E-mail Marketing Masterclass 28 th April 2009 Dr Dave Chaffey www.davechaffey.com/blog www.davechaffey.com/presentations

The biggest challenge in Email marketing?

Today’s topic: improving engagement

Today’s topics Benchmarking engagement What should I be measuring? How to best target & personalise Behavioural targeting Creating a structured testing programme What to test? How to test? What other companies are doing? Case studies to inspire

Benchmarking engagement

What should I be measuring?

How to best target & personalise

Behavioural targeting

Creating a structured testing programme

What to test?

How to test?

What other companies are doing?

Case studies to inspire

About Dave Clients include 3M, BP, CIPD, Euroffice, HSBC, IDM, Intel, Sony, Tui and Tektronix. Analyst at www.econsultancy.com . E-marketing consultant at www.cScape.com . E-marketing trainer and consultant Cranfield School of Management Leeds University Business School Warwick (E-business) 2 Previously Birmingham, Derby Visiting lecturer at leading UK business schools Internet Marketing E-business and e-commerce Mgt Total E-mail Marketing Author of 6 best-selling business books Recognised by the CIM in 2004 as one of 50 people who have ‘shaped the future of marketing’ and by DTI in 2005 as a key contributor to the development of UK E-commerce in the last 10 years An e-marketing “guru”! www.davechaffey.com/blog

Cranfield School of Management

Leeds University Business School

Warwick (E-business) 2

Previously Birmingham, Derby

Internet Marketing

E-business and e-commerce Mgt

Total E-mail Marketing

Activity. What affects E-mail campaign success rate? CREATIVE RELEVANCE, Readability, Reach Individualised, ISP delivery, INCENTIVISATION TARGETING/Segmentation INTEGRATION CONTENT/COPYWRITING ATTRIBUTES LANDING PAGE

CREATIVE

RELEVANCE, Readability, Reach

Individualised, ISP delivery, INCENTIVISATION

TARGETING/Segmentation

INTEGRATION

CONTENT/COPYWRITING

ATTRIBUTES

LANDING PAGE

About You How advanced is your email marketing? Level 5: Optimised Multiple segments, subject lines optimised in real-time, single customer view, optimized event-triggered mailings, Full RFV Level 4: Contextual relevance Event-triggered lifecycle, mailings: Welcome strategies, post-purchase and reactivation – but not optimized, Basic RFV Level 3: Basic test and learn Subject line testing, AB Testing, Follow-up on open/click behaviour Level 2: Increasing relevance Broadcast to multiple segments (and track response) Level 1: “Pray and Spray” Emails untargeted and untracked

Level 5: Optimised

Multiple segments, subject lines optimised in real-time, single customer view, optimized event-triggered mailings, Full RFV

Level 4: Contextual relevance Event-triggered lifecycle, mailings: Welcome strategies, post-purchase and reactivation – but not optimized, Basic RFV

Level 3: Basic test and learn Subject line testing, AB Testing, Follow-up on open/click behaviour

Level 2: Increasing relevance Broadcast to multiple segments (and track response)

Level 1: “Pray and Spray” Emails untargeted and untracked

Benchmark your Email capabilities! Presented by Grant Baillie of Argos at 2008 Email marketing conference, with permission

1 Measuring engagement

3 advanced ways of measuring email engagement How do you measure engagement with email? Open/clicks/CTOR is NOT good enough, instead… Opens/clicks/CTOR/sales: 1. At position in lifecycle 2. By segment 3. By offer / email type 4. Aggregated over a longer time period

How do you measure engagement with email?

Open/clicks/CTOR is NOT good enough, instead…

Opens/clicks/CTOR/sales:

1. At position in lifecycle

2. By segment

3. By offer / email type

4. Aggregated over a longer time period

Measuring list activity – email engagement These “hurdle rates” are for whole list. Repeat: By segment By product categories purchased Tip. Measure the overall health of your list through activity / inactivity levels over time

These “hurdle rates” are for whole list. Repeat:

By segment

By product categories purchased

Avoiding disengagement Not open email Open email Click through Purchase Weeks or campaigns 1 2 3 4 5 6 7 8 Potential Disengagement (Don't let this happen) Successfully engaged (Do more of this) Semi-Engaged (change something now) Increasing engagement Source: Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

2 Which are the best targeting variables?

easyJet.com example Source: Brand Republic Email marketing conference Personalising by departure airport increased response by 5 percent

Example of dynamic content insertion Presented by Grant Baillie of Argos at 2008 Email marketing conference,, with permisssion Tip. Change order of offers or features according to segment to increase relevance

