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Silverpop retail benchmark Study


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Silverpop retail benchmark Study

  1. 1. STUDYSILVERPOP SURVEY:How Retail Marketers Are (and Aren’tQuite Yet) Using Triggered EmailsT oday, more and more marketers are looking for creative ways to engage customers and drive revenue. But are they using the right tools? Are they tapping into the power of behavior-driven, triggered messages?To answer these questions, Silverpop conducted a detailed benchmark survey of 43 retailers and e-commercecompanies and asked them to report on their use of tactics such as cart abandonment campaigns, browseabandonment programs and post-purchase emails—and the related results.With this report, we present a series of broad benchmarks marketers canuse to help answer some of their own burning questions abouttriggered messaging best practices. When should you distributecart abandonment emails, and how many should you send?What sort of conversion rates can you expect? And whatkinds of post-purchase messages should you consider?Key Findings / SummaryA few notable trends emerged from the survey results.Here are some key takeaways: • Many retailers are leaving cart abandonment opportunities untapped. Less than half of retailers surveyed are implementing cart abandonment campaigns despite their well- documented remarketing benefits. • Of the retailers that use cart recovery emails, most send too late—and not often enough. The majority of retailers surveyed wait too long to send the first abandonment recovery email, and then fail to follow up with a series of communications, denying themselves the best chance to win back these sales. • Abandonment recovery efforts are well worth the time. These emails typically yield much better open, click-through and conversion rates than general broadcast emails. • Post-purchase opportunities abound. While the majority of retailers surveyed send at least one type of post-purchase email, there are several types of highly relevant, behavior-driven messages going largely unused. • Browse abandonment initiatives are poised to take off. Though few retailers are currently employing these campaigns, nearly three-fourths of respondents said they planned to by the end of 2011. © 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 1
  2. 2. STUDYSTUDY FINDINGS: How Retailers Are Using Triggered Emails1 Use of Cart Abandonment Emails Although most industry studies have shown that between 15 percent and 20 percentof retailers currently use cart abandonment campaigns, that number should ascend quickly:83 percent of Silverpop survey respondents plan to take advantage of this tactic by theend of 2011.Retailers still on the fence would be wise to embrace the practice sooner rather than later,as these checkout-reminder emails can give you a competitive advantage and boost thebottom line. According to shopping cart recovery services provider SeeWhy, a companydoing $200 million in annual revenue loses $1.2 million a day from cart abandonment.To maximize the effectiveness of cart abandonment emails, companies should avoidemulating the overly aggressive salesperson who follows the consumer around the storeand out the door, instead adopting a service tone. Offer to complete the transaction inother channels, such as through live chat or a call center, and ask if the shopper had aproblem at checkout. 2 Use of Incentives When sending abandonment messages, retailers must decide whether to offer an incentive to lure customers back to complete a purchase. Survey respondents were split in their approach, with two-thirds not offering an incentive in the first recovery email, while one-third offered free shipping, a percentage off, or some other combination of incentives. With the right tone and approach, incentives are less important in cart recovery emails, especially in the first email of a series. An emerging best practice approach is to not offer an incentive in the first of a multipart series, but then offer a modest incentive in the second email and your most aggressive offer in the final email. There’s also a need to consider the risk of training customers. Repeat buyers might consider abandoning to get a promotional offer. Making promotions less predictable can reduce this risk. For example, you could only make free shipping offers to visitors who abandon their shopping carts when the cart value exceeds $75. To find the perfect balance between conversions and margins, test a variety of incentive offers until you’ve found the recipe for generating the most revenue. © 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 2
