New Line Cinema's Director of E-Commerce Marketing Lisa Cross is in charge of online merchandise sales for major movies including Lord of the Rings, Harry Potter, Austin Powers, and the new Matrix movie that is coming out in May.

Like other eretailers, Cross primarily uses email to convince past customers and site visitors to return to purchase more. Every 2 weeks, she sends a new campaign to each of her seven list segments. “We’ll do one for Looney Tunes, one for Harry Potter, etc. We’ve seen a huge lift in segmenting like this.”

Here is more of what Cross has learned from email tests:

-> Subject lines that get the best opens

On subject line tests, New Line gets a 30% lift on open rates when the name of a movie is included. During the past holiday season, “Lord of the Rings Holiday Gifts” did 30% better than “Free second day air upgrade.”

Using character names is also big. When New Line used the name Legolas, a Lord of the Rings character, in the subject line, “the product sold out in weeks,” Cross says. However, Cross has learned not to feature the studio name. “With these movies, it’s much more important to brand the movie rather than New Line,” Cross says.

-> Higher opens do not always equal higher sales

Although New Line's sale emails get a 13% higher open rate than emails promoting a new product, the new product emails tend to click and convert at a much higher rate.

"In a recent series of tests, a new item email had a higher conversion rate, about 75% higher, than a sale email. On the click rate we saw about a 15 % lift,” Cross says.

That does not mean you should run all new product emails. Cross mixes her offers on a schedule. She will typically send a new product offer, rest the list for a week, send a second new product offer, rest for another week, and then send a sale announcement email.

“If you do sale messaging too often, it doesn’t feel like a big deal and doesn’t feel special,” Cross explains. “If you announce a sale every six to eight weeks, it’s more compelling.”

-> Cross-promotions do not work for entertainment offers

Cross has learned that movie customers are very loyal. They do not respond well to cross selling or emails touting merchandise from other movies. The emails sent to individuals are based on purchasing history. “There aren’t a lot of Austin Powers customers buying Lord of the Rings merchandise,” Cross says.

Which is too bad. “Right now, Austin Powers is not top of mind and sales are going down dramatically.” The more time that has passed since the movie was in the theaters, the less useful the email list becomes, unless there is a sequel.

-> Garnering names through sweeps

While the majority of New Line's email lists are past online customers, Cross uses about four sweeps campaigns a year to garner additional names.

“In January we participated in a Lord of The Rings Sweepstakes where we were giving away an $800 One Ring replica.” (If you are a fan, you know what this is.) The offer was advertised through New Line sites, affiliate sites, and email.

“We had 10,000 entries over the three-week sweepstakes period,” Cross says. Of those 10,000, about half checked the box to receive future emails. These names were tagged with a special code in New Line's database so Cross can track future campaign results to determine the value of that source compared to others.

She is also messaging them differently than previous buyer names. “For these registrants, we know they're interested in Lord of the Rings so future email will be Lord of the Rings related,” Cross says. “But they haven’t yet purchased on our site, so we'll develop an email message that will entice them to make a first purchase.”

-> Metrics on New Line's most successful email campaign

Campaigns that combine new products and customer involvement work the best.

“We’ll get customers to vote on products that we’ll produce and sell,” Cross says. For example, New Line emailed their list a variety of layouts for a new Lord of the Rings poster, and asked “Which do you want us to produce?”

After the votes were talied, New Line sent a follow-up campaign: “You wanted it. Here it is. It’s available now.”

- The open rate for the follow-up campaign was 53% higher than average.
- The click through rate was 75% higher.
- The conversion rate was 133% higher.

That is a clever idea that we think other marketers should test copying in their own niches.