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Data dos and_donts-revised

3 Birds Marketing LLC
3 Birds Marketing LLC
3 Birds Marketing LLCCEO & Co-Founder of 3 Birds Marketing LLC at 3 Birds Marketing LLC

This presentation was given by 3 Birds Marketing Co-Founder Kristen Judd and CTO Chad Smith at the 13th Digital Dealer Conference and Exposition at the Mirage Hotel in Las Vegas on October 25, 2012. The presentation was an "email intervention" for automobile dealers to encourage them to consider the long term potential revenue loss associated with over-emailing the customer database.

Data dos and_donts-revised

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Data dos and_donts-revised
Two Unique Perspectives
What’s the Big Deal About Email?
Email is an efficient, cost effective method of communication with customers and prospects.


                Did you know…
                » 93% of online adults use email
                » ROI on email is $40 for every $1 spent*
                » More than ¾ of consumers prefer permission based email
                  for marketing messages**
                » Even the heaviest social media users still use email more




*2011 Direct Marketing Association
**2012 Exact Target study
Cheap,
Big Return,
Let’s Blast!




               NOT SO FAST!
Alternate Titles We Considered

    » Houston, We Have A Problem
    » More Is Not Always More
    » Step Away From The Send Button
    » Extreme Makeover: Email Edition
    » Email Intervention
The Hidden Power In Numbers




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This presentation will not be boring.
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Data dos and_donts-revised

