Mark PatronJune 2011

How to recapture lost sales and make more money

Email Remarketing

The Leader in Behavioural Email

IntroductionRemarketing via email is one of the best ways torecapture lost sales and improve ROI. This whitepaper will help online marketers understand thebenefits of using email remarketing and provideclear information on how email remarketing works.It includes advice on best practice email triggersonline marketers can use to target new andexisting customers and provides information onthe cost of remarketing and guidance on privacyand security.

At the back of the paper we have provided twocase studies of RedEye clients who have achievedoutstanding results from email remarketing.

We hope you find it useful!

Why use emailremarketing?Remarketing uses two of the most importantcriteria for producing targeted marketing - recencyand frequency. Any direct marketer will tell you the more recent the data the higher theresponse. Frequency is also important. Studiessuggest that a company needs to have seven different‘contacts’ with a customer (on average) before theymake a purchaseI. To look at this another way, youneed to get someone back to your website seventimes before they buy, and email remarketing is

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one of the most efficient ways to do this.

The average website conversion rate is only 2% to 3%, so there is clearly a lot of room forimprovement. With this in mind it is often morecost effective to spend money improvingconversion than spend the same amount drivingmore traffic to the site; and one of the simplestways to improve conversion is email remarketing.Digital marketers are often frustrated by the factthat some 70% of shoppers add something to theirbasket but never complete the purchase. So, howdo you go about clawing back these lost sales? There are many reasons for basket abandonment.Assuming you have undertaken usability testing tostreamline your checkout process and madebuying easy and transparent on your website, andthere are no hidden shipping costs or confusingpayment options to put users off, then one of thebest ways to improve conversion is emailremarketing. Your most valuable prospects arethose who nearly bought something and emailremarketing allows you to keep in contact withthose prospects. Sadly, prospects don't come backto your website frequently enough. To improverevisits and sales, remarketing is necessary andextremely effective.

For well qualified prospects email remarketingspeeds up the process of making a sale that mayhave otherwise gone to a competitor.

Forrester ResearchII found marketers integratingweb analytics data to drive remarketing emails cangenerate nearly 4 times more revenue and 18times greater net profits compared with marketersusing simple untargeted mailings.

Research by MarketingSherpaIII (see Fig 1) showstriggered emails and emails segmented by users’behaviour are the most effective. Historically,remarketing emails have been difficult to do.However, suppliers have recently started to makethe process easier, to the extent that now anumber of suppliers offer a remarketing emailfree trial.

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What is email remarketing?

There are many types of automated emails, so let’sstart with some definitions.

Remarketing email refers to the techniques,strategies and often the automated email systemsused by marketers and online merchants to follow upwith website visitors who do not make a desiredaction on the websiteIV, for example when theyabandon their shopping basket. Email remarketing

means sending timely emails to people who havebeen on your site. The message you send themdepends on what they did on the site. If theynearly bought something then maybe a simplereminder will get them back to the site to buy. Ifthey bought something but on the way spent fiveminutes viewing pages about another productthen send them a message about the otherproduct they were viewing.

Fig 1

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Examples of remarketing emails

1. Process drop out (abandoned basket)

2. Quote and viewed another product (cross sell, if the user requested a quote for car insurance but also viewed life cover plans, send them an email about the life cover you provide)

3. Initial registration and introduction process drop out

4. Registered not purchased

5. Quote not purchased

6. Single purchase (discount to purchase again)

7. Occasion (birthdays, anniversary of purchase)

8. Reactivation (not booked for 3 months)

9. Cross sell (viewed not purchased)

10. Site error or error registering

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Trigger emails are emails that are automated torespond to an event. For instance, someonecompleting a registration form can instantly receive a ‘thank you for signing up’ trigger or if they abandona basket, an email is triggered to that person toencourage them to complete the purchase. Triggersare relatively straightforward. CMS and e-commerceplatforms often have trigger facilities and most webanalytics companies provide facilities to link visitorinformation to your email service provider. v

Behavioural email is based on an online databasethat collects all web and email engagementinformation and can also be fed by offlinebehaviours. Thereby it automates and constructsemails based on recent web engagementinformation and indeed any other informationavailable to the database. The key is the fact thatbehavioural email marketing is driven by an onlinedatabase that integrates web analytics and emaildata. So rather than just delivering a basketabandonment email about the specific products inthe basket, the incentive to complete the basketmay be to discount a separate product that theindividual has browsed recently (for instance‘complete your basket and get this product 15%off’). Behavioural strategies are based on the wholeinteraction with the customer or prospect and notsimply the last event. Customer history, togetherwith current engagement, is used to enable morerelevant and timely automated emails.

Transactional emails are used as a result of atransaction (for example welcome or confirmationemails). Transactional email may be generated bythe e-commerce platform which tracks all websitetransactions. Remarketing or behavioural emailson the other hand do not just rely on transactionsbut may be based on a user’s website behaviourand therefore typically use web analytics data.

