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Jan 31, 2012
Case Study

List Growth: Blockbuster Express’ Hollywood-inspired intrigue increases audience by more than 300%

SUMMARY: Even the world's best email copy doesn't engage audiences the way a Hollywood thriller does. But, if you can borrow a tactic that makes movie magic, think how compelling your email can become.

This case study reviews how Blockbuster Express expanded its email marketing approach by reflecting the intrigue and excitement of the movies it vends. Learn how parent company, NCR, grew an already large email audience by more than 300% and increased same store (kiosk) revenues.
by Jeri Dube, Freelance Reporter, MarketingSherpa

CHALLENGE

When Blockbuster Inc. and NCR, through a strategic alliance, launched the first Blockbuster Express (BBX) kiosk in 2008, the 125-year-old self-service technology company, originally famous for cash registers, entered the entertainment business.

"NCR’s Blockbuster Express is all about entertaining the consumer," said Sundeep Kapur, Online Marketing Strategist, NCR. "We try to connect with the consumer -- paying attention to what they want, giving them an array of choices, and providing spectacular service."

The company has deployed nearly 10,000 movie rental kiosks throughout the United States. The machines are bright, shiny and hard to miss. If the colors aren’t enough to attract attention, then the movie trailers running on the screens should lure potential customers.

Kapur said, "You see people just stopping because they are intrigued by this device playing this movie."

While Kapur is clearly proud of the allure of the NCR machines, they presented an email marketing challenge: how to make the email program as exciting and compelling.

"Our email engagement program has to match up to our brand offering," said Kapur. "The message copy and creative has to stand out."

CAMPAIGN

Initially, BBX attempted to attract an audience to its email program by explaining its benefits on the website. When those results proved disappointing, Kapur decided to borrow from the Hollywood playbook to make BBX email more compelling.

He also leveraged the strengths at the point of sale. Instead of human sales associates who can use charm and persuasion to get customers to divulge their email addresses, BBX had machines with real-time access to customer and movie information. So Kapur used the breadth and depth of that ability to captivate customers in an experience worthy of an entertainment brand.

Read how BBX added Hollywood-inspired intrigue to email marketing fundamentals to grow and engage its email audience, and increase same-store sales.

Step #1. Offer value in exchange for an email address

Fundamentally, acquiring a customer’s email address is a trade. It’s a rare individual who will simply offer that information without getting something in return. From this perspective, the need to present a value proposition becomes obvious.

And for BBX, given the distractions at the point of sale and the limited screen real estate, it had to be presented efficiently.

"We had to make our value prop really clear in less than two lines," said Kapur.

He organized his approaches to creating a fair value exchange into three categories:

Transactional

In pursuit of a larger email list, BBX started with a simple transaction, offering to send a digital receipt to the customer’s inbox. This simple technique resulted in a 50% conversion rate. Also, by delivering on this straightforward promise, BBX immediately starts to build trust with the renter.

Over time, BBX added another transactional engagement tactic. BBX allows customers who don’t find a particular movie in the kiosk to either text or email the title of that movie.

In this two-step transaction, BBX first sends confirmation of the request. Then, once the movie is available, renters receive either an email or SMS notification.

Informational

In this category, customers learn something they want to know in exchange for their email address. BBX creates the need to know during the customer interaction at the kiosk. Based on choices the customer made, or not making a choice at all, the machine serves up trivia questions.

For example, when someone continues to scroll through the available titles without deciding, the machine asks three questions representing different film genres. The customer may choose to answer any or all of them.

The machine does not reveal the answers; they’re sent via email. Therefore, customers must supply their address to find out if they answered correctly. This is a technique Kapur uses to create intrigue and leave people wondering, and even anticipating, the BBX email.

In addition, these trivia questions help narrow customers’ focus, which makes it more likely they will rent rather than walk away.

Marketing

BBX also uses purchase incentives to lure people to its list. By supplying their email address, they will receive coupons for special offers. The coupon might be for an extra rental day, three movies for the price of two, or a special offered by the grocer where the kiosk is located.

Sometimes BBX combines marketing and informational value. Customers must correctly answer the trivia question to receive the coupon.

Kapur said, "It is not just an offer anymore. It is something that intrigues you, so you want to know the answer."

Intrigue is giving the consumer something to think about once they have walked away from the machine. And it’s as important to maintaining an email relationship as it is to starting it.

Step #2. Segment your list to make intrigue relevant

Once BBX captures an email address, its segmentation scheme is key to keeping that audience member engaged. Kapur uses multiple strategies, striving to reach the ultimate of one-to-one personalization. He uses three approaches to learn about each customer:

Observed behavior

The rental history is an excellent source of segmentation data. BBX tracks frequency of rentals, location and movie preferences including genre, stars and directors.

