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Join Our Research Team at DMA 2014
Aug 06, 2013
Case Study

Email Marketing Segmentation: Clothing brand uses social behavioral data to drive a 141% increase in revenue

SUMMARY: Retailer Johnny Cupcakes was a brand without email segmentation. Mass weekly email sends were the go-to, a result of limited and incomplete data on its email list of 80,000.

By embracing social data collected on its subscribers, Johnny Cupcakes was able to put together a segmented campaign for the product launch of its new baseball T-shirts. See how simply segmenting to male and female customers enabled the company to increase conversions by 123%.
by Courtney Eckerle, Reporter

"We consider ourselves an experience brand. We try to offer a unique experience out of buying T-shirts … and we try to put a smile on everyone's face basically," Justin Hiltz, Media Futurist, Johnny Cupcakes, said.

Johnny Cupcakes is a mid-size apparel retailer formed in 2000 by John Earle, aka "Johnny Cupcakes," selling T-shirts, sweaters, hats and accessories. But, as a global e-commerce presence, as well as having multiple retail locations in the United States and Europe, it still knew very little about its customers.

Despite a unique product experience, the email program was generic and stagnant. Before this campaign, Johnny Cupcakes "just kind of threw things at the wall" when it came to its email campaigns, Hiltz said.

CHALLENGE

"We did things with no rhyme or reason; just sent everything to everybody on our list and called it a day," Hiltz said, adding he wasn't "tapping into any of the features that were available to us."

Limited data on their customers prevented the team from doing any segmentation at all to their email list, currently hovering around 82,000 names. With only one or two exceptions, Hiltz was sending the weekly email blasts out to the entire list.

This issue especially affected product launches, he said, because Johnny Cupcakes was unable to pinpoint and segment the customers a new product would most appeal to. Basic CRM data, such as gender, was either missing or incorrect in its system.

Beyond personal data, Johnny Cupcakes wasn't doing much with the feedback it was given by its subscribers through open rates or clickthrough metrics.

"We were kind of just going off of our gut as far as who we thought our customers were and what they'd want from us," Hiltz said.

CAMPAIGN

"We'd been steering things along so blindly," Hiltz said about when they made the decision to bring more personalization and data into Johnny Cupcakes' email program.

Johnny Cupcakes partnered with a vendor to fill in the gaps in its customer knowledge, in order to help take full advantage of its segmenting capabilities and providing its customers with the most relevant offer possible.

After going through and specifically mining their customer's social media accounts, Hiltz and his team were able to determine several facts enabling them to move forward confidently with their new product launch.

Doing a significant segmentation for the first time in their company history, this past April, Johnny Cupcakes split its list into male and female subscribers who had indicated an interest in baseball.

It sent out a product launch email of its new baseball-themed shirt with a creative featuring a male model to male subscribers, and female model to female subscribers.

Step #1. Mine customers' social media for data

Hiltz worked with a vendor on linking the Johnny Cupcakes customer database to the public expressions of its individual customers, which meant analyzing 19 million public social expressions. The team was able to gain insights based on posts about:
  • Gender

  • Customer interests

  • Brand preferences

  • Media habits

Deriving gender was a specific necessity for this campaign, and was taken directly off of the customer’s profile if publicly shared.

Hiltz previously had very little data indicating the sex of Johnny Cupcakes subscribers, since gender is not currently a field in its email opt-in form. The information the team had was mostly from purchase history, and was incomplete or incorrect.

After filling in gender information gathered from users' social media profiles, three sections were created:
  • Male

  • Female

  • Unknown

Another dimension was interests — the team was able to identify hobbies and lifestyle indicators, and from there, discovered "we have a lot of fans that like sports," specifically baseball.

It was decided Johnny Cupcakes would test, and try to see results from pushing a baseball-themed shirt out to those specific customers.

Hiltz segmented a list comprised of the people who had expressed significant interest in baseball on their social media sites — either by following a baseball-related account, posting that they were attending a game or talking about a specific team.

Step #2. Apply learnings from social media data

"It was so far beyond even what we could have expected. We [had] painted this picture of our customers … we were just so wrong about based on our intuition," Hiltz said.

He added while the team was correct about some things, they made some substantial discoveries that affected their entire view of Johnny Cupcakes customers.

One of the things the team was able to discover was their miscalculation in the number of customers they considered "die-hard."

