The ultimate lifecycle email marketing guide cart abandonment programs

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The ultimate lifecycle email marketing guide cart abandonment programs

  1. 1. WHITE PAPER | NOVEMBER 2011Best Practices in Email MarketingThe Ultimate Lifecycle Email MarketingGuide: Cart Abandonment ProgramsProven strategies for implementing, testing and optimizing an effective cart abandonment program
  2. 2. PUBLISHED BYUS Headquarters UK Headquarters APAC HeadquartersStrongMail Systems, Inc. StrongMail Systems UK Ltd. XCOM Media1300 Island Drive, Suite 200 St. Clements House Unit 1Redwood City, CA 94065 27-28 Clements Lane 15 Lamington StreetP: +1 (650) 421-4200 London New FarmF: +1 (650) 421-4201 Queensland 4005 EC4N 7AE Australia United Kingdom P: +61 7 3666 0544 P: +44 (0) 203 207 9031Copyright © 2011 StrongMail Systems, Inc. All rights reserved.No part of the contents of this publication may be reproduced or transmitted inany form or by any means without the written permission of StrongMail Systems, Inc.STRONGMAIL and the STRONGMAIL logo are registered trademarks inthe United States, other countries or both. All Rights Reserved.StrongMail Systems UK, Ltd is a company registered in England and Wales at5 New Street Square, London EC4A 3TW. Reg. No. 6398867. VAT # GB 925 07 6228.Trading Address: St. Clements House, 27-28 Clements Lane, London EC4N 7AE.www.strongmail.com
  3. 3. Table of ContentsINTRODUCTION ............................................................................................................... 4WHAT IS IT? ....................................................................................................................... 4WHY IT’S A GOOD IDEA .................................................................................................. 4GETTING STARTED .......................................................................................................... 5 Five Steps for Launching an Effective Cart Abandonment Program ....................................5OPTIMIZING THE EFFORT .............................................................................................. 6 Four Optimization Best Practices for Cart Abandonment Programs ....................................6ANATOMY OF AN EFFECTIVE CART ABANDONMENT PROGRAM EMAIL ........... 7REQUIRED TECHNOLOGY .............................................................................................. 8 Example Cart Abandonment Program.............................................................................................9THE PAY OFF ................................................................................................................... 10ABOUT STRONGMAIL ................................................................................................... 10
  4. 4. INTRODUCTION This handy guide for getting started with an effective email cart abandonment program is the second in a series of "Ultimate Email Marketing Guide" whitepapers focused on lifecycle marketing. In the pages that follow, you will learn the insights, strategies and tools that are necessary to implement, test and optimize a compelling cart abandonment program that drives incremental revenue while maintaining customer satisfaction. WHAT IS IT? The act of abandoning a shopping cart online is a common stage of e-commerce and a directive in intent, not failure. However, unless you have a cart abandonment program strategy in place, the trail could go cold there. Enabling conversation beyond the act of abandoning the process is your opportunity to continue the conversation with a customer who is engaged and interested.Open rates for abandon Recognizing the need for a cart abandonment program is the easy part; determining what the experience should look like for customers is a bit more complicated.cart messages average Regardless of how you craft the experience, it needs to be a welcomed and pleasantaround 46% versus the experience; otherwise, you may just alienate the customer – which no one wants to do.industry average of 22%, And with approximately 75% online shoppers abandoning their cart according to StrongMail partner SeeWhy 1, you are leaving a lot on the table if you do not implement a programwhile click through rates effectively. With the wrong approach, you risk being perceived as the sales clerk chasing ahover around 15% versus customer down the street after she tried something on and left it in the dressing room.5.6% for the industry. Cart abandonment programs should be subtle, yet impactful – and finding the right combination drives programmatic success. If you are not leveraging a program today, or it is not performing, implementing or optimizing one should be a high priority effort for your email marketing team. WHY IT’S A GOOD IDEA There are a number of reasons purchasers abandon a conversion process, but it essentially comes down to price and timing. According to Forrester Research 2, 44% of those who abandon do so because of shipping and handling fees, and 41% cite lack of readiness to buy as a reason for abandonment. There is even a contingency of 24% that stick items in the cart to come back for later. It is impossible to know why the cart was abandoned, but just because they left doesn’t mean they won’t be back. According to the SeeWhy study, engagement metrics are well above that of the email industry as a whole. Open rates for abandon cart messages average around 46% versus the industry average of 22%, while click through rates hover around 15% versus 5.6% for the industry. And, most importantly, of those who click to reconsider the purchase, 21% convert and wind up spending 55% more than those who do not abandon their carts. 