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Nov 18, 2014
Case Study

Email Marketing: Microsoft Store uses relevance to increase sends by 300% and email revenue by 600%

SUMMARY: With a legacy of separate and multiple systems used to collect limited data, it was difficult for the team at Microsoft Store to understand customers across both online and brick-and-mortar stores.

Instead of waiting for a long-term dynamic data infrastructure, the team worked within their current confines to learn more about their consumers and make the most out of the limited data to increase email revenue by 600%.
Out of 500 speaking submissions and email case studies, the judging panel for MarketingSherpa Email Awards 2015 selected two Best in Shows and five finalists for the MarketingSherpa Award — Reader’s Choice Email Campaign that will meet the standard set by this campaign.

This campaign exemplified the five key standards for this year’s judging process: transferable principles, strong results, customer-centricity, transformation and innovation.

by Courtney Eckerle, Manager of Editorial Content

THE CUSTOMER

"We know that if you come buy a product at the Microsoft Store, you've got these experts … We're going to walk you through opening up your new product and make sure that you walk out of the store knowing how to use it," Shawna Dahlin, Senior Email Marketing Manager, Microsoft, said.

The constant question, she added, is how to replicate that same "white glove" customer experience through email communications.

"How do we take them through this experience of shopping with the store in a way that increases customer satisfaction, and how can email help do that? It's not only promotional and, 'How do we sell them more?' It's also how do we get them to be a loyal customer by making the experience with Microsoft something that blows them away," she said.

The database of customers that Dahlin works with is anybody who has purchased in-store, purchased on the Microsoft website or has signed up to receive marketing communications through other venues.

She explained that this covers all emails that go out to customers, including transactional email receipts, shipping confirmations, as well as day-to-day promotional emails and lifecycle targeted emails.

Across all of these sends, the goal is always to provide customers with that white glove experience through email, especially while bringing together the online and brick-and-mortar experiences.

CHALLENGE

The way that the brand evolved, Microsoft never sold any product directly to consumers, except for Office. A first version of Microsoft Store was online and eventually selling Office expanded into selling more products. Then five years ago, the brick-and-mortar stores were established.

"Similar to other retailers, we have different systems that don't talk to each other," she said, adding that being somewhat of a startup within Microsoft can be scrappy and exciting, but challenging in some areas.

"All of a sudden, we became all one team. Now we have data everywhere. So, we have two completely different systems. We can't integrate them. We can't even crossover and see who's in both. We had essentially two different programs," she said.

Email communications were separated, and the team "talked to people who purchased in-store in one communication and people who purchased online in another without really any thought behind it."

Dahlin said the team knew that logically, they shouldn't be spraying email out to the list without any thought or care behind it.

"How do you do that? You do it with data. So, when I started digging into our data, [and] it wasn't in a state that allowed thoughtful email communication," she said, adding that, "we were potentially sending Xbox 'Call of Duty' emails to the mom who just bought her first Windows Phone."

There are a variety of different types of customers who shop with Microsoft, she added, across a lot of different products, and it's difficult to know what they care about.

"As a big company, you would think that we have everything all in one place where we can act on it. But we unfortunately don't ... I'm sure there are lots of people that have that same issue," she said, adding that when your data isn't integrated with your email platform, "all the fancy stuff that might get pitched to you from an email service provider, it's not easily done."

The goal immediately became to increase relevance throughout the email program, and through that, increase revenue and engagement as well. The initial steps were deciding what segments the team had available from present data and utilizing content that would resonate with customers based on what they purchased.

"With any big company you've got technology teams that can help you bring stuff together," Dahlin said. However, the other side of that advantage is that those teams often have to triage requests from other departments.

"They always have prioritization discussions around, do they prioritize getting my customer email data together or do they prioritize making systems in the store better?" she said.

Dahlin went through an extended period of waiting for an integrated database that kept getting pushed down in favor of more urgent issues.

"Finally, I needed to do something. Our email program … It was growing and it was doing well and we did some things with content, but really we knew where the big win was going to be was [relevance] … So, it came to the point where we said, 'All right, we're not going to wait on the technology stuff anymore. We're going to figure out what we can do to take the program to the next level without the formal integrated database that we really want,'" she said.

CAMPAIGN

Dahlin and her team forged ahead before completing the long-term data infrastructure, utilizing the limited resources at their disposal to bring together the fragmented database.

To further understand and be relevant to customers, they began increasing email volume and segmenting their list based off of behavioral data.

