September 24, 2009
How To

Transactional Email Overhaul: 5 Strategies to Revive an Older Program

SUMMARY: Many marketers know the value of well-placed promotions in transactional emails, but the automated nature of those sends might make it tempting to simply set up a program and ignore it.

See how a marketer is re-invigorating a transactional email program that had been on autopilot for too long. Includes strategies for targeting improvements by focusing on metrics, creative, segmentation and testing.

When Shera Shrago, Senior Manager, Interactive Marketing, joined FootSmart 14 months ago, she was happy to see that the specialty shoe and foot health products retailer had a transactional email marketing strategy in place.

The problem was, the marketing tactics, offers and creative used in the team’s transactional email program hadn’t changed much over the years.

"It wasn’t a managed program, it just operated on auto-pilot," says Shrago. "The marketing in there should not be automatic. We needed to manage it as a program, just as we would any promotional campaign."

Shrago and her team have spent months overhauling their transactional email marketing program to make the most of the opportunities available from those messages, which achieve an average 30% higher open rate than their standard promotional email messages, and a 300% higher clickthrough rate.

Here are five strategies to review and update major elements of a transactional email program, including:
o Metrics
o Design
o Offers
o Segmentation

Strategy #1. Focus on detailed metrics

Shrago’s team had no detailed reporting capabilities around their transactional email program. They could see top-level results from the program, but couldn’t dig into specific metrics that showed which offers, or which specific emails, were attracting the most customer response.

Their first step in the program overhaul was to work with the IT team build a new back-end reporting system that combined metrics from multiple databases, including:
o Email metrics, such as number sent, open rates and clickthrough rates
o Financial metrics, including measurement of revenue *and* profit from specific email offers

"We have given our developers a whole lot of love," says Shrago.

The new platform allowed the team to create a weekly report that provided a detailed look at the performance of their transactional email program. The report includes:

- An overview of results for the program as a whole, including email and financial metrics.

- Results for specific message types, such as:
o Order confirmation
o Shipping confirmation
o Exchange confirmation
o Order cancel confirmation
o Back-order notice

- Results for individual elements and calls-to-action within each message, such as:
o Non-promotional, transaction-related links
o Promotions or special offers
o Relevant product recommendations

Strategy #2. Update creative

The team felt that their transactional emails looked dated. In response, they redesigned their two most important transactional email messages, order and shipping confirmation.

- The existing email template was text heavy, so the team incorporated more graphics into the new design. For example, they added:
o Images of the products being shipped
o A new top navigation bar

- They also redesigned promotional elements within the message to make them stand out more. For example, they placed suggested related products in a green, shaded box in the right column.

- They also replaced a text offer at the bottom of the message -- typically offering a discount on repeat purchases -- with a graphic.

They switched to a graphical presentation for two reasons: It was more noticeable, and it required the recipient to click through to redeem the offer, rather than giving them a promo code to enter in the shopping cart.

The team had experienced several instances of hijacked offer codes -- when a special offer intended for previous purchasers was being shared on blogs, affiliate sites, and the like. Making the offer a graphical element allowed them to hide the actual discount code from the user.

As a result, the team has seen a decline total revenue and profits associated with transactional emails. But those figures had been inflated due to the widespread hijacking of offer codes meant only for repeat purchasers.

Strategy #3. Segment offers by email type

The team reviewed their strategy for matching offers to different types of transactional emails. Tests and changes included:

- Removing a discount offer from the purchase confirmation/Thank You email.

Customers had been receiving a discount offer in both their order confirmation and shipping confirmation emails. The team tested offering a discount only in the shipping confirmation email.

They wanted to maintain revenue from repeat purchases, while cutting down on order cancelations. Customers who had just completed a full-price purchase, then received an instant email with a discount offer, might be tempted to cancel their original order and shop using the discount code.

- Offering different levels of discounts depending on the trigger for the transactional email.

The team is testing customized special offers in out-of-stock notices, cancelation and exchange confirmations based on the scenario for the transaction. For example, a confirmation of a cancelation initiated by FootSmart would receive a larger discount offer than confirmation of a cancelation initiated by a customer.

Strategy #4. Customize offers by user type

FootSmart segments their customer base at a high level according to shoe and non-shoe business. Non-shoe customers tend to have a lower average order value, so the Shrago and her team tailored their transactional email offers according to the customer segment.

For example, a non-shoe customer might be presented with a higher threshold to achieve their discount, such as spending $60 to receive a discount, vs. $40 for a shoe customer.

Strategy #5. Adjust offers for seasonality

Time and seasons were another factor the team considered in their review of transactional emails.

- They tested matching offers and product promotions to seasonal needs. For example, offering a discount and free shipping on sandals from March-June, when customers might be in the market for sandals as an additional purchase.

- They're also tested rotating offers on a weekly or monthly basis, rather than leaving the same offer on the same email for several months at a time.

"I feel really good about the process," says Shrago. "We’re not going to sit back like we did years ago."

Useful links related to this article:

Creative Samples from FootSmart's transactional email overhaul:

StrongMail: FootSmart’s email service provider

Coremetrics: The analytics and product recommendation platform the team uses to drive their ecommerce program


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