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May 08, 2012
Case Study

Email Marketing: 208% higher conversion rate for targeted emails over batch-and-blast

SUMMARY: Over time, sending general emails to an entire database can erode results. However, many marketers continue to do this, because they're unsure of how to move beyond "batch and blast" practices to a more targeted approach.

Yet, this change can be easier than you might expect. See how a marketing team from one e-commerce company selected a high-value segment, sent a targeted offer, and saw conversion rates jump by 208%. You will also learn which segment the marketers chose, and how they crafted a strong offer.
by Adam T. Sutton, Senior Reporter

CHALLENGE

The marketing team at Artbeads.com wanted to pursue targeted email marketing. The beads and jewelry-making supply retailer sent marketing emails each week, but they were the same for everyone on its list.

Devin Kimura, CEO at Artbeads.com, wanted to avoid getting addicted to the quick revenue that can come from batch-and-blast.

"When you have to pay those bills, you run a big batch-and-blast promotion with a sitewide coupon that can bring a lot of money in the door. Then you have to replenish that inventory you just sold, so you have to run another discount campaign. Then your customers start to get hooked on the discounts coming… It's a very damaging cycle," Kimura says.

Kimura and his team needed to identify valuable segments, send targeted emails, and increase results -- all on a small budget.

CAMPAIGN

Artbeads.com tested targeted emails in several one-off campaigns last year. The team hoped to prove the value of sending targeted emails, generate revenue, and spur the company to invest further.

Here are the steps taken to launch one of these campaigns:

Step #1. Target a high-value segment

Having studied email marketing for years and written heaps of email case studies, I've noticed that a good way to find a valuable segment is to start with the good ol' RFM model. You can look at your email subscribers across one of these three factors:
  • Recency - how recently has the subscriber made a purchase?

    Example: Subscribers who have purchased in the last 72 hours may be more willing to respond to a targeted email campaign than others.


  • Frequency - how often does the subscriber purchase?

    Example: Subscribers who purchased three or more times in the last six months might be more willing to respond than others.


  • Monetary - how much does the subscriber spend? This factor can also be thought of as "volume."

    Example: Subscribers who spent 50% more than your average lifetime customer value last year might be more willing to respond than others.

This is not the be-all and end-all of email segmentation, but it is a good start. It can also apply to almost any action, such as opens, clicks or downloads (not just purchases).

Target one-time big spenders

For this effort, Artbeads.com looked to the "monetary" factor. The campaign targeted people who had all the following attributes:
  • Current email subscriber

  • Made only one purchase in the last 18 months

  • Purchase amount ranked in the top 25% of all orders placed in that period

This amounted to less than 10% of the team's database but still more than 6,000 subscribers.

"We were thinking that these would be good candidates to reengage to get them to order again," says Cortney Wright, VP, Artbeads.com.

Step #2. Craft email design and copy

Artbeads.com planned to send a one-time promotion to this audience to generate revenue and test the viability of the audience as an email segment. Instead of the generic, vague messaging that is common to batch-and-blast emails, the team worked for a personal connection.

Here are the key features of the email for this campaign:

Personal tone

The email is written as a letter from Kimura, thanking the customer for purchasing. Here's the first line:

"My name is Devin Kimura, and I'm the CEO of Artbeads.com"

The only image in the email is a large picture of Kimura smiling. The copy maintains a personal tone and is about 10 short sentences in length.

Make them feel special

The email's subject line and greeting use the subscriber's first name. Since many consumers have seen this tactic before, the team took extra steps to ensure the readers realized that this email was especially for them.

The email said whom it was for in very specific terms:
  • "I'd like to thank you personally for your purchase on our website. It was among the larger orders placed in the last 18 months!"

  • "But we've noticed that you've only purchased one time!"

Give an exclusive discount

The single call-to-action in the email was embodied in a large button that linked to the homepage. The button included a coupon code and this text:

"Click here to use your exclusive 20% Off"

The email mentions that the recipients are "among the very few select clients" who are receiving the offer. This emphasizes the exclusivity of the offer and contributes to its appeal.

Add urgency to offer

The team sent the email on Dec. 21 and gave the offer a touch of urgency with the following copy:

"The clock is ticking, however! Use this coupon by December 24 to jumpstart your supplies for a new year of creating!"

Step #3. Send and track results

Artbeads.com had completed its largest holiday promotions in November. The team hoped this email, sent on Dec. 21, would spur purchases from some of the high-value customers who did not respond the month prior.



RESULTS

The team was thrilled with the results. The targeted, segmented send achieved the following:
  • Open rate: 20.25%

  • CTR: 4.36%

  • Conversion rate: 0.71% (conversion defined as "purchase")

"Seeing these emails coming in at 0.7% was just wonderful to see," Wright says

That conversion rate is 208% higher than even the high-end of the team's typical batch-and-blast emails, which range from 0.04% to 0.23% for conversions. The email had similar increases in the open and clickthrough rates, Wright says.

"It's very easy to demonstrate ROI on a program like that," Kimura says. "It just opened my eyes to the different possibilities with what we are doing."

Keep the list strong

In theory, the team could have sent this email to its entire list and generated the same amount of total revenue for this one send. That, however, would have encouraged a large number of subscribers to start ignoring the company's emails (or even mark them as spam).

"These types of campaigns appeal to a specific group, and it's important that we maintain the integrity of our list. Marketing the wrong message to our group is going to increase our unsubscribe rate and [hurt] the response to our emails," Kimura says.

Creative Sample

Email

Sources

Artbeads.com

Windsor Circle - helped the team identify the campaign's audience and craft the email

Related Resources

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

Email Marketing: A toxic misunderstanding that could kill your response rates

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

Email Marketing: Global telecom combines email and content strategy to segment database

Email Marketing: Groupon’s segmentation strategies across 115 million subscribers



Comments about this Case Study

Jul 06, 2012 - James Kingett of Norma Foster Limited says:
These case studies are some of the most insightful and valuable pieces of content available to marketers online at present. Thank you so much!



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