Clearly there is some overlap in the definitionsabove, but this does not really matter. Theimportant thing is to understand the differencesbetween the different types of automated emailand then to use the most appropriate for yourapplication.

How does emailremarketing work?Email remarketing normally combines webanalytics and email marketing. Take for example abasket abandonment email. This is simply an emailsent out to any customer that abandons theirshopping cart. To be effective, the email has to goout soon after the abandonment has happened,and this generally means some form ofautomation.

When you use remarketing, you'll tag pages ofyour site in the sales funnel. You might tag the firstpage of the sales funnel and the confirmationpage. You might also tag the page where the emailaddress is collected. Emails are then simply sent tothose consumers who start the sales funnel, opt into receive email, but do not complete a purchase.

By coupling web analytics technology with emailmarketing in one integrated system, marketershave the ability to track customer activity on theirwebsites and then deploy messages to thosecustomers in real time.

Regardless of the web activity marketers wish toact upon (shopping basket abandonment,different products viewed, page views, searchkeywords, registration forms) email remarketingcan harness valuable behavioural data to enhancecustomer interactions.

Remarketing allows you to communicate withpeople who have previously visited key pages onyour website, giving you a powerful new way tomatch the right people with the right message.

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How to improve youremail remarketingRelevancy improves results; it’s as simple as that.Relevancy can be improved by better targetingand recency.

Recency improves response. A basketabandonment email done manually that goes outonce a week will drive more sales but nowherenear the amount of sales timely automated emailswill achieve.

Be careful not to send remarketing emails soquickly that they arrive before the consumer hasfinished the session and truly abandoned theshopping basket. Waiting 30 to 60 minutes is asafer option.

Once remarketing email programmes get goingthey can generate hundreds of different emailstargeting users who have not fulfilled any numberof key actions on the site. Creating targeted emailsusing rich web analytics data will drive morerelevant communications. A simple basketabandonment email can turn into several emailstargeted and individualised to each step in thesales funnel. Similarly, cross selling emails can betargeted at each individual product or productcategory viewed but not purchased.

Automation is key. It is impossible to develop a richemail remarketing programme unless it isautomated. Email remarketing programmes thatallow for dynamically driven automated emailmarketing also minimise costs and humanintervention.

Reach is important. Some email remarketingsystems can only remarket to consumers who weredriven to the site by previous emails. Clearly thiswill miss the majority of consumers who will havegot to the site via another route. This is often aproblem with combining separate web analyticsand email systems for technical and privacy

reasons. It is impossible to properly synchroniseseparate web analytics and email marketingdatabases. Ideally they should be in one database.

Database driven is best. For example, manysuppliers of email remarketing do not recommendincentives in basket abandonment emails. Thevery valid reason for this is there is a danger oftraining customers to abandon baskets inexpectation of a discount or free delivery. However,if you use a database driven system you candifferentiate between first time and multiple timeabandoners. That way you can send an incentiveon the first or first two times when a consumerabandons a basket but not to someone whoabandons multiple times.

Registrations are important because the moreregistrations there are, the more remarketingemails can be sent. Incremental revenues fromemail remarketing increase in proportion to thepercentage of opt-in emails collected. A commonissue is when the email address is collected at theend of the sales funnel rather than early on.Registration should be included early in the buyingprocess, enabling acquisition of more emailaddresses for remarketing. However, this must behandled with a light touch and included within thebuying flow. Positive language in the copy canmake all the difference. For example, Amazon’s firstpurchase step, which is essentially registration, islabelled as ‘Welcome’. When an account needs tobe created the benefits of signing up need to bemade clear; let the user know they will be able totrack the progress of their order, and remind themof the time they will save when placing their nextorder.

Testing improves results. Test recency, frequency,incentives and where the email address iscollected. Test everything that could improveresults, particularly those things that couldimprove results a lot. Best practice is to developyour email remarketing programme over time (see Fig 2). Remarketing emails develop like a treediagram. Each email is tested for its ROI, and highROI emails become candidates for further

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refinement. So, a simple basket abandonmentemail quickly turns into a programme of differentemails targeted at different products. Not all testswill work and certain branches in the tree will runout of juice giving no more uplift. This approachalso highlights the requirement for flexibility. Sadly

many companies go through so much pain gettinga simple basket abandonment email going theythen do no further testing, forfeiting furtherimprovements and revenues.

Fig 2 - A retail example of how email remarketing programmes can evolve

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How effective is emailremarketing?

The best time to contact someone is when theyhave nearly bought something. So not surprisinglya single cart or basket abandonment email willtypically generate 2% to 5% extra revenue. Threeor four well targeted remarketing emails should be able to produce around 4% to 8% incrementalsales. A few dozen good remarketing emails candrive 10% extra sales.