Q. Which targeting factors give best response?

Farming segments Purchase behaviour: Buyer vs non-buyer One-time vs multiple Email activity Active vs inactive clicker Number of clicks on email Web activity Visited, never visited Browsed, not bought Channel activity Web vs Store vs Catalogue RFM Proportional Hard-coded Category purchased Appending lifestyle data Value

Purchase behaviour:

Buyer vs non-buyer

One-time vs multiple

Email activity

Active vs inactive clicker

Number of clicks on email

Web activity

Visited, never visited

Browsed, not bought

Channel activity

Web vs Store vs Catalogue

RFM

Proportional

Hard-coded

Category purchased

Appending lifestyle data

Value

Using predictive modeling to nurture best customers Some variables used to identify “best” included: Total # of purchases The more the better Time on file The younger the better Months since first purchase The more the better Months since last purchase The less (or more recent) the better Total e-mails clicked on over the past year The more the better Total e-mails opened over the past year The more the better… though not always predictive

Some variables used to identify “best” included:

Total # of purchases

The more the better

Time on file

The younger the better

Months since first purchase

The more the better

Months since last purchase

The less (or more recent) the better

Total e-mails clicked on over the past year

The more the better

Total e-mails opened over the past year

The more the better… though not always predictive

The eBay approach: segmentation layers

Targeting customers according to value Customer potential Customer quality high low low high One time shoppers with low potential Average customers Good customers Very good customers 15 % 15 % 60 % 10 % Indicators for customer quality Indicators for customer potential Order value per received catalogue Order value per season Gross margin in % of net sales Returns in % of order value Last date of purchase Number of active seasons Channel usage score Number of different product categories Source: Chris Poad, Otto, E-consultancy masterclass 2006

Order value per received catalogue

Order value per season

Gross margin in % of net sales

Returns in % of order value

Last date of purchase

Number of active seasons

Channel usage score

Number of different product categories

Behavioural targeting

Exactly what is behavioural targeting? Event based. A set of individuals who do the same thing on a web site and therefore become a segment of individuals Browsing behaviour. A set of individuals who have shown the same behaviour, for instance browsing the same website sections or pages or using similar paths to the website. Email response behaviour. For instance, active vs inactive, openers, clicker non converters etc Online purchase history. Buyers/non buyers, onetime buyer/multibuyers, loyal or transient, brand engaged or disengaged. RFM / RFV Matthew Kelleher – Redeye blog - http://www.redeye.com/blog

Event based. A set of individuals who do the same thing on a web site and therefore become a segment of individuals

Browsing behaviour. A set of individuals who have shown the same behaviour, for instance browsing the same website sections or pages or using similar paths to the website.

Email response behaviour. For instance, active vs inactive, openers, clicker non converters etc

Online purchase history. Buyers/non buyers, onetime buyer/multibuyers, loyal or transient, brand engaged or disengaged.

RFM / RFV

BT - It’s all about past actions… Purchase Dispatched +7d +14d +21d Recognition of previous purchase

Using subscription behaviour to set broadcast time Source: Econsultancy Innovation Report

Behavioural Email Dramatically Increases Online Conversion for Sainsbury's Bank RedEye followed up with behaviourally triggered email campaigns across Sainsbury’s Bank pet and car insurance products. Utilising activity driven triggered emails in response to saved quotes and basket abandonment, RedEye analytics enabled Sainsbury’s Bank to recognise specific online behaviours, targeting emails in response to customer engagement in definitive areas of the site. Sainsbury’s Bank was delighted to record an unprecedented ROI of 750% across their pet insurance promotions. Source: case study

Behavioural Email Dramatically Increases Online Conversion for Sainsbury's Bank

RedEye followed up with behaviourally triggered email campaigns across Sainsbury’s Bank pet and car insurance products.

Utilising activity driven triggered emails in response to saved quotes and basket abandonment, RedEye analytics enabled Sainsbury’s Bank to recognise specific online behaviours, targeting emails in response to customer engagement in definitive areas of the site.

Sainsbury’s Bank was delighted to record an unprecedented ROI of 750% across their pet insurance promotions.

