By Joe Keenan
Special to the eTail Blog
In a session at the recent eTail conference in Boston, Jim Moore, president and CEO of The PSNE Group, parent company of online footwear retailer Birkenstock Central, discussed how his company’s email program has leveraged customer lifecycle management techniques to increase revenue from the channel. Moore focused on three specific areas of Birkenstock Central’s email program: acquisition, triggered messaging and re-engagement campaigns.
It’s been proven in numerous studies that email addresses are worth money to retailers. With this in mind, Birkenstock Central dedicated a space in the upper left-hand corner of its homepage to an email sign-up banner ad that included a promotion: get a free pair of socks with an order of $50 or more. The move paid off with an average of nine sign-ups per day. After some nudging from its email service provider, Listrak, Birkenstock Central decided to test that same email sign-up promo via an interactive pop-up ad on its homepage. The result: the average number of email sign-ups increased to 25 per day. The lesson here: Be willing to test everything (in this case pop-ups). The results may surprise you.
Consumers who signed up for Birkenstock Central’s email program were immediately enrolled in a “classic” welcome series campaign. The campaign netted an impressive 81 percent open rate, 55 percent clickthrough rate and 44 percent conversion rate. A post-purchase email sent to subscribers produced an open rate of 50 percent, clickthrough rate of 10 percent and 7 percent conversion rate.
Birkenstock Central launched a triggered email program around two events — when a product a customer wants to order comes back in stock, and when a consumer abandons a shopping cart on its website. To say it’s been a success would be an understatement. Triggered emails account for only two percent of Birkenstock Central’s total email volume, yet produce 23 percent of the retailer’s overall email revenue.
For the abandoned cart campaign, the first step in the process is to know your abandonment rate, Moore said. Services such as Google Analytics, Omniture, Coremetrics and Webtrends help you do this. Then Birkenstock Central analyzed how long to wait after the triggered event (abandoned cart) before sending the consumer an email. By testing wait time, the company saw that sending an email one hour after an abandoned cart produced the highest clickthrough rate, but waiting six hours yielded the highest average order value. So Birkenstock Central splits the difference and sends its abandoned cart email campaigns three hours after the event.
Birkenstock Central also looks at whether the consumer receiving the abandoned cart email has purchased from it before. Past customers receive a series of two emails with an interval of two days between the two. There are no offers or promotions included in either of those emails. If the cart abandoner isn’t a past purchaser from Birkenstock Central, they receive a series of five emails over 10 days. The first email in the series doesn’t include an offer or promotion, but then emails two through five include five percent, 10 percent, 15 percent and 20 percent discount offers. Sales volume doubled in the fourth and fifth emails, Moore reported.
The unsubscribe rate for Birkenstock Central’s batch-and-blast emails is .45 percent, while triggered emails, which would be expected to be significantly higher, is only slightly higher at .49 percent. The open rate for emails one through five in the abandoned cart series are 12.7 percent, 15.6 percent, 15.9 percent, 9.3 percent and 8.6 percent, respectively. Even at the fifth email in the series, the open rate is still higher than what most retailers expect with a batch-and-blast email campaign. For that reason, Birkenstock Central is going to be adding a sixth email to the series, Moore said.
With the help of Listrak’s email acquisition efforts, Birkenstock Central is now able to reach 42 percent of its cart abandoners via email. That has resulted in a 300 percent increase in revenue from its email program.
Moore provided the audience of retailers with three best practices when implementing an abandoned cart email program:
1. Leverage data for maximum campaign return on investment
2. Optimize campaign timing by testing
3. Manage content assets for the best user experience.
When a customer orders a product from Birkenstock Central that’s out of stock — and that’s more common for a shoe retailer which has to keep multiple sizes of the same shoe in stock — a message is automatically displayed to the customer letting them know. Within this message the customer is given the option of being alerted via email when that particular product is back in stock. The retailer’s back-in-stock email has a clear call to action — a large red “Buy Now” button. The out-of-stock campaign has averaged a 33 percent open rate with a 23 percent conversion rate.
When Birkenstock Central launched its re-engagement email campaign, it counted 16,000 inactive subscribers (no purchases for a year, no opens for six months). The retailer sent a series of three emails to all inactive subscribers. The first email in the series asks the simple question, “Would you like to renew your Birkenstock Central email subscription?” Fifty-one percent of the recipients clicked no, 37 percent clicked yes and 12 percent clicked on something other than yes or no (e.g., a web link).
The results of the re-engagement campaign were puzzling to Birkenstock Central: 211 subscribers were retained, 15,789 inactive subscribers were removed from its list and 4 orders were placed by the retained subscribers. So the retailer decided to perform a “discount ladder” test to see what was the lowest discount needed to get a repeat purchaser to purchase again. Birkenstock Central split its list up into 11 segments based on days since last purchase: no purchase, 0-30 days, 31-60 days, 61-90 days, 91-120 days, 121-150 days, 151-180 days, 181-356 days, 357-712 days, 713-1,028 days and 1,029-plus days.
The discounts offered were free shipping, 10 percent off entire order, 15 percent off entire order or 20 percent off entire order. After factoring in the cost of the discount and the cost of the goods sold, the free shipping offer generated an average profit of $25 per email, 10 percent off a $33 profit, 15 percent off a $44 profit and 20 percent off a $43 profit. The sweet spots, Moore said, were those subscribers who had never purchased before who received a 15 percent off discount, those subscribers who hadn’t purchased in 181-356 days who received a 20 percent off discount, and subscribers who hadn’t purchased in 1,029-plus days who received a 20 percent off discount.
Final Tips Moore closed his presentation with the following list of email best practices:
* Know your acquisition and attrition rates, then experiment
* Get a “welcome” series up and running
* Know your abandonment rate
* Leverage data (e.g., date of last purchase, average order value, average yearly spend) for maximum campaign ROI
* Test and optimize the timing of your triggered messages
* Segment your list by engagement
* Test different offers by engagement level
Joe Keenan is the senior editor of Retail Online Integration. In addition to writing cover stories and features for the print magazine, Joe oversees The ROI Report, the publication’s e-newsletter and is also the senior editor for the Target Marketing Group’s web-only brand, eM+C.