October 04, 2011
How To

Email Marketing: Why Newegg's daily-deal alert emails garner a 60% average open rate

SUMMARY: Email is often the channel of choice for sending reminders, updates and recurring offers -- and for good reason. Email is instant. You can send an alert and have your audience on your website in minutes.

See how Newegg uses email and SMS alerts to power a daily deals program that is one of the e-retailer's top promotional outlets. Check out how the alerts and deals are designed to generate maximum buzz.
by Adam T. Sutton, Senior Reporter

Newegg is the second-largest online-only retailer in the United States. The company sells mostly consumer electronics, and its marketers hit a home run with its Shell Shocker promotion. The daily deal program offers steep discounts on a rotating set of five products.

"It's quickly become a top-five promotional vehicle for us as an organization," says Bernard Luthi, VP, Marketing, Newegg. "It's one of the most heavily trafficked pages on our site … And it's one of the most heavily commerced, meaning that many transactions are taking place on that page in comparison to the site overall."

Luthi's team offers email and SMS alerts to help customers avoid missing the deals. Nearly 20% of all the company's email subscribers receive the alerts, which is not an insignificant number for a website with more than 16 million registered users.

Furthermore, the alert subscribers are among the most loyal and active of Newegg's customers, Luthi says.

The email alerts are also the most effective promotional channel for the Shell Shocker deals. Among the devoted audience, the emails typically achieve:

o 60% average open rate
o 6% average CTR

Below, we describe the email and e-commerce tactics Newegg used to turn this program into one of the company's best marketing vehicles.

Tactic #1. Gradually scale-up program

Shell Shocker started about four years ago as a single 24-hour offer for a popular product at a clearance price. The offer's urgency, exclusivity and buzz-worthiness gave the program firm traction.

"We would launch this in the early morning hours, and sometimes by seven o'clock in the morning that product was sold out," Luthi says.

The team gradually offered more Shell Shockers until reaching five deals each day. The deals gradually "unlock" on a schedule and are available for a displayed time period, or until they sell out.

- Overhauled promotion page

All marketing for Shell Shocker points traffic to a dedicated landing page. Previously, this page featured only one of the five deals at a time. Once a new deal was "unlocked," it replaced the day's previous deal. If customers wanted to act on the earlier deal, they had to dig through Newegg's site to find it.

The team has since redesigned the page to show each day's available, sold-out and yet-to-be-unlocked deals. Deals are only removed from the page after midnight, when they are replaced with a new set of offers.

"We really began to incorporate a lot of cross-sell items, similar items and bundle opportunities [on the page], giving people some other alternatives … We've seen well over a 50% increase in page views since we redesigned that page," Luthi says.

Tactic #2. Launch alerts for urgent offers

Newegg's Shell Shocker deals are designed for excitement, and the deals can have remarkably fast sell-out times. Due to this urgency, the team offers an alerts program to customers, and it has become the most effective tool for promoting the deals, Luthi says.

- Email alerts

Customers can sign up to receive daily email alerts that feature the five deals. The emails are delivered when the first deal becomes available at midnight, which makes the message very relevant. The emails include:

o Subject line: Today's Shell Shocker Deal Previews!
o Large banner image
o Product image, name and price for each offer
o Schedule for "unlocking" offers
o 5 Buttons: "See the current Shell Shocker Deal"

"The subject line is quite generic because we are sending it out every day," says Daphne Chen, Senior Manager, Email Marketing, Newegg.

The buttons bring visitors to a dedicated Shell Shocker landing page. The end of the email also includes a call to sign up for SMS alerts.

- SMS/Text message alerts

Newegg also offers SMS alerts, which are delivered daily at midnight, like the emails. Since SMS demands brevity, these messages mention only two of the day's deals. Here's a sample message:

"Shell Shocker 8/3. Now: $24.99 Over-Ear Stereo Headphone.10AM: $9.99 42pc Ratchet Set. More deals @1PM/3PM/6PM. Visit www.newegg.com to buy, text 'SSSTOP' to Stop"

- Save the effort

Shell Shocker can be a daunting program to maintain. The team helps minimize effort by using an email template and an SMS platform that is directly integrated with its email system.

"We just key in those product numbers and product descriptions, and then it is going to populate an automatic email," Chen says. "We are really quite automatic in this part, and we don't spend a lot of labor to do the Shell Shocker daily alert email every day."

Tactic #3. Promote offers through more channels

Luthi's team considers Shell Shocker to be among Newegg's top promotional programs. The team helps spread the word about the program three ways:

- Homepage

Newegg features the day's most current Shell Shocker deal prominently on its homepage, above the fold.

- Affiliates

The company maintains an active affiliate network. The team ensures its affiliates are aware of the Shell Shocker program and the level of discounts it offers.

"It's become a branded vehicle where external groups will pick up on it and use it on their sites," Luthi says.

- Banner ads

Newegg also consistently invests in banner advertising networks. The ads are typically used to support the company's brand, but will feature a Shell Shocker deal perhaps once a month, Luthi says.

Tactic #4. Design the offers for excitement

Shell Shocker deals are so good that Newegg's audience often shares and discusses them online, and Newegg's team works very hard to make those deals happen. This is no small task for a company that sells more than 540,000 products.

"The reason the program has been so successful is that we are very particular about what products we put in those emails. It's a tireless process of deal picking and looking at what's the best deal for our audience and what they are looking for," Luthi says.

The team does not simply liquidate discontinued items through its offers. Newegg's product managers strategically select and price each deal to generate excitement. Picking good deals requires "incredible talent," Luthi says.

Here are the three key factors used to design offers:

- Audience

The team strives to pick products that will interest one of two audiences: customers who buy consistently, and people who visit the site without buying.

"We are trying to determine what to give them, what's going to interest them enough to come and to purchase the Shell Shocker," Luthi says.

- Discount

The team researches the average price of a product online and matches that against the largest discount Newegg can offer. For example, selling a $99 product for $90 is not likely to build excitement.

"But if a competitor is selling it at $99 and I can sell it for $49 or $39, I'm going to create buzz," Luthi says. "It's a significant enough discount that, not only do you want it, but you want to buy it right now."

- Manufacturers and partners

The team also positions the program as a promotional tool for its suppliers. For example, a manufacturer wanting to promote a product can offer it at a steep discount through Shell Shocker.

"It's a great opportunity to be on the homepage of a leading retailer," Luthi says.

Useful links related to this article:

1. Shell Shocker page
2. Email alert
3. Email CTA signup for SMS alerts
4. Newegg homepage ad

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