1 SeeWhy, "Shopping Cart Abandonment Rate Tops 75%," August 2011 2 Forrester Research, "Understanding Shopping Cart Abandonment," May 2010 4 The Ultimate Lifecycle Email Marketing Guide: Cart Abandonment Programs Copyright © 2011 StrongMail Systems, Inc. All rights reserved. SM-CZ11111
  5. 5. GETTING STARTED A successful cart abandonment program starts with understanding the purchase behavior and cycles of your customer base. It is easy to say that time is of the essence when it comes to cart abandonment – but it isn’t everything. The buying cycles of your products and your customer’s price sensitivities coupled with abandon behaviors will determine the path the programs need to take. And yes, thats "programs," plural. While your cart abandonment effort might be over-arching, you should run multiple programs based on the likely reason for abandon and/or abandoner types. Five Steps for Launching an Effective Cart Abandonment Program The following five tips will help get you started on the right track. 1. Study and Categorize Abandon Behavior Before Building Your Strategies Just as every customer is not created equal, neither is abandon behavior. By studyingAs a general rule of the various attributes of the products that are placed in the cart, you should be able to accurately discern the categorical reason for abandoning the cart. For example, youthumb, the first few may find that low cost items have a higher rate of abandon because the cost of shippinghours post-abandon increases the cost of the product by 50%, or that items that are big and bulky are perceived as difficult to deliver, which drives the abandon. Looking at properties suchis the most opportune as item cost, shipping cost, product size and perishability will give you some indicationtime frame in which to of reason. Next, couple your findings with customer behaviors such as repeat abandon behavior in a 24-hour period to define the strategy for key segments and products.send an abandoned cartmessage, and identifying 2. Strike While the Iron is Hotthe right time for your As a general rule of thumb, the first few hours post-abandon is the most opportune time frame in which to send an abandoned cart message, and identifying the right time forbrand is imperative to your brand is imperative to long-term success. Additional research from SeeWhy finds thatlong-term success. 72% of those who buy a product that was previously abandoned do so in the first 12 hours. As a result, batching abandon cart messages and sending them out every 24 or 48 hours is not likely to be the most effective use of your communication strategy. While not every client is going to be served by an email that is sent within hours, time is of the essence and the window to a conversion decision closes quickly. It is also important to develop business rules that recognize a customer as a repeat abandoner – you don’t want to be sending the same message to the customer each time the cart is abandoned, especially if it is the same product. The program needs to be smart enough to recognize the behavior and deliver a follow-on message that is timely and relevant to that experience. 3. Are There Actions that Would Elicit a Multi-Step Program? Because of the small window of opportunity, cart abandonment programs are often viewed as a "one-and-done" type of email communication. However, there may be opportunities to communicate beyond the initial abandon message if planned for appropriately and positioned correctly. Consider this scenario: Starting with the cart abandonment, a message is sent to the customer to encourage the purchase of the product, after which no purchase is made. Should your communication stream stop there? Maybe. Maybe Not. What if you followed up 24 hours later with customer reviews of the product that was left behind or product use suggestions? Clearly the ability to do this is going to be driven by your products and services – and should always be tested. 5 The Ultimate Lifecycle Email Marketing Guide: Cart Abandonment Programs Copyright © 2011 StrongMail Systems, Inc. All rights reserved. SM-CZ11111