"We always catered to them, and gave them more weight than they really deserved as far as the way we planned products … to find out they're just a tiny sliver of our customer base. It was unbelievable to us, almost like a wake-up call," he said.

Now, Hiltz said they can "start actually making things for the general public as opposed to catering to this small, small section of customers."

Another thing that surprised him was "how much our customers were talking about, or into alcohol."

The link had never really occurred to them because "[Founder Johnny Earle] has always been an alcohol and drug-free guy … there's a lot of little things like that where … you just would have never known."

This information became useful, and was further proved recently when one of their employees pitched a "Jack Daniels parody shirt, and it did well," he said.

Role gender plays for customers

From a raw gender point of view, it was discovered Johnny Cupcakes customers are fairly evenly split between men and women. Historically however, 75% of male products were purchased.

A theory of the team at Johnny Cupcakes was most of the women were actually buying men's products as presents.

So, the idea became women were not as aware of the female clothing line, especially since previous email sends mainly featured male models.

Since women's styles have a different fit and style to them, the idea arose showing a woman modeling the product to female subscribers would boost awareness of the women's Johnny Cupcake clothing line.

Step #3. Segment and send to email subscribers

The first segment of this campaign was into those customers who had expressed an interest in baseball on social media, and were most likely to respond to the Johnny Cupcakes baseball-themed shirt.

The second was breaking that segmentation into male and female subscribers. Male subscribers were sent a creative of a side-profile male modeling the T-shirt, and women were sent a creative of a female modeling the shirt straight-on , playing up the different cut of the shirt for women.

The roughly 10% of names they couldn't accurately assign a gender to were sent a default of the male creative, which is "what Johnny Cupcakes would have done ordinarily anyways," Hiltz said.

Hiltz and his team decided on simplicity, and implemented only one change — model gender — so they would also be able to properly attribute any results from the campaign. Also, in case gender information was incorrect, they still wanted the subscriber to have a "reasonable experience" and not be aware of the mistake.

The product launch email had the same subject line for each, "Freshly Baked Originals Have Arrived," and had the same copy, pushing subscribers onto the product landing page.

Hiltz added people who were segmented in this campaign were converting better overall on products, not just into the baseball T-shirt they were shown in the email.

"Everything we did or saw happen [from this campaign] just opened our eyes … I'm still using the female group that we created on some of our campaigns … to help cater to people a little better," he said.



RESULTS

"It's crazy that we weren't doing anything like this [before] … it's just mind-blowingly interesting to see results like this," Hiltz said.

He added even doing this simple segmentation showed, "How was this not happening before? We've only done the surface stuff so far, and it's proven so many things."

The results Johnny Cupcakes was able to receive from the baseball T-shirt product launch emails were:
  • 42% increase in clickthrough rates

  • 123% increase in conversion rate

  • 141% increase in revenue per campaign

"Getting the results back that … showing [customers] something they like actually makes them buy. What a novel idea," Hiltz joked.

This campaign has influenced Johnny Cupcakes' overall goals, Hiltz said, and now "our first goal is to engage our current customers and convert them from possible one-time customers into lifers."

Johnny Cupcakes doesn't want to focus on bringing in new customers until it figures out how to consistently reach and convert the customers it has, Hiltz said.

"Once we learn how to do that really well, we can then move into acquiring new customers and getting into using our data for reaching outside of our pool of customers," he concluded.

Creative Samples

  1. Male creative send

  2. Female creative send

Sources

Johnny Cupcakes

TrueLens — Johnny Cupcakes' social behavior vendor

Related Resources

Email Summit 2014 in Las Vegas Call for Speakers — Bonus: Enter Email Awards 2014 with the same form

Email Marketing: Reactivation campaign for performing arts center sees 738% ROI

Email Marketing: Two ways to add relevance, and why you must be correct (via MarketingExperiments)

Ad Retargeting: How Corel Software increased revenue 106% with hyper-retargeting

Email Marketing: Segmentation, integration, automation and personal interaction

Email Marketing: 142% higher open rate, 15% bigger list from retailer's strategy

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


See Also:

Comments about this Case Study

Aug 06, 2013 - Nancy Arter of Outward Media says:
Great case study on the importance of using consumer-specific data and an analytical approach to reap rewards in terms of email marketing campaign success. It works- this proves it again! Intelligent and analytical approach nets some winning results!



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