  • 3. What’s the Big Deal About Email? Email is an efficient, cost effective method of communication with customers and prospects. Did you know… » 93% of online adults use email » ROI on email is $40 for every $1 spent* » More than ¾ of consumers prefer permission based email for marketing messages** » Even the heaviest social media users still use email more *2011 Direct Marketing Association **2012 Exact Target study
  • 5. Alternate Titles We Considered » Houston, We Have A Problem » More Is Not Always More » Step Away From The Send Button » Extreme Makeover: Email Edition » Email Intervention
  • 6. The Hidden Power In Numbers This is boring. This presentation will not be boring.
  • 7. Our Study » Industry knowledge » Input from Automotive Groups, General Managers, Internet Directors, and Trainers » Generally accepted industry statistics » More than 5,600 bulk email communications sent by automobile dealers totaling over 74,000,000 individual emails
  • 8. Average Automobile Dealer Database Size – Records With Email Addresses 23,000
  • 9. How Dealers Build Their Databases You work hard for the data. » Organic, 1st party leads » 3rd party leads » Other lead sources (OEM, group portals, etc.) » Showroom traffic » BDC, telephone calls » Vehicle deliveries » Service department » Conquest campaigns » Community events, sponsorships, contests, etc.
  • 10. Building the Database - Front End Additions to your database *Based upon an average automotive website conversion rate of 2%.
  • 11. Growing and Maintaining the Databases – Back End » How many repair orders do you do in your Service Department each month? » Did you know that, on average, 40% of your service customers did not buy their vehicles from you? » What is your email penetration rate? » Do you capture email addresses in the Service Department? » Do you update email addresses in service?
  • 12. Two Steps Forward, One Step Back? One Step Forward, Two Steps Back? » Average email unsubscribe rate automobile dealers is 0.42% » Unsubscribe rate range for top performing automobile dealers is <0.3% » Unsubscribe rate range for worst offenders is >1.0%
  • 13. What does responsible emailing look like compared to “blasting”? Responsible Emailers Offenders Frequency of email Several sends per month Several sends per month campaign sends Number of emails Limited sends to full database; More Consistent pattern of sending sent per campaign segmented; Targeted sends to full customer database Messaging Tailored to customers’ preferences and Same message to all customers, no targeting position in the vehicle lifecycle Average email >15% open rate and well above <10% open rate performance Unsubscribe rate <0.3% >1.0%
  • 14. There Goes Your Database Responsible LET THE EMAILING BEGIN! Offenders
  • 15. There Goes +140 from website conversions » 4 email campaigns Your Database 1 newsletter to full database (23,000) 3 targeted emails (3,000) » 31,000 emails Responsible » 6.3% unsubscribe = -69 +71 LET THE EMAILING BEGIN! +140 from website conversions » 4 email campaigns to entire database (23,000 x 4) » 92,000 emails Offenders » 1.0% unsubscribe = -920 -780
  • 16. There Goes +140 from website conversions » 4 email campaigns Your Database 1 newsletter to full database (23,000) 3 targeted emails (3,000) Responsible LET THE EMAILING BEGIN! +140 from website conversions » 4 email campaigns to entire database (23,000 x 4) Offenders
  • 17. There Goes +140 from website conversions » 4 email campaigns Your Database 1 newsletter to full database (23,000) 3 targeted emails (3,000) Responsible » 31,000 emails LET THE EMAILING BEGIN! +140 from website conversions » 4 email campaigns to entire database (23,000 x 4 » 92,000 emails Offenders
  • 18. There Goes +140 from website conversions » 4 email campaigns Your Database 1 newsletter to full database (23,000) 3 targeted emails (3,000) Responsible » 31,000 emails » 0.3% unsubscribe = -69 LET THE EMAILING BEGIN! +140 from website conversions » 4 email campaigns to entire database (23,000 x 4 » 92,000 emails Offenders » 1.0% unsubscribe = -920
  • 19. There Goes +140 from website conversions » 4 email campaigns Your Database 1 newsletter to full database (23,000) 3 targeted emails (3,000) Responsible » 31,000 emails » 0.3% unsubscribe = -69 LET THE EMAILING BEGIN! +71 +140 from website conversions » 4 email campaigns to entire database (23,000 x 4 » 92,000 emails Offenders » 1.0% unsubscribe = -920 -780
  • 20. The Cost of Irresponsible Emailing Putting the loss in perspective. Replacing database loss through unsubscribes Average cost of a 3rd party lead: $21 780 x $21 = $16,380
  • 21. The Long-Term Cost of Irresponsible Emailing Loss of repeat business What is your PVR? $______? $1,000 (conservative estimate) 75% of database is customers 75% of 780 585 Customers close at a higher rate 50% of 585 292.5 Potential lost repeat business = $292,500
  • 22. The Long Term Cost of Irresponsible Emailing Loss of Lifetime Value During vehicle lifecycle (4.5 years) dealership customer will add another vehicle to the household OR refer a sale Customer unsubscribes x Conservative PVR 585 x $1,000 = $585,000 Additional potential lost referral revenue
  • 23. What Does This All Mean? The example was intentionally dramatic. Some additional points to consider: »Some attrition is inevitable and expected »Sending to your entire database isn’t always bad and sending segmented emails isn’t always good »Sending relevant, optimized messages to groups of customers or all customers that prompts recipients to go to your website, submit a lead or make a phone call should be a core component of your marketing strategy. Why? – Filling the funnel – 1st party leads close at twice the rate as 3rd party leads – Loyal customer close at a higher rate than prospects – Improved retention
  • 24. Case Study: List Fatigue Rehab Background: »Honda dealer major metro area »14 other Honda dealers within a 25 mile radius »Internet savvy consumers »Traditional advertising expensive, some radio »Digital marketing strategy, heavy reliance on email
  • 25. Case Study: The Problem »Weekly email sends to full database, heavy sales message »List fatigue – Open and click rates were slipping – Unsubscribes were rising »Management worried that dip in calls, leads, showroom traffic and sales would happen if emailing was scaled back
  • 26. Case Study: The Plan »Create 3 targeted messages instead of one combined message – Prospect – Sales – Service »Decrease the number of sales customers received each month,but continue to send campaigns to prospects weekly
  • 27. Sales Service Back to School, Prospect Back to Honda Weekly campaign reorganized three ways for three different targets.
  • 28. Sales Service Prospect Zero the Hero! Weekly campaign reorganized three ways for three different targets.
  • 29. Case Study: What Happened At First Immediate, dramatic increase in open, click and CTO rates in emails to all groups »Prospect – 207% increase in open rate – 448% increase in click rate »Sales – 23% increase in open rate – Click rate remained the same »Service – 121% increase in open rate – 160% increase in click rate
  • 30. Case Study: Tweaking the plan »But despite improved stats, fewer people were receiving the emails so they received fewer clicks overall »Within 2 weeks, while sending emails to 66.5% fewer people, the number of clicks were only down 14.5% »Temporary shift from 1/3, 1/3, 1/3 to ½, ½, to address anxiety »At reduced send volume, as many clicks were being generated as at full database send volume »No short term dip in sales or service experienced
  • 31. Case Study: 180 Degree Turn Around Outcome: »Increase in organic website leads from 640/month to 870/month »No 3rd party leads »Email consistently a top 4 source of referring traffic to the main website »Reduced spend on traditional advertising »Finished #1 in the district
  • 32. Do & Don’t #1 »Do pick up your chin. Do consider the long term impact of aggressively and frequently emailing your full email list offers that are not geared to demonstrated interests. »Don’t spray and pray. Don’t give in to the temptation to focus only on generating sales this month, this week, this weekend, today at any cost.
  • 33. Do & Don’t #2 »Do benchmark key data points. Know your basic email performance metrics, but go beyond the basics. – Bounce, open, click, CTO, complaint, unsubscribe rates – Email penetration rate – Traffic referred to website • Tag email appropriately • Compare to other sources of direct traffic – Telephone traffic referred – ROI »Don’t keep doing the same thing if it’s not working. Be prepared to adapt.
  • 34. Do & Don’t #3 »Do analyze your data. Look at where customers are in the vehicle lifecycle, what they have demonstrated an interest in, most popular content and offers, most successful campaigns and tailor targeted messages accordingly. »Don’t conclude that it is never a good idea to send an email message to your full database. Softer retention marketing pieces such as newsletters, annual events, etc. may be appropriate for all customers and prospects. But don’t send to your full database as a default position.
  • 35. Do & Don’t #4 »Do know what your follow up plan is before you send email campaigns and communications. Follow up email? Telephone call? »Don’t leave anything on the table. Some people who receive an email will do exactly what you want. Some will unsubscribe, delete or not open. Others will interact with the email but not call, submit a lead or come in to the dealership. Don’t forget to give them the nudge they need.
  • 36. Do & Don’t #5 »Do maintain and update your customer data. Do pay attention to hard bounces. Do take advantage of the opportunity to capture and update email addresses in your Service Department. »Don’t assume that just because you have an email address associated with a customer record that it is current and valid.
  • 37. Do & Don’t #6 »Do look for data you can use for training purposes to improve. Look at email capture rates in the Service Department by Service Advisor. Are certain Service Advisors consistently failing to get email addresses? Use this as a training opportunity. »Don’t accept that there is nothing you can do about it. Use your tools. Make email address a required field. Incentivize/disincentivize.
  • 40. Thank you. Kristen Judd Founder, Co-CEO 3 Birds Marketing LLC 321 W. Rosemary Street Suite 110 Chapel Hill, NC 27516 Office: (919) 913-2747 Mobile: (415) 235-3902 Email: kristen@3birdsmarketing.com Twitter: @kwjudd Twitter: @3birdsmarketing LinkedIn: www.linkedin.com/pub/kristen-judd/1a/563/548 Website: www.3birdsmarketing.com