  6. 6. 4. Partner or Build In order to drive these communications, you need to have a mechanism in place to get the information from your website to your email system. Analyze the systems available to help you achieve your goals based on the complexity of your program. In addition to your email service provider, there are a number of other possible partners that can make this effortless, including SeeWhy and Omniture. 5. Establish Metrics and KPI’s for Success Measurement Metrics and KPIs are necessary for any marketing program, because how can you knowCart abandonment how well your program is performing if you have no baseline with which to measure theprograms are often performance against? The answer, quite simply, is "you cannot."viewed as a "one- Define your hypothesis and the long-term goal of the program first, and then make sure the metrics you need to prove your theory are attainable. For example, you may want toand-done" type of convert 15% of all abandoners with the program. In order to prove you’ve achieved this,email communication. you need to have the data available. So keep it realistic and make sure that what you are trying to accomplish is a goal the organization as a whole can get behind and support.However, there maybe opportunities to OPTIMIZING THE EFFORTcommunicate beyond Now that you have the map for your cart abandonment program, it is time to get it up andthe initial abandon running. These programs can vary greatly in cadence and content, but the ultimate goal is the same – to drive conversion. How you achieve that is going to be different based on productmessage if planned lines, buying behaviors and abandoners – but there are some key points to consider that arefor appropriately and applicable across the board. Testing these best practice tactics during the implementation process will help you get the most out of the effort, while simultaneously learning what workspositioned correctly. for your unique customer base. Four Optimization Best Practices for Cart Abandonment Programs 1. Feature an Image of the Product that was Left Behind The positioning of your abandon cart message will determine how you feature the product creatively – it could be just a product shot with the details of the price or it could be a lifestyle shot that features consumers engaging with the product. Regardless of how you plan to position your messaging, you need to have some imagery of the product that is going to resonate with the consumer, reminding them why they were considering it in the first place. 2. Don’t be Creepy – Craft your Copy Accordingly Consumers know you have their cart information available, but don’t be blatant and creepy about it. Avoid chasing the customer down the street, “Hey Jane, you left this at the store… don’t you want to buy it?” While it may work for some, it is often times a gentler hand that is successful here. Include ratings and reviews from others who have purchased, offer alternative options for buying the product (e.g., go to our store located at…) and remind the customer of the value of the product. 6 The Ultimate Lifecycle Email Marketing Guide: Cart Abandonment Programs Copyright © 2011 StrongMail Systems, Inc. All rights reserved. SM-CZ11111
  7. 7. 3. Include an Upsell Cross-sell and upsell are often only considered as inclusions in transactional communication, but consider including “other items purchased by customers” or complementary items that may enhance their experience with the initial product considered. If you are including an upsell offer, it may be good to test the inclusion of an “exclusive” discount if they purchase both items as a result of the message. Cross-sell and upsell are often only 4. Determine the Value of an Offer There is a healthy debate around the necessity and effectiveness of including an offer in an considered as inclusions abandon cart message, such as free shipping, dollar-off or percent-off deals, to drive the in transactional conversion behavior. The answer is really..."it depends." If you can determine that the price or price-to-shipping cost ratio is the reason for the abandon, then it may be beneficial to communication, but do so. But if it is a timing issue or a product that is often heavily researched before purchase, consider including more education and access to reviews may be the clear winner. As with the others, test it out to see what is best for each stream of your cart abandonment program. “other items purchased by customers” or ANATOMY OF AN EFFECTIVE CART ABANDONMENT PROGRAM EMAIL complementary items The following cart abandonment series from footwear specialty retailer FootSmart demonstrates how a well-executed program can generate substantial revenue and that may enhance their engagement. By integrating StrongMail with Coremetrics, FootSmart generates a three-email experience with the series based on a set number of days from the initial abandonment. initial product considered. In order to prevent burnout with these messages, FootSmart uses suppression logic to prevent other marketing messages from reaching the inbox while a customer is still going through the cart abandonment program. As a result, FootSmart is generating hundreds of thousands of dollars of incremental annual revenue from this program – with tens of thousands of dollars each month from the second and third follow-up emails alone.First email in the series simply provides Second email in the series offers Third email provides a cart expirationa link back to cart "free shipping" as an incentive notice along with a $10 coupon 7 The Ultimate Lifecycle Email Marketing Guide: Cart Abandonment Programs Copyright © 2011 StrongMail Systems, Inc. All rights reserved. SM-CZ11111
