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Mar 04, 2014
Case Study

B2B Email Marketing: Behavior-based closeout campaign produces 808% ROI

SUMMARY: When one season segues into the next, change ensues. Temperatures transform and a new set of colors, trends and fashions come out to play. Because of this, companies that market seasonal products must adapt inventories, swapping out the old for the new. This creates a dire need for these companies to move excess inventory in an economical way.

Today's B2B case study zeroes in on how MarketingSherpa Email Award winner Creative Co-Op rose above this challenge by implementing a personalized email campaign to produce an 808% ROI in merely one month.
by Allison Banko, Reporter

CHALLENGE

Creative Co-Op prides itself in being a design and trend leader in the gift and home décor sphere. Marketing its in-vogue product line to a core audience of independent retailers, this wholesale company has built its principles on providing "the everyday business who's out there on Main Street, USA" with trendy products at a value, according to Eric Reynolds, Marketing Manager, Creative Co-Op.

However, reigning as a trendsetter can present a pain point: You must continually introduce fresh products.

"In order to do that, you have to cycle some of your previous product out or it can lead to inventory issues," Reynolds explained.

Creative Co-Op has approached this challenge via a small-scale catalog to advertise its extra inventory. It's released twice a year, which corresponds with the company's product cycles: winter and summer.

However, for an upcoming campaign, the team sought to add a more contemporary strategy to moving that inventory.

"We've obviously seen upticks in the way people are utilizing tablets, smartphones [and] computers," Reynolds said. "In advertising, you can go in and track so many things electronically versus print."

The team reflected on their previous successes with electronic efforts and email campaigns, realizing they could apply similar tactics to help combat the movement of its closeout items.

"We knew there had to be a way that we could utilize that technology to help out with this type of issue," Reynolds said.

That technology? Behavioral-based marketing automation.

CAMPAIGN

As product cycles were ready to shift, Creative Co-Op sought to solve its excess inventory with an automated email campaign tailored to past purchasers of the products now on closeout.

To personalize the effort to its audience of independent retailers, the email would highlight a particular closeout item to not only remind the recipient they had purchased the item before, but also offer it at a discounted price as an incentive for a repeat purchase.

Step #1. Determine which products need to be moved

When Creative Co-Op formulates its small-scale catalog of closeout products twice a year, the team examines its existing inventory. They look at how many new products they are interested in bringing to the market versus how many products they must move.

"If we know we're going to be introducing approximately 500 items in the summer, then we know there are roughly 500 items that we need to key in on to move to keep everything relatively even," Reynolds said.

The team utilized the findings from this process for this particular email effort as well. The types of inventory that the team moves includes items that are:
  • Not performing well

  • Trendy and are perhaps going out of style

  • Longstanding items in a product line that are being replaced with a more current variation

However, because this was an electronic effort, the team had to also ensure that the items at hand were live and in stock on the Creative Co-Op website.

Step #2. Comb through past purchase history to identify the target audience

After determining which products to market in the closeout campaign, the next step was to dig through data to uncover the personalization piece of the effort. This began "behind the curtain" of the website.

Creative Co-Op's agency set up relational tables that scanned through customer data, matching past purchase history to products that were now on closeout. By using behavior-based automation tools, the team was able to identify which customers had purchased such items within the past year.

The audience for the email effort was deemed to be active customers who had ordered at least one of the closeout products within the last 90 to 365 days.

Step #3. Perform email send

Creative Co-Op's closeout campaign email contained:
  • Images of the closeout product the recipient had purchased in the past

  • The original product price

  • The closeout sale price

The closeout sale prices were marketed in the emails as "Value Buys," offering the product the consumer had previously purchased at a fraction of the price. A second variation of the email was sent 10 days after the first if the consumer had not yet taken action.



RESULTS

Creative Co-Op's closeout campaign proved to be prosperous for the company, yielding an 808% ROI in its first month along with a 42% increase in order conversion rate and a 255% increase in closeout items sold online.

While the idea behind the effort spurred from the team's desire to piggyback on their previous successes, it wasn't simply the email piece that produced triumphs.

Reynolds explained that during the team’s brainstorming, the findings of the personalization aspect were what stood out.

"It lent credence to [the fact] that we were definitely on the right track in that electronic medium, and personalization was a key piece to helping us attack this issue that probably most vendors in the industry have," Reynolds said.

After the campaign, the team also tallied that 84% of the items sold were actually non-closeout products, backing consumer behavior Reynolds said Creative Co-Op had experienced before.

He referred to past email blasts promoting specials — for example, a three-day cyber sale.

The team noticed that although the sale only encompassed 30 to 40 products, customers were also buying non-sale products because Creative Co-Op website contains thousands of items. A promotional email simply reminds the customer to go to the site and buy product in general — even if it may not be on sale.

Staying true to your customers

Wholesale companies' excess or distressed inventory can become synonymous with the stock rooms of oh-too-familiar discount retailers that specialize in such closeout products. While customers may appreciate the deals, it can be a brand blunder for companies — Creative Co-Op included.

Creative Co-Op values its position as a trend leader in its industry, so having its products on shelves that offered for pennies on the dollar can be damaging to the brand. Due to this, it was key for Creative Co-Op to offer wholesale discounts to its existing customer base of independent retailers instead of those discount retailers.

"It's a fine line of making sure that you're taking care of the customers that you built your business upon," Reynolds said.

Creative Samples

  1. Initial email

  2. Follow-up email

Sources

Creative Co-Op

Whereoware

Related Resources

MarketingSherpa Email Awards 2014, presented by ExactTarget — Download a complimentary PDF of all the award-winning case studies

Marketing Research Charts: What types of triggered emails do B2C, B2B and B2G companies send?

Customer Relevance: 3 golden rules for cookie-based Web segmentation

B2B Email Marketing: How a publishing company used marketing automation to increase CTR 1,112%


See Also:

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