site and in email – leading to more engagement.

• Including recommendations in triggered email marketing can lift revenues from 5-12% by providing more options and a more personal experience.

• Implementation shouldn’t be daunting. Much of your investment has already been made in your email marketing solution.

Q&A

About Silverpop

• 1,400+ customers

• Across 38 countries

• 95% customer retention

• >2B msgs sent per month across our customer base

About Baynote• 300+ customers

• Across 23 countries

• Delivering 3bn+ online recommendations each month

Resources

• Resource Centreat silverpop.com– White papers– Webinars– Blogs– Case studies– Newsletters

• Presentations on SlideShare– www.slideshare.net/Silverpop

Thank you!