Need to segment and test follow-ups: William Hill example Source:

Basic registration triggered e-mails B2C brand education B2B registration follow-up

“ Learn more through time…”

Incentivising multichannel purchase

The Argos approach: Identifying “unfulfilled intent” Tip. Identify Next best “hero” product for each category

Parlez-vous RFM/V? 5 1 2 3 4 5 R ecency F requency M onetary 1 2 3 4 5 1 2 3 4 5 Each R decile contains 20% of all customers Recency : Time since customer completed an action e.g. click, visit, log-in, new purchase Frequency : Number of times action completed in period Monetary value : Amount transacted, average balance in period HIGHEST Lowest Note alternative term: Frequency Recency Amount Category = FRAC analysis 1 3 4 Phone E-mail/web only Direct mail

RF scoring example Source: Article by Mark Patron + Matthew Kelleher – Interactive Marketing journal – January to March 04 – SilverMinds music catalogue Scoring: Recency Low 1 = > 24months 2 = 19-24 months 3 = 13-18 months 4 = 7-12 months 5 = 0-6 months High Frequency Low 1 = One purchases 2 = Two purchases 3 = Three 4 = Four 5 = Five High Note here boundaries are defined to illustrate behaviour. There are a different number in each group

A RF(M) segmentation example for a theatre Booked 6+ more than a season ago Very rusty Booked 6+ last season Recent Booked 6+ events in current season Current subscribers 6+ (F) attended in 36+ months Very rusty twicer attended >12, < 36 months Rusty twicer attended < 12 months Recent twicer Twicers (F) attended 36+ months (R) Very rusty oncers attended >12<36 months (R) Rusty oncers attended <12 months (R) Recent oncers Definition Oncers (F)

Q. How well are you using ‘Sense & Respond’ marketing Source, adapted from:

How Behavioural Email develops over time Entry level 5 - 8 triggers Medium level 17 – 30 triggers Upper level 20 – 50 triggers Nirvana 50 – 500 triggers Nursery program Site Activity program Full marketing email program Customer service emails Source: Customers Welcome email Behavioural Cross sell Regular marketing emails Site segmented Activity flagging RFM Predictive Lapsed / Churn By product Site down apology Birthday / Xmas Emails Repeat abandoner Future Release alert Back in stock alert Lapsed Activity Non cross sell Not returned in 14 days Not re-purchased in 14 days Process abandonment X-sell programme By product Newsletter Not transacted By content group visited Content triggers

More inspiring examples of touch strategies

Re-mailing to opening non-converters Response increases by 25% for campaign First Campaign, Open rate, 8 to 10% CCR = 0.2% Second Campaign, Open rate, 50 to 75% CCR = 0.2% Source: E-consultancy Masterclass - BCA Tip. Remind with multimessage campaigns

Reminder emails: Re-mailing with urgency Response increases by 40% for campaign First Campaign, CCR = 0.2% Second Campaign, CCR = 0.2% Source: E-consultancy Masterclass – BCA CCR = Campaign conversion rate

Combining Email with offline communications Combined response from e-mail and direct mail is 125% better than no e-mail. Response increases, 100% for direct mail piece. Source: E-consultancy Masterclass 2005 - BCA Pre-mail, with online response Teaser e-mail. No online response Direct Mail Direct Mail

Email Campaigns that Build… Welcome Email Time-limited offer Offer Extension

Example New account welcome: Email No. 1 Welcomes customers to their new account Product information welcomes customers to their new account Source: Forrester

Example Account usage: Email No. 2 Encourages customers to activate their Portfolio Management credit card Encourages customers to activate their Portfolio Management check card Source: Forrester

Example Cross-sell: Email No. 3 Cross-sell message: online banking Cross-sell message: Bill pay and online statements Source: Forrester

Example Up-sell: Email No. 4 Up-sell message: Personal loan and lines of credit Up-sell message: Home equity loan or line of credit with your mortgage Source: Forrester

3 Creating a testing and optimisation plan for Email marketing

Q. How can I build in testing – Sixteen testing ideas Testing copy in e-mail headers – different subject lines and from addresses. Making “Pre-headers” more persuasive Different offers – does 10% discount or £50 off work best – it is usually the latter. Are secondary offers useful in elevating the overall response? Different template layout designs Timing of broadcast on different days of the week, times of day Text vs HTML , Embedded versus linked images Tone of voice in copy / personality of e-mail. Long vs short copy Calls-to-action (number and location of links) Personalisation for targeting and dynamic messaging Use of video and animation Incorporating social media and customer involvement Integration with other media (e.g. e-mail teaser before DM or response mechanism after DM). Which newsletter or solus e-mail template is most effective? Which frequency interval for a newsletter maximises revenue (while avoiding perceptions of SPAM) Touch strategy for event triggered e-mail – which sequence of offers and intervals between them work best?

Testing copy in e-mail headers – different subject lines and from addresses.

Making “Pre-headers” more persuasive

Different offers – does 10% discount or £50 off work best – it is usually the latter. Are secondary offers useful in elevating the overall response?

Different template layout designs

Timing of broadcast on different days of the week, times of day

Text vs HTML , Embedded versus linked images

Tone of voice in copy / personality of e-mail.