According to RedEye’s Behavioural EmailBenchmark StudyVI , companies using remarketingor behavioural email have achieved conversionrates as high as 15% and click through rates ashigh as 65%. However, the report shows themajority of online companies are failing to useemail remarketing to recapture lost sales byimplementing programmes such as abandonedbasket and quote not buy. Only 13% of retailcompanies implement abandoned basket email.Simple confirmation emails are more commonlyused with 81% of retail companies sending awelcome email and 73% of insurance companiessending a quote confirmation email. This higherfigure is because, until recently, it has been easierto implement transactional email thanremarketing or behavioural email.

What does emailremarketing cost?

There are now a number of companies, includingRedEye, that offer remarketing free trials. Thisenables you to test the validity of doing emailremarketing on a low risk basis. The suppliershould send you daily progress reports on thenumber of emails sent, number of orders andmoney made. From this you can easily work outpotential return on investment.

Privacy and securityThere have been many examples of poor internetsecurity covered in the press. It is obviouslyimportant that any supplier meets the highest datasecurity standards. It is vital that all data is keptsecurely and data transfers are only done via securemeans such as a secure FTP (File Transfer Protocol).

Clearly you cannot remarket to consumers withouttheir email address and as with any emailmarketing, users must opt in to receive emails first.In addition your website privacy policy should beclear about how cookies are used for remarketingpurposes.

The future

The outlook for email remarketing over the nextfew years is bright as more and more suppliersoffer more competitive offers and moresophisticated email remarketing technologies aredeveloped.

Email remarketing is a great way to re-engagecustomers in a timely and relevant way. Mostimportant of all it typically gives one of the highestreturns on investment of any marketingcommunications.

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Case Study: Haven HolidaysRemarketing Campaign: Booking AbandonmentROI: 2815% | Open rate: 54% | Click through rate: 53%

Haven Holidays was finding a proportion of their onlinecustomers began the booking process, but dropped off beforeconfirming their holiday booking. Haven wanted to find a wayto target these customers and increase ROI. RedEye’s uniquemethod of data capture enabled Haven to capture where userswere dropping off in the buying cycle. These customers werethen remarketed to via email, segmented by where in thebooking process the customer dropped off and the type ofholiday they were viewing.

All emails were sent within 24 hours of drop off. Reachingcustomers in this time scale helped to entice customers back toHaven.com while the holiday was still fresh in the customer’smind. Whenever possible the behavioural emails werepersonalised. Personalisation and information specific to theuser helped to entice the customer to read the email and react to it.

“We have been working with RedEye for 4 years andare impressed with the innovation they have helpedus to implement and the subsequent improvement inresults. Using an automated abandoned basketcampaign has been a great investment. Being able toconvert drop out customers with relevant, timelybehavioural email has really paid off.”

Case Study: Evans Cycles Remarketing Campaign: Booking AbandonmentROI: 2399% | Year on year increase in email revenue: 100%

| Open rates: 84.9%

Evans Cycles, the UK’s largest quality cycle retailer, has achievedsignificant business growth despite the economic downturn.Determined to perpetuate success, Evans Cycles wanted to find a way of optimising email marketing to improve revenuefurther.

To improve campaign targeting and subsequentlyperformance, RedEye worked with Evans Cycles to formulatetheir segmentation to remarket to new and existing customersvia email. Email messaging and creative content wassegmented based on individual email preferences, engagementand online browsing and purchasing behaviour. This ensured allemail marketing content was relevant to each individual user.

Using RedEye’s email engagement segmentation, Evans Cycleswas able to remarket to consumers based on an individual’slevel of interaction with email. In addition to uplifts in open andclick rates, the percentage of engaged people increased by 29%and the database also grew by 17% in 3 months.

“We are extremely impressed by RedEye’sdetermination to continually drive our emailconversion through on-going reviews and testing ofcreative, timings and segmentation. Evans Cycles hasexperienced significant growth in the last 12 monthstowards which RedEye has played an integral role inour success.”

Will Lockie, Online Marketing Manager, Evans Cycles

Alison Dunn, Head of Ecommerce,Haven

References(I) Wikipedia, February 2011 (sourced from http://en.wikipedia.org/wiki/Behavioral_retargeting)(II) Forrester Research, February 2009, Integrating Web Analytics with Email Marketing to Improve Campaign Performance(III) MarketingSherpa, Email Marketing Benchmark Survey, 2010(IV) Webopedia, ecommerce remarketing (sourced from http://www.webopedia.com/TERM/E/ecommerce_remarketing.html)(V) Matthew Kelleher, October 2009, Econsultancy blog “Defining trigger, remarketing and behavioural emails” (available athttp://econsultancy.com/uk/blog/4831-defining-trigger-remarketing-and-behavioural-emails)(VI) RedEye Behavioural Email Benchmark Study, March 2011 (available for download fromhttp://www.redeye.com/events/whitepapersandreports/behavioural-email-benchmark-study-2/)

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