BBX also tracks what devices are used to read the email. The granularity of this segment goes beyond mobile or desktop, but includes type of smartphone. And, BBX designs all emails to be mobile friendly.

Information given by the customer

Kapur is also specific about how he asks for information. He does not ask customers what genre of films they like, but rather, seeks feedback on the specific movies they’ve seen. This specificity increases engagement through the illusion of customer recognition.

Inferred preferences

BBX uses preference and rental history to infer additional preferences about customers. An obvious example is offering a customer, who has rented a Tom Hanks movie, another movie featuring Hanks.

Inferences can also be more complicated where preferences for one genre imply interest in a related one. For example, people who enjoy sports movies also prefer action flicks.

"This is where control groups come into play," said Kapur, who tests these correlations to ensure their validity.

Step #3. Make the subject line intriguing

Once BBX segments the email audience so they receive relevant content, the company uses intrigue again to get people to open the email. Intrigue starts with the subject line.

Examples of intriguing subject lines BBX has used are:
  • Who has won 26 Oscar statues?

  • Who directed In the Land of Milk and Honey?

  • How do Smurfs travel long distances?

Continually coming up with creative content to meet Hollywood standards requires inspiration. Kapur finds inspiration in his Chinese fortune cookie collection, which he keeps at work.

When it’s time to work on subject lines, he pulls out a few. He finds them funny, and they spark his creativity. And he always writes more than one option so he can test them.

BBX runs what they jokingly refer to as the Tuesday/Thursday test. On Tuesday, the campaign was sent to a few people to test the subject lines. By Thursday, Kapur had the approval from his management chain based on the test results.

It no longer takes BBX two days to figure out which subject line to use based on the testing. Where they used to tweak the subject line, based on the test results, now Kapur’s management team trusts the results of the test straight out, the option that receives the most votes is the one they use.

In the past, Kapur has tested "Did you like the movie?" vs. "How was 'xxHeroxx' in 'xxMoviexx'?" Over time, he has seen that specificity is more effective.

Tactic #4: Early in the customer relationship, let “season and reason” inspire content

Kapur categorizes BBX content as season, reason and lifetime. Before BBX has gathered enough information to see any trends in its customers’ lifetime buying habits or movie preferences, BBX sends only season and reason emails.

Seasonal content is based on time of year and historical market activity. For example, during the holidays, emails promote older movies such as "Home Alone" and "Planes, Trains and Automobiles," which are popular choices during that time of year.

For the holiday season, BBX sends coupons for current movies as well. And offers such as “Rent 2 and get a 3rd Movie on Us!” promote renting more than one movie at a time.

Emails sent for a specific reason are essentially triggered emails. If a customer goes several months without renting, this may prompt an email with information about the latest releases or a coupon to lure the customer back.

Tactic #5. Leverage deep customer knowledge built throughout the relationship’s lifetime

With its sophisticated segmentation informed by a machine recording every move at the point of sale, BBX has the opportunity to develop rich customer profiles. This foundation lets BBX conceive unexpected offers aimed at keeping customers intrigued and engaged.

For example, for the segment for customers who regularly choose sports or action movies, Kapur inferred this group would not rent movies for Super Bowl weekend. Instead of an extra day’s rental or a three-for-two deal, Kapur partnered with grocery chains to offer a party platter. This insight led to 2.5 times the normal coupon redemption rate.

In addition to getting a good response to the specific offer, the goal of these “lifetime” emails is to build trust in BBX’s judgment so that customers readily respond to featured offers and recommended rentals.



RESULTS

From the time when Kapur was assigned the task about two years ago, the email list has grown by more than 300%.

This growth was not a matter of starting small. The number of addresses on the original list was already significant, which is why when speaking about his initial results, Kapur said, "When we first achieved 10% growth, we were thrilled."

Now, BBX captures between 30,000 and 75,000 new addresses every week.

The segmentation and content work has also proved effective. Some of the highest performing list segments experience 70% open rates.

The email marketing program has also contributed to revenue growth. During the third quarter earnings call, NCR announced a 21% increase in same-store (kiosk) sales year over year. That growth is even more noteworthy, since during that period, BBX grew the number of kiosks nationwide by 30%.

Useful links related to this article

Creative Samples:
  1. Picture of a BBX kiosk

  2. Emailed receipt from kiosk transaction

  3. "Sixth rental is on us" marketing offer

  4. Smurf movie plus rent 2 get a 3rd free promotion

List Growth: Viral Sweepstakes boosts large email list more than 8%

Email Marketing: How to overcome segmentation challenges and deliver targeted content

Email Relevance: 8 tactics for leveraging timing, segmentation and content

Blockbuster Express - BBX website

NCR - Blockbuster Express parent company



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