Long vs short copy

Calls-to-action (number and location of links)

Personalisation for targeting and dynamic messaging

Use of video and animation

Incorporating social media and customer involvement

Integration with other media (e.g. e-mail teaser before DM or response mechanism after DM).

Which newsletter or solus e-mail template is most effective?

Which frequency interval for a newsletter maximises revenue (while avoiding perceptions of SPAM)

Touch strategy for event triggered e-mail – which sequence of offers and intervals between them work best?

Using Eyetracking research to improve Email marketing Heading and subhead copy critical First 2-3 words most important Make hyperlinked Large fonts work well Images often missed Use text link calls-to-action Readers scan down the left of an E-mail First part of para important F shape eyetrack Email intros skipped Use to personalise and engage e.g. with hyperlinks Need to deliver` Scannability and Skimmability See www.etre.com

Heading and subhead copy critical

First 2-3 words most important

Make hyperlinked

Large fonts work well

Images often missed

Use text link calls-to-action

Readers scan down the left of an E-mail

First part of para important

F shape eyetrack

Email intros skipped

Use to personalise and engage e.g. with hyperlinks

Which hypotheses could you test to optimize? i.e. which design elements will make a difference?

Response testing option A : Live split testing 50% of list: Subject Line 1 or Offer 1 Two or more alternatives are evaluated during broadcast 50% of list: Subject Line 2 or Offer 2 100% List http://www.company.com/promotion.htm?SL1O2

Q. Short or long subject lines - which are best?

Recommendation - Test alternate subject lines Split or live testing Subject line 1: “ Autumn offers start today - £20 cash-back” Open rate 23.4% Subject line 2: “ £20 cash-back this week only” Open rate 36.8% Subject line 1: “Travel is fun, not a high street trek” Open rate 39% Subject line 2: “A click away from all your foreign currency” Open rate 34% Source: HSBC Presented to MAD conference With permission

eBay treats Subject line optimisation seriously

Testing option B. AB pre-test for major campaign Test version A Send Volume: 10,000 Sample criteria: Random Click through rate: 6.1% Test version B Send Volume: 10,000 Sample criteria: Random Click through rate: 4.5% Main Broadcast Send Volume: 180,000 Click through rate: 5.8%

Test length – Which is best: short or long?

On the other hand… Tip. Tease (sometimes) Don’t give too much away in subject line or Email body

Test position and form of hyperlinks

Q. Are you using effective calls-to-action? Lorem ipsum dolor sit amet, consectetuer adipiscing elit. In eget nulla ac eros eleifend vestibulum. Aenean felis wisi, consequat vitae, dapibus sed, nonummy a, lorem. Sed fringilla. Phasellus pellentesque neque vel leo. Sed pretium risus a lacus. Nulla ipsum. Click here! , Vivamus erat urna, porttitor et, blandit aliquet, lacinia id, orci. Phasellus vitae mauris. Curabitur tristique, turpis at fringilla ultrices, mi dui consectetuer nibh, id condimentum ipsum magna in dolor. Quisque imperdiet. Curabitur dui. Sed augue. Curabitur imperdiet. Use Action Verbs : Get a Quote Register now Make images clickable : Optimise for organic search in anchor text i.e. Not click here for your car insurance quote But, Get an instant car insurance quote now ! Make Hyperlinks long and buttons larger : I am an easier to click than me ! Fitts law states that “ Time to reach a target with mouse is proportional to the distance to the target divided by the size of the target ”. Use Hyperlinks : Within body copy

Lorem ipsum dolor sit amet, consectetuer adipiscing elit. In eget nulla ac eros eleifend vestibulum. Aenean felis wisi, consequat vitae, dapibus sed, nonummy a, lorem. Sed fringilla. Phasellus pellentesque neque vel leo. Sed pretium risus a lacus. Nulla ipsum. Click here! , Vivamus erat urna, porttitor et, blandit aliquet, lacinia id, orci. Phasellus vitae mauris. Curabitur tristique, turpis at fringilla ultrices, mi dui consectetuer nibh, id condimentum ipsum magna in dolor. Quisque imperdiet. Curabitur dui. Sed augue. Curabitur imperdiet.