Step #1. Form a content strategy around pain points

"We looked at a content strategy. What is the content that we want to talk about to our customers?" said Dahlin, adding, "We need content first."

The team began working with different groups within marketing, and then across the company, to cull all of the content available to them.

Before thinking about what the different segments would be, she said, the first question was, "what do we want to talk to them about?"

The first goal was using content to figure out positioning, she said.

"For example, [with] Office, do we have different positioning for a business versus a student? Hardware like a Surface or a PC, do we have ways on our site that we're talking to them differently? It doesn't do us any good to send an email communication that talks about why you should, as a student, use this and then we land them somewhere that doesn't pay off," she said.

From this audit, the team came up with a lot of content that surfaced after reaching out to the Microsoft help desk.

"We talked to the customer service reps about, 'Okay, when somebody buys Office, what do they ask you about? What are their biggest pain points?' We found out that they can't find their digital code. They don't know who to call. They don't know that there's this free service called Up and Running where we will stay on the phone with you until you get your Office installed," she said.

Customers don't realize all the aspects of the product and services that are going to "make their experience great," Dahlin said, and emails — particularly receipt or post-purchase emails — are a prime way to solve that.

Step #2. Don't over-segment customers

"We went to segmenting the data, which is the sort of mind-numbing part of this — what data do we have?" Dahlin said, adding that there was a lot of data the team assumed they would have, but found wasn't there.

"The key data was transaction data. We know what they purchased. We know when they purchased it. We know what channel they purchased from. So, we started just digging into that and looking at, 'Where are our big groups of people that were big enough to focus on?'" she said.

The team started doing some mild segmentation, deciding that they were going to take an initial set of people and call them 'Gamers,' because they had made an Xbox-related purchase.

The team had to be careful about how many of these data points they focused on because "you can end up with too many segments, and it's a super-manual process," she said.

"We found that because we didn't have all that much data on our customers, the segments would get too small. If you were only basing it on a few products in each segment, we sell so much stuff that it just became too segmented, and you end up only sending to such a small percentage of your base," she said.

That kind of overzealous segmenting, she added, isn't going to see a return and is taxing to a team, especially on their manual system.

"We ended up not being able to necessarily segment our promotional emails at that time the way that we would have liked to, except on a one-off basis," she said.

They began segmenting more "along the lines of if you bought a Surface and then two months later we released the "docking station for the Surface. We would take little wins like that and say, 'Hey, we're going to pull a list of everybody who bought Surface and try to sell them this docking station,'" she said.

View the Creative Sample


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According to Dahlin, "we weren't able to completely segment our entire promotional email program, but we were able to do these smaller things."

With that kind of specific segmenting, Dahlin said she looked back over the results and realized, "those weren't as targeted as the post-purchase lifecycle, and then we did a pre-order lifecycle for Xbox One, which I think was one of our biggest wins as far as showing how targeted content works."

One campaign focused on a group of customers who had pre-ordered the Xbox One, who had roughly three months before they were going to receive their purchase.

View the Creative Sample


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"So we have this group of people that clearly are fans because they're pre-ordering a new device that's not a cheap device … basically, how do we reinforce their purchase?" she said.

The team didn't approach the send with driving revenue in mind, "but it was taking them through all the reasons why they made the right choice. So, we did this series of nine emails where we talked them through the features and the speeds and feeds and a few cross-sell things. You could pre-order games, so we kind of slid that in there," she said.

What the team did find was "surprisingly high engagement. Actually, the revenue per email was amazingly high. Some of them were buying Xbox One stuff, but some of them … they were going and they were engaging with our site. They were engaging with the content that we had," she said.

Through engaging with the sends in a way that they typically wouldn't have in a former broad blast email, Dahlin said, it validated nurturing a set of customers who had shown loyalty by pre-ordering.

Step #3. Implement cross channel integration

In spite of the data gap, one of the pieces of information the team did have was where customers had purchased, online or in-store.

"One of the important things was the cross-channel. Our brick-and-mortar stores are new, so how do we get more people in there? That's really where our white glove experience is happening … so, how do we drive that cross-channel?" Dahlin said.

The new question became how to talk to people in a meaningful way about the channel they shopped.

"If you shop in store, we're only going to tell you to shop in store again. And if you shopped online, we're just going to tell you to shop online," she said.

Previously, the team had been doing separate calls-to-action for each purchase path, but from the available data, the team could share information with online purchasers, for example, that they were near a store.

"Let's tell them about it. Or as we're opening new stores, let's tell them about it … letting our customers decide where they want to shop. So, we added a dual call-to-action to every email. Let's have you find a store or shop online. You choose," she said.