  3. 3. STUDY3 Number of Emails in Cart Recovery Program Rather than crafting a multistage cart abandonment series to recover lost revenue, two-thirds ofsurvey responders only send one cart recovery email.To boost results, consider a multistage series, such as a three-part campaign in which the first reminder issent within an hour of abandonment, the second approximately 24 hours after abandonment, and the thirdabout a week later.Consider how you’ll stop each of the stages in the campaign when a customer comes back and buys.There’s nothing guaranteed to infuriate customers more than a promotion for an item they’ve just purchased.Keep in mind that optimal timing will vary based on the site and the time sensitivity of the transaction.To determine what cadence works best for your company, test a few different timing and frequencyoptions along with use and level of incentives. 4 Timing of First Abandonment Message According to research by the Massachusetts Institute of Technology, 90 percent of ecommerce leads go cold within one hour. Yet despite the risk of losing the customer by waiting too long to follow up, 83 percent of survey responders waited five or more hours to send the first recovery email—and 61 percent waited more than 24 hours. To maximize the effectiveness of your cart abandonment initiatives, act fast. Real-time responses help ensure message relevance. In general, the faster you connect with the customer, the better your chances of success—but remember to monitor click- throughs, conversions and unsubscribes to ensure you’ve nailed the optimum timing.5 Open Rates Although it’s important not to overestimate the importance of open rates as ameasure of subscriber engagement, they do give you a feel for how your “From” name,subject line, and overall brand and value proposition rate with recipients.Providing further evidence of their high relevance, cart recovery emails can delivera much higher open rate than the average broadcast email, with a whopping80 percent of survey respondents reporting an open rate of 21 percent or higher forthese messages compared to 31 percent for general broadcast emails. The numbersat higher percentages are even more dramatic, with 53 percent tallying a 30 percentor better open rate for cart recovery emails, versus 14 percent for broadcast.To maximize open rates on cart abandonment messages, use a branded “From”line and a subject line that reflects the actions your recipient took on your site. (average email open rate)By doing so, you’ll help ensure that your email stands out in a crowded inbox. 6 Click-through Rates For the majority of survey respondents, click-through rates—which measure how strongly an email’s content and call-to-action(s) resonated with recipients—averaged below 10 percent for broadcast emails. Because of their highly personalized nature, cart abandonment messages can achieve click-through rates many times that rate. According to Silverpop’s survey, 87 percent achieved click-through rates of better than 10 percent, and nearly two out of five marketers using cart recovery messages achieved a click-through rate greater than 20 percent—double the percentage of their broadcast emails. To maximize click-throughs in cart recovery messages, test various message elements such as different layout approaches, mix of images versus text, CTA buttons and whether to specifically include pictures of the actual products your customer left in the cart or just (average email click-through rate) use a generic reminder to come back and complete their purchase. Either way, always link directly to the cart. © 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 3
  4. 4. STUDY7 Conversion Rates Although open and click-through rates are important indicators of recipient engagement, conversion ratesare the most important of the three since conversions mean revenue. And according to survey responders,cart abandonment emails deliver significantly higher conversion rates than do broadcast emails.In fact, the vast majority of respondents’ broadcast emails—86 percent—yieldedconversion rates of 10 percent or less, with only 14 percent notching conversionrates of 11 percent or higher. In contrast, 45 percent of survey responders reportedthat their cart recovery emails yielded a conversion rate of 11 percent of higher—nearly four times that of broadcast emails.To boost conversions, test the impact of various message elements, such as: • Reminding shoppers how long they have to complete the purchase to create a sense of urgency • Inclusion of photos of and/or information on abandoned products • Addition of customer reviews and testimonials • Inclusion of phone number and email address • Incorporation of related recommended products and top sellers in the last of a sequence of remarketing emails (average email conversion rate) • Layout to ensure it renders reasonably well across multiple devices and with images blockedAnd one final note: In your zeal to recapture sales, don’t forget to place customer service first and foremost so youremail doesn’t come across as too pushy. Include customer-support contact information that enables shoppers toreport technical problems with the site or issues they had with the product or your checkout process. 8 Use of Browse Abandonment Emails The practice of sending browse abandonment emails, which are messages that indicate a shopper looked at certain products or categories but then left the site, is a relatively new addition to the email marketing equation. The survey found that only a small percentage of respondents are currently employing the tactic. But with the success many marketers have experienced with cart abandonment campaigns, the concept is catching on quickly, with 71 percent of survey responders reporting that they plan to try browse abandonment initiatives by the end of 2011. To boost the relevancy of these messages, personalize them with images and details of a website category, page or product the shopper viewed but didn’t result in a purchase. And as with cart abandonment, marketers should avoid a hard sell and test the number of messages and timing to find the optimum mix. In addition, you should also test message elements such as the inclusion of photos, customer reviews, recommended products, etc. to see what resonates most strongly with your readership. © 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 4
