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Rethinking Inactives: Reduce First, Then Reactivate
Carey Marston, SmartPak Equine
Fred Swain, Tafford Uniforms
A show of hands please…
1. Do you have a concrete definition of what an inactive
is: including timeframe, purchase/offline activity, etc.?
2. Do you know what percentage
of your audience is inactive?
3. Have you implemented proactive programs to minimize
or re-engage inactives?
Inactives – a huge issue!
Bios
7
• Carey Marston Kegel– 6+ years @ SmartPak
• Customer Care Rep for 1 ½ years• Email Marketing Manager
– Avid equestrian
• Fred Swain– 16 years in direct marketing– Grew up in direct mail– 5 years @ Tafford Uniforms
• Email• Catalog• Loyalty• Male Model
(worst selling top ever)
8
Overview on SmartPak and Tafford Uniforms
SmartPak’s Email Program
9
• ~1MM emails sent per month
• Generates 34% of online marketing channel revenue
• Healthy transactional and triggered email program drives high return
• Email team comprised of:» Email Marketing Manager» Email Designer
Transac-tional &
Triggered Email; 11%
Promo-tional
Email; 89%
Email Volume
Transac-tional &
Triggered Email, 37%
Promo-tional
Email; 63%
Email Revenue
SmartPak’s Email Program FrameworkEmail Channel
Promotions Transactional Lifecycle
10
Newsletters
Offers
SmartPaks On-Hold Confirmation
Order Confirmation
SmartPaks Confirmation/Welcome
PasswordRecovery
Credit Card Failure Notification
SmartPaks Cancel Confirmation
SmartPaksWelcome
Order Reminder
Abandoned Cart
SmartPaks On-Hold
Post Purchase Review
SmartPaks Up-sell
Order Shipment Confirmation
Today, ~30 transactional and lifecycle emails per
day, and 10+ promotional emails per
month
Order Delivered Confirmation
Tafford’s Email Program
11
• 5MM emails sent per month
• Generates 35-40% of total sales• Send frequency is based on
program engagement
• Automated messages have always been a integral part of our plan. Welcome, Post Purchase, Abandoned cart, Anniversary campaigns all contribute high $/email .
• Email team consists of three staff members
12
Some might thinkwe are heavye-mailers in regardto frequency, but…
We tested mail frequency
over several months…
-most profitable was 5Xweek
-some segments could sustain 7X
Tafford’s Email Program
13
Inactives – The Past
Inactives (5 Second) History
Recognize ~50% database inactive
Testing showed suppression of inactives generates stronger engagement
Reactivation campaign launched
Proactively removing deadwood from list
2007
2010
Today
Work in progress…
SmartPak: Attempt #1
More transactional
Inactive definition = No open or click in 6+ months
SmartPak: Attempt #2
More promotional
Inactive definition = No open or click in 6+ months
(Updated messaging to be less confusing)
SmartPak: Attempt #3Most
effective
Current definition of inactive = No open, click OR purchase in
6+ months
Tafford Inactives; The historical perspective
Haphazardly ran reactivation campaigns– Wanted to institutionalize– Lots of excuses for not– no good reasons
Occasional Survey
Quarterly “Miss You” campaigns which continue to run
18
19
Root Causes
Define &
Segment
Test Read & Respond Automate
The Reason We’re All
Here…
Inactive Action Plan!
20
Inactive Action Plan!
Root Causes
Root Causes…
21
Never fully engaged - just wanted the incentive
Interests / needs have changed
Content did not meet expectations
Emails are being routed to junk folder
You send too often for their taste
You send un-personalized, irrelevant emails
Long sales/purchase cycle
Inability to update email address / change preferences
22
Define &
Segment
No Standard Definition of Email Inactive
Use your data to define inactive
for your business
Source: Email in Action, eConsultancy & EEC, February 2012.
Current Inactive Definition for SmartPak
NoOpens
No Purchases
6+ Months
Email Behavior
Purchase Behavior
Time Window
Who Stays (Who Goes?)
25
2 Types of Inactives
Dormant: Likely to reactivate with right offer and
timing
Deadwood: Not likely to ever reactivate, pose serious
deliverability risk
What to look for to create a successful inactive definition, for your business
Source: There's Inactive and There's Inactive, Eric Kirby, Magill Report, March 2012
Recently Took Closer Look At Data
26
Have Not Purchased in 3+ Years
55%
Purchased in Last 3
Years45%
Purchasers Most Recent Ship Date
Opted-in 2+ Years Ago
75%
Opted-in Less Than 2 Years Ago
25%
Opt-In Date for Non-Purchasers
Defining Inactives - Tafford
This has been a long and winding road…– changes in product and marketing mix
Sometimes we could seeinactives – sometimes, not
Definition of “INACTIVE” has followed this path
Started to use 12 months openers as engaged
27
28
2012 Focusing In
318,000 total opt ins174,000 opened in the last
12 months (only 55% of all opt ins)
132,000 opened in 4 months (only 42% of all opt ins)
Trimming the fat…
29
~ 42k recipients had received 160 emails from Tafford without a sniff
6.72MM habitually unopened emails out of the 60MM sent annually
That’s 11% of budget filed here!