  8. 8. REQUIRED TECHNOLOGY Unlike traditional outbound batch-and-blast email marketing campaigns, cart abandonment programs need to be triggered via integration with your e-commerce system, dynamically assembled based on the information provided and then delivered in the timeframe youveSending a series of tested to be most effective. This entire process requires a transactional or triggered email solution that not only ties into your e-commerce system and data warehouse, but that alsocart abandonment provides you with in-depth reporting to gauge deliverability and engagement, as well asemails is most easily full HTML customization capabilities to ensure visual consistency with your other email communications. Sending a series of cart abandonment emails is most easily accomplishedaccomplished with a with a lifecycle email marketing solution that allows you to schedule various iterations basedlifecycle email marketing on timing, products or other relevant variables.solution that allows If you arent currently able to dynamically assemble and send event-triggered emails with full tracking capabilities, you should look at upgrading your system to help ensure that youryou to schedule various customers have a positive experience with your cart abandonment program. Marketers shoulditerations based on also seriously consider a system with lifecycle marketing capabilities that will allow you to easily create a flow that maximizes engagement with your brand. On the following page is antiming, products or example of a multi-stage cart abandonment program designed with StrongMails drag-and-other relevant variables. drop lifecycle marketing solution. As the example illustrates, a cart abandonment program can integrate wait steps and actions that generate different flows that can be tested for maximum engagement. In this scenario, an abandoned cart kicks off a four-way split path that tests different timing and incentives against a control group. After running the program for a set period of time, you can optimize it based on previous results for each path. 8 The Ultimate Lifecycle Email Marketing Guide: Cart Abandonment Programs Copyright © 2011 StrongMail Systems, Inc. All rights reserved. SM-CZ11111
  9. 9. Example Cart Abandonment Program The cart abandonment program built below using StrongMails lifecycle messaging solution demonstrates the types of flows that can be created to test and optimize performance.Create multi-stage programs Customize delivery schedule Control message flow via rule Proof programs by sending testwith drag-and-drop simplicity for optimal impact or split-based routing messages for every possible path Trigger messages via real-time Schedule data exports to enable Test multiple offers to integration with external systems enterprise or partner integrations maximize performance 9 The Ultimate Lifecycle Email Marketing Guide: Cart Abandonment Programs Copyright © 2011 StrongMail Systems, Inc. All rights reserved. SM-CZ11111
  10. 10. THE PAY OFF While cart abandonment programs require careful planning, research and the right technologies, a proper program can drive incremental revenue and customer satisfaction. It is important to avoid abusing this channel though – be mindful of the amount of time you communicate with the customer about the product, and how many times you reference back to it. There may come a point in time where you just become annoying – and no one wants that. ABOUT STRONGMAIL Every day StrongMail is empowering leading companies to connect and grow their customer base through email and social media. From the worlds largest retailers to the hottest daily deal sites, StrongMail is helping smart marketers boost the performance of their programs with cutting-edge lifecycle marketing capabilities and the ability to deliver millions of personalized messages in 10 minutes or less. Our products and services provide end-to-end solutions for such notable brands as Travelocity, Netflix, Macy’s, McAfee, Viacom and T. Rowe Price. To find out what we can do for your company, visit www.strongmail.com or contact us today. StrongMail Toll free U.S. +1 (800) 971-0380 Toll U.S. +1 (650) 421-4255 Toll U.K. +44 (0) 1494 435 12010 The Ultimate Lifecycle Email Marketing Guide: Cart Abandonment Programs Copyright © 2011 StrongMail Systems, Inc. All rights reserved. SM-CZ11111

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