Integrated hyperlinks: email best practice

Highlight your offer with a “Johnson box”

Using the passcode as a response activator Combining simple web form and ‘Exclusive’ code encourages click through and conversion to site. Prospects do not enter payment details Conversion rate is three times higher than sites without passcode. Source: E-consultancy Masterclass 2005 - BCA

Copyable offer code

Test video

http://www.rei.com/email/gearmail/gm022709_vid.html http://www.retailemailblog.com/2009/03/am-inbox-reis-embedded-animation-video.html

Make your emails social! Web 2.0 = Participation + Interactivity + dialogue : Creation of user generated content – users can comment on blogs or upload videos and are updated by feeds. Rating of content and online services – social bookmarking services such as deli-cious and Traceback comments on some blogs. Mashups – Different types of content are merged, for example YouTube videos or Google Maps can be integrated into a web site. Widgets or gadgets can be integrated into users home pages on social networks or personalised home pages like Netvides or iGoogle ( www.google.co.uk/ig ).

Web 2.0 = Participation + Interactivity + dialogue :

Creation of user generated content – users can comment on blogs or upload videos and are updated by feeds.

Rating of content and online services – social bookmarking services such as deli-cious and Traceback comments on some blogs.

Mashups – Different types of content are merged, for example YouTube videos or Google Maps can be integrated into a web site. Widgets or gadgets can be integrated into users home pages on social networks or personalised home pages like Netvides or iGoogle ( www.google.co.uk/ig ).

Optimise your “pre-headers”!

Make your Emails mobile

Q. Are you getting the tone right?

Bonus! Optimisation case study – Audible.co.uk Acquisition Retention Conversion 5%  in acquisitions 5%  in revenue; 40% better with M/F split Email sales  25% Source: Thanks to Louis Wahl, Marketing Director at www.audible.co.uk

Audible.co.uk Campaign targeting matrix

Acquisition Email Sent to new leads, daily Two test offers – ’30-day Free Trial’, ‘£6.99 per month’ Targeted by gender Limited to first send only High open rates Acquisition

Sent to new leads, daily

Two test offers – ’30-day Free Trial’, ‘£6.99 per month’

Targeted by gender

Limited to first send only

High open rates

Retention – dynamic container Sent to members and customers, weekly Targeted by customer status A la Carte vs AudibleListener Repeat sending to opening, non-purchasers 25% more conversions than single send

Sent to members and customers, weekly

Targeted by customer status

A la Carte vs AudibleListener

Repeat sending to opening, non-purchasers

25% more conversions than single send

Conversion – reactivation - dynamic Sent to dormants, at ‘end of life cycle’ A/B tested against other generous offers Best performing offer sent to bulk Repeat sending to opening, non-purchasers Male vs Female

Sent to dormants, at ‘end of life cycle’

A/B tested against other generous offers

Best performing offer sent to bulk

Repeat sending to opening, non-purchasers

Male vs Female

Discussion and Q & A Format – Split into groups to discuss how to make these types Behavioural marketing successful: 1. Welcome strategies 2. Re-engagement strategies 3. Targeting based on past behaviour Please discuss key issues / questions which will govern success, e.g. frequency, personalisation, testing Report back at …. with: Best practice recommendations and examples of approaches Questions

Format – Split into groups to discuss how to make these types Behavioural marketing successful:

1. Welcome strategies

2. Re-engagement strategies

3. Targeting based on past behaviour

Please discuss key issues / questions which will govern success, e.g. frequency, personalisation, testing

Report back at …. with:

Best practice recommendations and examples of approaches

Questions

Retail Gather softer information initially e.g. “how savvy with product” clicks populate database – according to product / vertical Accelerated first offer – First welcome email has strong offer to segment - danger of extended offers Apology emails Service emails e.g. password for reactivation Basket abandonment – ask why – provide phone messages – give main reasons

Gather softer information initially e.g. “how savvy with product” clicks populate database – according to product / vertical

Accelerated first offer – First welcome email has strong offer to segment - danger of extended offers

Apology emails

Service emails e.g. password for reactivation

Basket abandonment – ask why – provide phone messages – give main reasons

Financial Services 1 Enewsletters in FS have to be info-led – need consistent format to highlight products and call-to-action 2 Cross-sell upsell in service emails? Using store&save of quote information email 3 Basket abandonment – review all steps – include relevant information

1 Enewsletters in FS have to be info-led – need consistent format to highlight products and call-to-action

2 Cross-sell upsell in service emails? Using store&save of quote information email

3 Basket abandonment – review all steps – include relevant information

Travel Reactivation example: Inactives tested Leave fallow Send single email – do you want to hear from us? Ultimate goal to avoid fallow Welcome example: Asking product interests and timing of holiday Then test 6-8 initial emails for right frequency

Reactivation example:

Inactives tested

Leave fallow

Send single email – do you want to hear from us?

Ultimate goal to avoid fallow

Welcome example:

Asking product interests and timing of holiday

Then test 6-8 initial emails for right frequency

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