  5. 5. STUDY9 Post-Purchase Emails Sending triggered messages after a purchase can help youlearn whether your customers are happy with their purchases,encourage future transactions, and invite customers to becomebrand ambassadors and help you extend the reach of yourmarketing messages.Nearly three-quarters of survey respondents send at leastone type of post-purchase email, with service satisfactionsurveys the most popular example (50 percent). In addition toalerting you to potential problems in the transaction processand minimizing customer defection, these messages canalso be used to identify content for possible testimonials.And they can deliver higher revenues than standardbroadcast messages.With customers increasingly using reviews whenevaluating purchases, many marketers are employingpost-purchase messages to encourage customers to contribute this keysource of content. But although nearly half (43 percent) of surveyresponders are sending product review requests, only 2 percent aresending notifications that the review has posted. Not only do thesemessages provide another touch point with the customer and boostyour trustworthiness, they often generate incremental revenue. OneSilverpop client, S&S Worldwide, is seeing a 12 percent purchase ratefrom customers that clicked on a review notification email.Despite delivering higher conversion rates than standard broadcastpromotional messages, “happy birthday” and “purchase anniversary”emails were used by less than one in five respondents. These messagesprovide another means of contacting customers outside of the regularpromotional calendar. And since they are usually paired with a friendlyincentive to return and purchase again, they are a savvy way to increaseengagement and loyalty—and boost revenue at the same time. © 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 5
  6. 6. STUDY10 Triggered Messages as a Part of Email ProgramsIndividual messages that are triggered by customer actions are an immenselypowerful way to connect with customers. Packed with highly relevant content that’spersonally tailored for the recipient, triggered messages typically deliver severaltimes the open, click-through and conversion rates of standard broadcast emails.According to our survey, triggered emails make up less than 10 percent of thetotal email volume for the majority (63 percent) of respondents, but despite the lowvolume, these messages typically deliver high ROI. Triggered messages make uponly 4 percent of S&S Worldwide’s total email volume, for example, but accountfor 40 percent of its email sales.To remain visible and wanted in the inbox, marketers should make sure emailstriggered by customer behavior and targeted to preferences are part of theirmessaging mix, and that they’re not relying too heavily on less relevant,one-size-fits-all broadcast campaigns.Although triggered messages take more time to set up and sometimes requirecomplex business rules and integrations with internal or third-party technologiesand data, you ultimately need fewer people to execute a triggered messageprogram. That’s because once set up, these automated messages virtually runby themselves, requiring just oversight, testing and occasional tweaking. Andwhen deployed as part of a comprehensive series of pre- to post-purchaseemails ranging from cart abandonment reminders to transaction confirmationsto happy birthday discounts, these messages are well worth the initial effort,since they can generate tremendous revenue.Conclusion Additional ResourcesInboxes are crowded, and the “noise” is louder than ever. As a result, 1) Gaylord case study: Online retailer regains 50 percent of “lost” salesgeneric batch-and-blast emails are becoming less effective. Yet many from cart abandoners through SeeWhy/Silverpop integrationretailers have not yet taken advantage of the inherent relevancy of behavior- 2) Silverpop Webinar: “The 5 Best Techniques for Recovering Abandonedbased, triggered emails to help them stand out from the masses. Shopping Carts with Email and Social Media”Those companies that have employed recipient-driven messaging such 3) Silverpop blog article: “Post-Purchase Emails That Drive Higheras cart abandonment campaigns have seen excellent results. By following Revenue, Engagementbest practices, you can help build your email business before and afterthe sale, generating incremental boosts in revenue and customer loyalty 4) S&S Worldwide case study: Online retailer recovers 25 percent of lostwith only a modest time investment. sales from abandoned carts using Silverpop Engage 5) Silverpop white paper: “Uncovering Revenue Opportunities: 10 Ways to Give Your Retail Program a Boost”Survey MethodologyTo compile broad benchmark data that would help marketers learnfrom each other, Silverpop conducted a detailed survey of 43 retailersand e-commerce companies in Sept. 2010 regarding the useof pre- and post-purchase triggered emails. © 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 6