Even though many channels to attract traffic and sales have emerged in recent years, email continues to be one of the main channels for driving online sales. In Q3 2013, email amounted to 2.53% of eCommerce sales, whereas all social channels put together amounted to 0.22%. As for average order value, email orders had an average value of $100.48 as opposed to $93.43 from social channels.
However, the impact of email on eCommerce sales is dropping dramatically, from 4.22% in Q3 2012 to 2.53% in Q3 2013 (source). It seems that this trend will continue, as users have less and less time to read all the emails they receive, and the volume of emails - many of which are irrelevant - grows. To this must be added the impact of the “Promotions” tab in Gmail accounts, and the potential future impact of similar services which try to help their users manage their email account in a more orderly and effective way.
Yet even though, on average, the impact of email on eCommerce sales is decreasing, some retailers are making the most of this situation. It’s clear that users need more relevant experiences on any channel through which they connect to brands and retailers. The same goes for email. It’s no longer enough to treat all customers the same, sending them a generic periodic newsletter where the only sign of personalization is the customer’s name (often in all caps - "Hi there, BOB"). Even though segmentation is a step forward, it remains a pale version of what it might be if a really personalized email communications strategy was followed.
Let’s start by taking a look at how most online stores are using email marketing. There are two main kinds of email communications. First, newsletters, or periodic deliveries of information that has been generated in an "editorial" way, that is, selected by the eCommerce store marketing team, who try to make it of interest for most of the store buyers or most of the users in the segment to whom the newsletter is being sent. And then there are transactional emails, which are sent after a user performs certain actions. Some of the most common transactional emails are the registration of a new user in a store, confirmation that an order has been received, the notification that a new order is ready to be delivered, etc.
Typical Ecommerce Newsletter Structure
There are usually 4 different parts. A header (A) including the company logo and sometimes a headline that sums up the newsletter topic. A section including special deals, be they discounts, promotions, featured categories, etc. (B) A third area displaying a selection of products of interest – products which the store wishes to highlight for business reasons, which are interesting for most users, new items, etc. (C). And a last area that shows selected contents, which does not appear in all eCommerce newsletters but which perfectly complements the other sections by providing added value to a selection of promotions and products (D).
Newsletters are usually generated “editorially": The promotions, products, and contents that are seen as most relevant for most newsletter recipients are selected, or at most the recipient database is segmented into a number of segments with shared interests, and a newsletter is editorially generated for each segment.
Problems With The Typical Approach
There’s no pleasing everyone: that is, however good you are at selecting the newsletter components, you will never satisfy all your readers, as their tastes and needs can be very different.
Segmentation cannot be scaled: the more you segment your customer database, the more work it will take to prepare specific newsletters for each customer group. Even so, you will be unable to please all the customers in every segment.
If you want to go one step further, you must personalize your newsletter. That is, you should stop selecting each and every one of the newsletter components editorially and automate the selection of these components on the basis of each user’s profile. The benefits of this approach are exactly the opposite of the failings of the traditionally approach: you can please each and every one of your users, as a specific newsletter is generated for every one of them. And you also get a fully scalable system, as there is no need to select the newsletter components "by hand".
Amazon has been following this strategy for a long time, with very good results, both in terms of service costs and in terms of the revenues generated via their personalized newsletters. The newsletters sent by Amazon are for the most part a "mere" selection of products of interest for their customers, based on their recent activity in the Amazon website.
However, you will often need to send messages that are associated with the brand, regardless of the recipient. These messages can be generic promotions (our sales have started), specific contents which you want to communicate, or a product which you want to highlight in particular. This usually requires a partially personalized newsletter. In these cases, the newsletter has a fixed structure, with variable spaces for personalized items. The following image shows the structure which we saw before, highlighting the personalized areas, and the product selection, including personalized products for each user.
This is all great and sounds wonderful, but what impact does newsletter personalization have on the KPIs? Here are some key data, taken from BrainSINS clients:
Automatically recommended products had 73% more clicks than hand-selected products.
Product recommendations in newsletters generated 46% more revenue than handpicked products.
The time to create a newsletter dropped by 30 to 90%.
The results are clear: less effort and improved sales and user engagement.
As we said before, newsletters aren‘t the only type of email communication with users. There are other emails – transactional emails – which are sent to customers when they perform certain actions, including registering in the store, making an order, or when an order is ready to be sent.
Transactional emails are usually more personalized and relevant, as they are generated due to a conscious action on the user's part (and in many cases the user, after performing the action, is waiting for these emails to confirm that everything's OK). Also, these emails usually include personal information (name, email address, order details, etc.)
But this doesn’t mean that there’s no room for improvement. Take a look at this example: an order confirmation email from Kelly Moore (they sell great photographer’s bags):
The email is appropriate, and includes the necessary information to reassure the customer that the order was correctly received. But they are also missing the opportunity to have a more personalized communication with the customer. Why not offer other items that the customer might be interested in? In the case of Kelly Moore, that only sells a small range of products (bags), this may be less relevant, but it still makes sense because they would be giving users the possibility of returning to their website to view other products of interest. The following image is a sketch of what this transactional email might look like if a personalized product selection was included:
If your product is non-recurring, or if your product selection does not encourage cross-selling (as in the case of Kelly Moore), there are other options to have more personal communications with customers. For example, instead of a personalized selection of products (related to the product which was just purchased), customers could be sent a selection of contents of interest, pictures of how other customers arrange their photographic materials in the bag which was just bought, etc.
The purpose here is clear, and it's not so much selling straight away as providing, via personalization, the perfect excuse to keep "talking" with customers, inviting them to “come back” and view other products or contents of their interest, ultimately extending their purchase experience beyond a single transaction.
To sum up: You should always consider the possibilities of personalization. Web and email personalization technology is currently accessible to everyone, in terms of both costs and technical resources, so lack of a large budget or of a suitable technical team is no longer an excuse. There are many personalization providers who will help you to apply the techniques discussed in this article (and many others). So change your mindset, find the opportunities for personalization in your email communication strategy, and start offering personalized communications leading to richer, fuller experiences. Your customers will thank you for it, and so will your sales.
Originally published Feb 13, 2014 10:00:00 AM, updated October 30 2019