Silverpop and partner Baynote take a look at using recommendations in email marketing to drive cross- and up-sell. Joined by the CTO of Musicroom.com, the team take a look at a dozen or more real-world examples of how personalised recommendations are driving conversion in triggered email marketing programmes.

1. Boosting Email Marketing Revenue with Personalised Recommendations

2. Our Presenters Chloe RigbyWeb Editor – Internet Retailing Rolf DoerrDirector, Business Development – Baynote Alistair McLeishCTO, Musicroom.com Richard EvansDirector, Marketing – Silverpop

3. Today’s Agenda Personalising the Web The Concept of Collective Intelligence Creating the Customer Experience The Power of Triggered Email Marketing Personalising Email Marketing Live Q&A

5. Conversion Rates Are Stuck

6. Average Order Size is Flat5

7. CONVERGENCE OF RECENT MARKET DYNAMICS Rising Commerce Complexity Higher eCommerce Revenue Targets The Battle for Consumer Attention eCommerce growing at 12.6%/yr. Senior execs and board perceive online channel as a “miracle cure” e-Commerce dominated by large players, brands selling direct, increasing global competition More sku’s, prices, bundles, terabytes of data to analyze, multi-channel touch points,internationalization Consumers are Ahead of Merchants Social, mobile, local, flash sales, group buying, video, what’s next??? The Result: Increasingly Difficult to Make Your Revenue 3

8. BREAKING THROUGH THE 3% CONVERSION BARRIER Traditional online personalization strategies are based on past shopping history and profile data. 20% of online shoppers have an intent to buy, but only ~3% actually purchase. Personal in-store experience starts with understanding and acting on intent – “how can I help you today?” In comparison, 30% of shoppers who enter a physical store complete a purchase.* 7

9. TODAY’S REQUIREMENT: NEW APPROACH TO PERSONALISATION WHO are you? UNDERSTAND What is your intent, this time? ACT Deliver relevant product & content at every moment RESPOND Continually adapt to ever-changing interests Traditional Profiles And Targeting Rules Buyer Intent Streaming Modeling Revenue Multiplier Effect … Across All Channels 6

10. POLL: Do you currently use recommendations on your website, in email or both?

11. UseRank ENGAGEMENT Adaptive Web: Automated, real-time, and personalised …page refers, links, entry trails, queries, page sizes, mouse movement, negative experience, virtual bookmarks, time spent, exit trails…

12. Baynote Secret Sauce: UseRank®

13. Musicroom.com

15. Europe’s largest online store for printed music and related materials for musicians, including tutor methods, instruments and accessories.

16. Started in 1996.

17. 18 high street stores in the UK and Ireland.

19. With 150,000+ products, some very niche, how to manage recommendations effectively.

20. Playing an instrument is personal

21. Listening to music is passive, playing it is active.

22. So targeting must include not only genre & instrument, but also skill level.

23. The Problem with Customers Also Bought...

24. Ignores new and long tail items with insufficient purchase history.

25. Ignores 95%-98% of user activity.

26. Doesn’t provide an alternative / up-sell technique.

27. Optimising Search

29. As an alternatives/up-sell or cross-sell technique.

30. Search Results & Category Pages

31. Placing results that users currently find relevant at the top search.

32. Basket Page

33. Cross-sell complimentary items, missed deals etc.

34. Artist A-Z

35. Artist Tag cloud

36. Email Recommendations

37. Follow-up emails include related items.

39. Musicroom.com Recommendations Search Results & Category Pages Placing results that users currently find relevant at the top search.

40. Musicroom.com Recommendations Basket Page Cross-sell complimentary items, missed deals etc.

41. Musicroom.com Recommendations Artist A-Z Popular Artist Tag cloud

42. Musicroom.com Recommendations Email Recommendations Follow-up emails include related items.

44. Basic recommendations algorithms can suggest related products based on meta-data. i.e. With a flute, recommend flute strings, flute books, flute cleaning products.

45. Crowd-sourced recommendations can make associations that are not present in product data.

46. E.g. Recommend a music stand with a flute.

47. Real-time recommendations

48. Trends in how music is consumed often moves fast

49. Real-time recommendations can give products exposure without marketing intervention.

51. Users clicking on recommendations convert at a rate of ten times the site average.

52. Average Order Value increase

53. Significant AOV increase for those using recommendations.

54. Margin increase

55. Ability to add business rules allows recommendations to target high margin areas of the catalogue.

56. Business Knowledge

57. Which content do users find interesting and engaging.

59. Relevant Emails Rock! Note: Metrics and salary costs based on JupiterResearch executive survey. Broadcast assumes $3 CPM, and all others assume $4.5 CPM. All assume $89 AOV, 50 percent product margin, and 2.8 million pieces of mail per month.

61. Beyond the buzzword... This IS Relationship Marketing

62. “Set it and forget it”

64. Low Volume 4.1% Triggered Campaigns Volume of Emails sent 95.9 % Batch Campaigns

65. Low Volume, High ROI 4.1% Triggered Campaigns Sales Generated Volume of Emails sent 95.9 % Batch Campaigns 40.2% Triggered Campaigns 59.8 % Batch Campaigns

66. Survey: Deploy Post Purchase Email?

67. Reminders…almost out of stock Open, CT and Conversion Rates that are MORE THAN DOUBLE broadcast email rates Average Order Value is 53% HIGHER

69. Customers find this door twice as interesting as door #2

70. Average Open Rate of 31%

71. Avg Click-through rate of 6%

72. Recipients receive 3,694 of these messages received per yearSource: Jupiter Research “US email Marketing Forecast, 2007 to 2012” Source: Quris, Harris Interactive, Executive Summary Consulting, November 2004 Source: Forrester Research, September 2003

74. Avg Click-through rate of 20%

75. Recipients receive only 87 of these messages per year

76. Customers find this door twice as interesting as door #2

77. Average Open Rate of 31%

78. Avg Click-through rate of 6%

82. Proactive Chat

84. Landing page

85. Category page

86. Product page

87. Search page

89. Shipping confirmation

90. Re-targeting

93. Scroll

94. Etc…

95. Navigation

97. Preferences

98. Past history

99. CatalogIntent Model

100. Why Add Recommendations? According to a Forrester survey: 74% unsubscribe from email lists because of irrelevant content

101. Order Confirmation Best Practice: Recommend accessory items or complementary items for each product in cart

102. Shipping Confirmation Best practice: Recommend accessory items Or popular items in same category

103. Cart Abandonment Best practice: - Send within 24 hours for optimal results - Recommend similar items - Use business rules to determine if up-sell can be done

104. POLL: How long do you wait to follow up on abandon carts, etc?

105. Follow Up Timing

107. Retarget and convert lost customers with targeted emails based on cart/browse abandonment

109. Delivering Related Recipe Recommendations

111. Delivering Related Product Recommendations

113. Delivering Related Product Recommendations

115. Wrapping Up Personalised product recommendations create a more relevant experience on site and in email – leading to more engagement. Including recommendations in triggered email marketing can lift revenues from 5-12% by providing more options and a more personal experience. Implementation shouldn’t be daunting. Much of your investment has already been made in your email marketing solution.

116. Q&A

118. Across 38 countries

119. 95% customer retention

121. Across 23 countries

123. Thank you!