30
Test
operation: Tafford still loves you
1 month reactivation test started on 2/14/12
Test split all subscribers who hadn’t opened in months 4-12.– Group A received 5 emails per week– Group B received 1 email per week but
they were not our normal email
31
32
operation: Tafford still loves you
33
Read & Respon
d
operation: Tafford still loves you results
34
Group A received 5 emails per weekGroup B received 1 email per week email
operation: Tafford still loves you takeaways
One month saved 10% of budgeted email qty
Generated slightly less profit but 4x higher $/email
35
Group A received 5 emails per weekGroup B received 1 email per week email
SmartPak: Reactivation Results
Metrics Reactivation Other Emails
Bounces 3% - 7% 0.57%
Open Rates 3% 18%
Revenue-per-Email
$0.06 $0.20
Total Reactivated
4% of total send
37
Automate
Operation: Tafford’s Endless Love
Reactivation program is the only program at Tafford that is not squarely focused on ROI Distant, Early Warning to locate subscribers before they are left out in the cold as chronic non-responders
1. re-engage2. save email send qty3. sell4. parting is such sweet
sorrow
38
Automated Program to Re-Engage
Just activated 5/1. No
results to report as of
yet
Steps in Re-Engagement Program
40
Track 1 Track 2
Track 3
Evaluate for 30 days for activity, move into once a month
frequency for 6 months.
41
Lessons Learned / What’s Next
Some Lessons Learned
OK to suppress
Most inactives are inactive
Right definition and approach is key
Be careful with messaging
What’s Next for SmartPak
Remove deadwood from list
Track the life of inactives
More behavior-based automation
ECOA on more recent non-responders
Tafford’s Endless Love: Results
Results are for one monthOpen rate of emails even higher than in testing phase– $/Email however is lower
Will run as is for May and re-evaluate underperforming parts of the program
44
Tafford’s Endless Love: One Month Takeaways
Results are limited
Will have May to develop more results and re-evaluate underperforming parts of the program
If part of the program doesn’t work…we’ll test something else!
45
What’s Next for Tafford
Monitor engagement based on both open and purchase dates
CONTINUE TO TEST
Add update preferences email and opt in and purchase date anniversary campaigns
Build preference adoption to send email messages based on the subscribers needs/wants
Key Takeaways
Don’t ignore inactives – be proactive
Focus on minimizing inactivity
Automate reactivation program
Test and optimize
Appendix
48
NOT ALL INACTIVES ARE CREATED
EQUAL
49
SmartPak: Analysis/Definition
Determine Root Causes
51
Are certain acquisition sources producing a higher rate of inactives?
Has increased frequency numbed them?
Is your email program stale and boring?
Are you attracting the right audience?
Are you delivering against expectations?
Do you have deliverability issues?
Retail Reactivation SuccessesProactive changes in email strategy driving permission marketers
Retail industry revamping email strategy » Recognition of customer burn-out (opening/clicking fewer emails than 4 years ago)» “Noise” increasing in average inbox (sophistication required to stand-out)
Nicole Miller improved messaging and cut volume (1 per week, down from 3) » Improved unsubscribe rates» Opens rates jumped from 15% to 40%» Email now 17% of sales (up from 10%)
GameStop split base into “general” and “rewards” customers» Decreased email to general, increased customization and targeting for rewards
customers» High-value rewards customers opening 30% of emails (compared to 10% of
generals)
Neiman Marcus increased email while stepping up use of customer data» Better targeting drove 10% to 20% increase in open and click-through rates» No increase to unsubscribe rates
Source: Stores Smarten Up Amid Spam Flood, Wall Street Journal , March 2012
After Identifying Inactives, Then What?Options to test
Reduce frequency
Remove bounced addresses » Always remove hard bounces
after first occurrence» Soft bounces after 3 to 5
consecutive occurrences
Update email addresses» ECOA campaign
Reengagement campaign» Strong offers and good, re-
engaging content » Avoid typical promotions (drive
up complaint rates)
Source: Delivery Rate Increases from 60% to 99% by Separating Inactive Subscribers, Marketing Sherpa, April 2012
The results for active subscribers:• 40%+ increase in sender
score• 50%+ increase in
average inbox placement rate
• 99%+ average delivery rate
The results for inactive subscribers:• 30%+ increase in sender
score• 90%+ average delivery
rate Results based on split IP (not always necessary to
drive improvement)
Deliverability Environment Changing
Must be more vigilant to ensure you land in inbox
ISPs determine which emails are delivered to its users (inbox, junk folder, dropped altogether)
Healthy bounce and low churn rates no longer enough to ensure inbox placement
Increasing focus on engagement in email deliverability» ISPs looking at engagement (e.g. opens, clicks, even “add to
address book” and “forward to friend”)» Three biggest players have changed the rules of the game
Gmail’s “Priority Inbox” filters on user’s interaction with emails
Yahoo’s filtering growing more complex Hotmail behavior-triggered filters (messages deleted
without being read, etc.)
Reactivation an imperative, (no longer a
nice-to-have…)
Analyze…
55
By list source
Age on file
Customer segment/profile
Subscriber survey responses
Creative test results
Response by message type/frequency changes
Who Stays (Who Goes?)
56
Which subscribers have potential, which don’t?
AOV
• Higher average order value will indicate higher value subscriber (correlates with acquisition source)
Acquisition Source
• Poor quality acquisition source usually indicates poor quality subscriber
Activity
• Big difference between subscribers who were never active and those who were active and then went dormantSource: There's Inactive and There's Inactive, Eric Kirby, Magill Report, March 2012
Today: Inactive (Re)Analysis for SmartPak
No Opens/Clicks
No Purchases
6+ Months
Prospects with no purchase 2+ years; inactives with no purchase 3+ years
No longer emailing(check purchase
activity, quarterly)
Receives reactivation campaign
Minimize Inactivity with Onboarding
Minimize Inactivity with Onboarding
Minimize Inactivity with Preference Center
Source: Good Preference Centers Can Hold Onto Subscribers Even as They Change, Marketing Sherpa, August 2011
Good preference centers help hold onto subscribers even as their needs/ interests change…
Email Marketing
Mobile
Social
Marketing
Automation
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