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Silverpop and partner Baynote take a look at using recommendations in email marketing to drive cross- and up-sell. Joined by the CTO of Musicroom.com, the team take a look at a dozen or more real-world examples of how personalised recommendations are driving conversion in triggered email marketing programmes.
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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
5
The
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nue M
ultip
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ffect
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
3
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.*
7
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
6
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!