The team implemented a header in every email that informs customers if they live near a store.

View the Creative Sample


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"It's not exact. We do our best with the data we have to tell them their closest store," she said, adding that, "it's helping drive that awareness across our channels of online and brick-and-mortar that you can shop anywhere, and we're going to help you regardless."

The integration of that information was not an easy task for the team, even though it was only a small piece of data.

"We took that little piece of information about our customer. That seems like it should be so easy to do. It wasn't. But I think it was a big win for us to be able to be, in that little way, talking to them in a more meaningful way about what they care about," she said.

A marketer's perspective should be the customer's perspective

With this campaign, the team started talking to people as "just our customer, rather than a brick-and-mortar customer or an online customer. Internally, that was a challenge because teams are separate. Teams want to do certain things. 'No, that's my customer,' or, 'No, that's my customer,'" she said.

Since Dahlin was managing across both teams, "my perspective to look at it from a customer's perspective, they don't care about the way we're split up or where they purchase. They just know Microsoft or Microsoft Store, and they want a good experience," she said.

Step #4. Refine internal process

Increasing email volume has "all sorts of challenges," Dahlin said, adding that not the least of which is higher visibility because "a lot more people in the company and executives start getting on your email list, and care about what you're talking to people about. So, it's difficult. A lot more people want to look at your emails before you send them."

At the time of this transformation, the segmentation process was very manual, Dahlin said. This, alongside the review process, made the need for an internal process all the more evident.

"We were literally pulling a list every week and loading it in and manually sending. It was brutal. It was pretty high-level segmentation," she said.

While the team continued to discover that customers were more responsive the more relevant the email sends became, more intelligent segments were created. "But it was hard because it's not really sustainable to do that for every single thing. You can't have a team pulling lists every day or every week for 12 categories and 12 versions of each email," she said.

However, while the team had to hold back some due to this limitation, "we proved out that this works, and this is where we should be," Dahlin said, adding that they knew that when their big database overhaul was completed, they would be able to automate what they had already proven worked.

Part of the process changes were driven around finding more content and digging further into data.

"Some of it was just logistically, 'How are our lists being pulled? Are they being pulled correctly?'" she said.

This manual process required a lot "deeper leg work that had to be done during all of this to increase the volume," she said.



RESULTS

One of Dahlin's biggest lessons, as she speaks to colleagues who perform her role across different companies, is that "everybody's issue is data."

"I want to have this completely blown out, segmented, dynamic email program where basically everybody's email is customized to them based on everything they've ever done with us. That is not feasible," Dahlin said.

In this effort, the team made progress in their program by "taking every little piece of data that you can and thinking about, 'How would I talk to a customer in a more meaningful way based on this?'" she said.

Using whatever data you have at your disposal, however small, and using it for relevancy will achieve "little wins" that add up, she said.

In the first part of next year, the team will be launching a more dynamic, segmented program that has been worked on over the past year and refined through the struggle of simply getting started.

"Just getting those little wins without having to wait for the big reveal, open the curtains on this big, great dynamic program — I think with that we've been able to learn about what people respond to, what they don't," she said.

The results the Microsoft Store were able to achieve versus promotional sends were:
  • An open rate lift of 150 to 400%

  • A clickthrough rate lift of 400 to 2200%

  • Increased email send volume by 300%

  • Increase email revenue by 600%

"We have engaged with our customers in a more meaningful way, which I think makes them more loyal. We learned a lot that's going to help guide us into what we're now going to execute on for the future," she said.

Microsoft Store will be speaking on this campaign at MarketingSherpa Email Summit 2015, held February 23-26 in Las Vegas.

This case study has also been selected as one of five finalists for the MarketingSherpa Award — Reader's Choice Email Campaign.

Keep reading MarketingSherpa newsletters to see case studies from other finalists, and then in a few weeks, we'll ask you to vote for your favorite on the MarketingSherpa blog.

Creative Samples

  1. Surface accessories send

  2. Xbox One pre-order

  3. Store address header

Sources

Microsoft

Drumroll

Related Resources

Email Marketing: Segmentation, triggered sends generate twice the revenue with half as many email sends for furniture company

Email Marketing: 3 award-winning lessons about relevance

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

B2B Email Marketing: How a global information company transformed from batch-and-blast to persona-driven email marketing [Full video session from Email Summit 2014]

Email Marketing: Regional insurance provider uses segmentation to raise brand awareness and fight national competition




See Also:

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