This morning I presented at the annual American Business Media conference in Jacksonville Florida.  I spoke about the perfect storm in the marketing world today.  It’s caused by a combination of an accountability crisis that has been troubling marketing for years and a recession that has really put this crisis in the spotlight. 

I briefly touched upon the topics I covered at the ANA conference a couple of weeks ago and used Claude Hopkins’ opening paragraph to show that many companies have forgotten about the very basics the early pioneers of scientific marketing had mastered more than 80 years ago.

Then I shared a case study below which describes how we helped a national retailer optimize their email strategy.  It was originally put together by Robert Schwartz who heads up the Digital Dialogue group at Ogilvy.  Robert and his team can do miracles with email!

The power of email

The recession has been a real accelerator for the adoption of innovative email marketing.  According to Marketing Sherpa’ “Marketing & the Economy Survey” 48% of marketers plan on increasing the use of email.  That is higher than any other channel, including search and social media.  Cost efficiency is probably the main reason for this but it’s not the only one.  For many marketers email is a much less daunting medium than search and social media for example.  Most have been practicing direct marketing for years and are therefore very familiar with its principles, which can be implemented very cost effectively in email.  Other reasons for email’s popularity are technological improvements that have opened up possibilities in dynamic, highly personalized messaging and rich media delivery.

This case study describes how we helped a national retailer optimize its entire email communications channel in 12 months.  The scale of this engagement was enormous.  They send out approximately 2 billion per year that are generated through more than 100 automated email triggers (eg shopping cart abandonment, thank you emails, …) and over a thousand email campaigns created by the retailer’s different business units.  On this scale, even the smallest incremental improvement has a tremendous impact on overall marketing ROI.  We optimized the email channel through 5 workstreams : Capture, Optimization, Segmentation, Dynamic Content and Creative 2.0.

Capture

Optimizing the email channel starts with capturing the email addresses and the additional data that can help drive relevance through personalization.  This was a crucial.  Because of the low margins and relatively high cost of direct mail and FSI’s our retailer needed to dramatically increase their email capture.  There is no silver bullet when it comes to email capture.  The key is to relentlessly capture email at every touchpoint.  We implemented and optimized email capture mechanisms at the point of sale, in the call centers and on the homepage.  In addition to that we worked with external vendors to append email addresses to the customers we already knew.  As a result of this very aggressive email capture strategy we tripled email opt-in’s in 12 months.

Optimization

This workstream consisted of both technical and creative optimization.  We implemented standard technical assessment tools to improve overall rendering and deliverability of emails.  We optimized the creative, content and messaging of our emails through heatmapping and testing.  This often resulted in very simple improvements that had high impact.  One example of this was the reactivation program which was designed to reactivate customers who hadn’t interacted with the email channel in the last 3 months.  We optimized this program and put in place a 3 touch communications cadence where the 1^st touch would offer free shipping, the 2^nd free shipping and 10% off and the 3^rd free shipping and 15% off.  The reactivations doubled as a result of this and the program’s revenue grew 129%.

Segmentation

We built a highly sophisticated targeting engine that allowed them to micro segment their customers based on life time value, general shopping behavior, drive time period specific behavior (eg holidays, back to school, fathers day, …), propensity to buy and several other segmentation layers.  This allowed the various constituents within the organization to find their high potential targets with pinpoint accuracy and it helped them deliver the right message at the right time.  We complemented this enterprise wide targeting engine with an email specific segmentation.  This segmentation grouped the email audience based on their engagement with the email channel and based on browsing behavior we observed on the website.

Dynamic content

The segmentation enabled us to dynamically personalize the content in our emails based on the customer’s shopping and browsing behavior.  We also dramatically shifted the focus from purely promotional messages to transactional messages that had promotional content embedded in emails that were sent out for order confirmations, warranty details and other transaction related occasions.  Open rates for these transactional messages average 80% compared to only 27% for purely promotional messages.  Our new dynamically targeted emails increased the likelihood by a factor of 11!  We also saw a 59% increase in average order value.  These incredible results demonstrate the power of increasing relevance through personalization.

Creative 2.0

The email inbox has for a long time been the wasteland of creativity.  New technology has changed that and has given us the ability to deliver fresh, exciting and emotionally engaging content through email.  This can be done through consumer generated content and innovative use of video.  In December of last year we ran a campaign that allowed consumers to send donations and support messages to the troops through an online wish registry.  We took one of the campaign’s TV spots and edited so that it would fit into a smaller area of an email and would start playing automatically when the email was opened.  The results were phenomenal.  40% of all messages left on the registry and 25% of all online donations were driven by this single email.